Chapter 12: Trade Dollars, Guide to Collecting and Investing Table of Contents

CHAPTER 12

Guide to Collecting and Investing

U.S. TRADE DOLLARS 1873-1885

by Q. David Bowers

The Design

Designed by William Barber, chief engraver at the Mint, the trade dollar incorporates motifs not used earlier on circulating coinage.

The obverse portrays a female figure, later known as Miss Liberty, holding a ribbon inscribed LIBERTY, seated on a bale of cotton (?) tied with ropes. On another ribbon below the bale is the motto IN GOD WE TRUST. She faces the Pacific Ocean, looking westward toward China. On her head is a beaded coronet reminiscent of that on the double eagle. In her extended right hand is an olive branch symbolizing peace. Behind her is a sheaf of wheat. Around are 13 stars, spaced 4, 2, and 7; the date is below. The overall configuration has been called the Liberty Seated type by some, but that appellation is generally reserved for silver dollars coined 1840-1873. (The 1836-9 coins are called Gobrecht dollars by collectors.)

The reverse of the trade dollar depicts an eagle perched, holding three arrows in his right (dexter; observer's left) claws and an olive branch in his left (sinister; observer's right) talons, an error from a heraldic viewpoint. Above and around the border appears UNITED STATES OF AMERICA, with TRADE DOLLAR at the bottom border. In the field above the eagle is E PLURIBUS UNUM on a ribbon, and below the arrows and olive branch is the inscription 420 GRAINS, 900 FINE. A somewhat similar eagle was used later (1875-1878) on the twenty-cent piece and on certain pattern coins. Many years ago The New York Times adopted the trade-dollar eagle for use as a corporate trademark.

The edge of the coin is reeded. The metallic composition is .900 silver and .100 copper. Trade dollar weight is 420 grains, which includes 378 troy grains of pure silver (the balance of the 420-grains weight being copper). The standard diameter is 38.1 mm.

Historical Background

As detailed by R. W. Julian in the preceding chapter, this large silver denomination had its beginning in the late 1860s. During this time there was extensive commerce between American merchants and banking interests in China. Distrustful of paper currency, Chinese suppliers preferred to receive payment in silver coins. The American silver dollar of the time weighed 412.5 grains and had been used for export purposes from time to time. An example is the 1859-S Liberty Seated dollar, minted to the extent of 20,000 pieces expressly for shipment to China. Untold thousands of Liberty Seated dollars and other silver coins were exported to the Orient in the 1850s and 1860s, where most of them disappeared into melting pots.

Despite the availability of Liberty Seated silver dollars minted in the United States, most Chinese merchants preferred the silver content of Mexican 8 reales, which were slightly heavier. Even accounts in inland China were often reckoned in this medium. Chinese bankers and other businessmen agreed to accept United States silver dollars only at a discount. In order to compete effectively, many commercial interests had to buy Mexican 8 reales at a premium of 10% to 15% in order to have a supply for trade with the Chinese. The Mexican coins weighed slightly more than 417 grains, were .902 fine silver, and had slightly more than 377 grains of pure silver, in comparison to the United States standard dollar with 371.25 grains. Thus, Congress, whose members were encouraged by silver-mining interests in the West (in Nevada the Comstock Lode, discovered in 1859, was producing abundant quantities of silver), came to believe that a special "trade dollar," at first called a "commercial dollar," of slightly extra weight, would facilitate commerce on the other side of the Pacific Ocean. The resulting coin contained 378 troy grains of silver, thus slightly edging the silver content of the competing Mexican pieces.

A rider on the bill for the Act of 1873 made trade dollars legal tender. There was no problem at the time, for the bullion value of a trade dollar in 1873 averaged $1.02. However, as silver began its price decline, the Treasury desired to eliminate the profit that could be made by depositing silver bullion in a mint and receiving trade dollars in exchange. On July 22, 1876, Congress revoked 'the legal tender provision. After 1876, trade dollars could not legally be spent at face value within the United States. Rather, their value in America fluctuated in the metal market. Nevertheless, employers often flouted the law, putting them into pay envelopes (see section on 1876 trade dollars below).

Obverse and Reverse Types

Reverse Type I and Type II
Chief Engraver William Barber redesigned the reverse master hub, following complaints by Chief Coiner Archibald Loudon Snowden, in the summer of 1874, to Superintendent James Pollock, about imperfect striking quality of several high points of the design (especially the reverse). The most noticeable differences were at the claws and berries, but the topology of the reverse lettering in relation to the eagle was also altered. Barber sent working dies from the new hub to the coiners at all three mints, but notified only Snowden.

Although few cataloguers today make note of this distinction (but the number is increasing), the old and new reverses (Types I and II) are easily identifiable: (The existence of two major reverse varieties was discovered by Elliot Landau, December 9, 1952, and published in The Numismatist, June 1953.)

1. The first, or Type I reverse, used from 1873 through 1876, has a berry under the eagle's claw, narrow berries, and broad leaves.
2. The second, or Type II reverse, used from 1875 through 1885, has no berry under the claw, has larger round berries elsewhere, and narrow leaves.

Both reverses occur on 1875-1876 coins from all three mints.

The Type I and Type II designations might be better given as Varieties I and II, but the "type" nomenclature has been in use for almost 40 years, becoming traditional with other denominations, e.g., Types I and II (instead of Varieties I and II) for 1886 cents, 1913 Buffalo nickels, 1892 and 1917 quarters, etc. In every instance, these "types" represent redesigned hubs.

Chapter 12: Trade Dollars, Guide to Collecting and Investing Table of Contents