Trade Dollars in 1886
In the summer of 1886 trade dollars were worth about 75¢ in New York, a value which continued through early 1887. Wholesale merchants in particular suffered, for trade dollars moved through the merchandising system from buyer to retailer and then to wholesaler, but the wholesaler could not pass them along except to bullion brokers at a discount.
Commentary on the Trade Dollar (1887)
In the Annual Report of the Director of the Mint, 1887, Mint Director James Putnam Kimball included the following:
"No silver coin of the United States has longer any claim to recognition as an international coin, like the dollar of Mexico and the Levant thaler of Austria, or such as the now historical trade dollar was designed to be, and had well-nigh becomeas now shown by the absorption of four-fifths of its whole coinage by foreign countries."
The same report also contained this information:
"Trade dollars were received mostly by transfer from the Treasury of the United States, and melted. The bullion contained 5,837,791.87 standard ounces, of the coinage value in standard silver dollars of $6,793,066.89. The transactions in trade dollars will be more fully explained under a separate heading on the redemption of trade dollars.
"In addition to the foreign and domestic bullion and coin deposited at the mints, silver, consisting of plate, jewelry, and old material generally, of the value of $512,848.06, was deposited during the year, against $67,156.36 in the preceding year."
The same volume contained an extensive report on the trade dollar, a wrap-up of what had occurred during the preceding 15 years. Much of the information referred to in the tables mentioned has been utilized in the present book, under entries for the individual date and mintmark varieties mentioned. Excerpts from the original 1887 Report follow:
"The Act of February 12, 1873, which revised the laws relative to the mints and coinage, provided, section 15, that the silver coins of the United States should be a trade dollar, a half-dollar or fifty-cent piece, a quarter-dollar or twenty-five cent piece, a dime or ten-cent piece; that the weight of the trade dollar should be 420 grains Troy; and that said coins should be legal tender at their nominal value for any amount not exceeding $5 in any one payment.
"Section 21 of the same act provided that any owner of silver bullion might deposit the same at any mint to be formed into bars or into dollars of the weight of 420 grains Troy, designated in that act as "trade dollars," and that no deposit of silver for other coinage should be received.
"The joint resolution of Congress of July 22, 1876 (section 2), provided that the trade dollar should not thereafter be a legal tender, and the secretary of the Treasury was authorized to limit, from time to time, the coinage thereof to such an amount as he might deem necessary to meet the export demand.
"In October 1877 the secretary of the Treasury directed that the receipt of deposits of silver for coinage into trade dollars be discontinued. On account of a supposed demand for export, this order was so modified as to admit of the receipt of deposits at the western mints for return to these coins. It was afterwards discovered that instead of being shipped abroad, many if not most of them were placed in domestic circulation. An order was therefore issued February 22, 1878, finally discontinuing receipt of deposits for trade dollars.
"By the Act of March 3, 1887, Congress provided that for a period of six months after the passage of that act, trade dollars which were not defaced, mutilated, or stamped should be received at certain offices of the Treasury Department in exchange for a like amount, dollar for dollar, of standard silver dollars, or of subsidiary coins of the United States, and that the trade dollars so received should not be paid out, but recoined into silver dollar or subsidiary coin. By the same act the provision of law authorizing the coinage of trade dollars was repealed.
"The number of trade dollars coined at the mints of the United States is exhibited by calendar years in the following table. A table of coinage by months will be found in the Appendix.
"Of the total number of trade dollars there was coined prior to the passage of the joint resolution of July 22, 1876, taking away the limited tender quality, the value of $15,631,450; and from that date to the suspension of the coinage, $20,327,910. Proof pieces have since been coined amounting to $6,564, making the total coinage of trade dollars as stated $35,965,924.
"All possible efforts have been made by this Bureau, with the co-operation of the Bureau of Statistics, to ascertain the number of trade dollars exported from the United States, and the number imported. Statements of trade dollars were not given in collectors returns of exports prior to 1877, nor in imports, except for the years 1880 and 1881. After 1881 no trade dollars were reported by collectors of customs as imported until after the passage of the act authorizing their redemption, when, at the request of this Bureau, subsequent importations were kept separate.
"In the following table, which exhibits the imports and exports of trade dollars as far as known, the exports for the fiscal years 1874, 1875, and 1876 are partly estimates based upon information obtained by the director of the Mint from the collectors of customs at the ports of San Francisco and New York.
"Of the total imports of trade dollars, 830,561 have been imported into the United States since the passage of the Act of March 3, 1887, authorizing their redemption. The amount imported each month from February 1 to September 4, 1887, is exhibited in the following table.
"919,459 have from time to time been deposited as bullion and melted at the mints and at the assay office at New York. The approximate amount so melted at each institution is exhibited in the following table.
"Information as to the number of trade dollars melted at the assay office at New York and at the coinage mints, though comparatively full for the period since the Act of March 3, is incomplete as to any earlier period, no specific record having been kept of the number of trade dollars contained in miscellaneous silver deposits.
"The number of trade dollars redeemed by the Treasury of the United States under the provisions of the Act of March 3, 1887, was 7,689,036, as follows.
"When the measure for the redemption of trade dollars was before Congress, the Bureau of the Mint was called upon for an estimate of the number of trade dollars which had passed into domestic circulation and were presumed to be still in the hands of citizens of the United States pending the action of Congress upon the public question of their redemption.
"The approximate estimate of this Bureau was some $7,000,000. This estimate was remarkably borne out by the actual redemption, this having amounted to $7,689,036, of which the value of $675,083 was imported from China and Japan subsequent to the passage of the act authorizing redemption. The total estimate by this Bureau was therefore within $13,953 of the final redemption.
"The close approximation of the estimate by this Bureau, as it has finally proved, is all the more noteworthy from the well-known circumstance that this was far from conceded when first offered, another estimate by high authority having been some three times greater.
"The trade dollars redeemed, 7,689,036 in number, as previously stated, have all been transferred to the mints or to the assay office at New York, and melted into bars ready for coinage.
"Of the trade dollars redeemed, the actual weight, after melting, as well as the legal weight and the loss in weight from abrasion and other causes, is exhibited in the following table.
"It will be seen that the loss was 40,215.79 standard ounces of silver, equivalent to 45,961 trade dollars, an average abrasion of about six-tenths of 1 per cent, or about 2 1/2 grains per piece.
"If all of the trade dollars redeemed [are intended to] be coined into subsidiary silver coins of the United States, as at present, in order to meet the current demand for dimes, the seignorage to the government on such coinage will be, exclusive of operative wastage, $631,574.50. If coined into standard silver dollars the seignorage would have been $93,004.10."