Buying Trade Dollars Without Fear

By Joshua McMorrow-Hernandez - January 3, 2020

Trade dollars are popular as both a type coin and as a series collectible to be collected by date and mintmark. But this scarce 19th-century silver dollar struck from 1873 through 1885 poses collectors a bevy of challenges, including finding pieces that are the right price, boast problem-free surfaces, and most importantly are authentic. While not categorically the rarest or most elusive of United States coins, trade dollars are among the most counterfeited, and this unnerving situation is nothing new. For decades, numismatists have had to be on their toes when collecting trade dollars. There are no hard numbers to report exactly how many counterfeit trade dollars exist, but it’s safe to say their presence is increasing by the day and surely far supersede in number the authentic specimens in existence. You’ve got to be careful when buying trade dollars today.

Trade Dollar Counterfeit Dangers Are Increasing

The problem of counterfeit trade dollars today is pervasive and multifold. The rise of online marketplaces surely hasn’t helped the matter, with many of these counterfeit trade dollars turning up on popular online auction websites. The vast majority of these fake coins originate from China, and they’re sold online for a fraction of the price of authentic pieces. Further complicating the situation today is that some of these fake trade dollars appear remarkably convincing, due to the advancements in the creation of die creation and minting – technologies that were originally created for legitimate purposes but are now becoming available more affordably to unscrupulous individuals.

Some years ago, it wasn’t necessarily very difficult to visually pick out a bad trade dollar. Among the most common of the old-fashioned counterfeit trade dollars were pieces made from casts of authentic originals. Cast counterfeits are normally rather easy to spot. They generally have grainy or porous surfaces, and the casting seam running along the edge of the counterfeit is often easy to spot, even when the seam has been sanded down to soften its appearance. In most cases, cast counterfeit coins weigh significantly more or less than the real coin its impersonating and can be plucked out as fake after evaluation of its surfaces with a 5X coin loupe, along with testing the weight and specific gravity of the coin.

Another type of counterfeit is the electrotype. While generally more deceptive than a typical cast counterfeit, electrotypes can be spotted fairly easily when you know what to look for. Electrotype counterfeits, created through a process akin to electroplating, generally involve two metal shells with faithful reproductions of the obverse and reverse cast via wax molds that are fused together and filled with metal to give the coin a solid look and feel. Electrotypes sometimes feature a seam around their edges and are not the correct weight. Thus, careful examination of the surfaces under 5X magnification and weighing the coin can help confirm its counterfeit status.

Today, counterfeits are being struck from forged planchets of metallic alloys roughly approximating the original, made from nefarious dies that are laser cut by computer-driven technology that can create a virtually identical replication of an original. And the counterfeiters are no longer going after only the rare key dates. More common dates are also fair game, and among bad trade dollars many fakes now even boast so-called “chop marks,” or counterstamped merchant marks found on many of the authentic trade dollars that circulated in Asia during the late 19th and early 20th centuries.

There is also an increasing number of websites that may misinform people about trade dollars. In such cases, poorly researched or unvetted information could include incorrect facts and information about trade dollars concerning their size, weight, color, die characteristics, or other critical information that you need to know when determining what real trade dollars are supposed to look like. And, of course, there’s always the collector who buys these deeply discounted counterfeit trade dollars thinking they’ve just received a remarkable deal on rare coins and proceed to sell these coins elsewhere closer to the fair market value of their authentic counterparts, further perpetuating the problem.

How to Avoid Buying Counterfeit Trade Dollars

Collectors who buy “raw,” or uncertified trade dollars really need to be on their toes today. No longer can you solely rely on using a 5X loupe or using a basic scale to identify counterfeits and avoid buying them. The advancement of counterfeit technology has simply pushed many of the modern fakes beyond the detection abilities of many collectors – even more seasoned ones. That is not to say an expert collector can’t spot a modern counterfeit. But it’s much more difficult than ever to pick up on the newer, more sophisticated counterfeit trade dollars. Yet, even in this brave new world of numismatic counterfeits, basic common sense can still save the day.

First, collectors need to abandon the idea of looking for “cheap” trade dollars. You get what you pay for, and a trade dollar being sold with a deep discount – even authentic ones – generally has problems. And, in many cases, a cheap trade dollar is a fake one. Also, be careful not to buy from unverified sources. Avoid buying raw trade dollars from overseas dealers, most particularly those in China, where the bulk of modern counterfeit coins are made. Only buy from trusted, reputable coin dealers who you know well and are respected in the numismatic community; buying from unknown dealers is generally OK, so long as they are members in good standing of distinguished trade organizations such as the Professional Numismatists Guild (PNG) and have other prestigious affiliations, including membership as a PCGS Authorized Dealer.

One sure way to enjoy peace of mind when buying trade dollars is to simply purchase authentic examples graded by a premier third-party grading firm such as PCGS. Pieces certified and graded by PCGS have been carefully examined by a team of expert coin grading and coin authentication experts and are guaranteed to be genuine. While some collectors who buy raw trade dollars may never be truly sure if what they have is authentic, those who purchase PCGS-graded examples can rest easy that they have genuine, accurately graded pieces for their collections.

1885 Trade Dollar PCGS Gold Shield PR65+DCAM. Click image to enlarge.

Fearlessly Collecting Trade Dollars

There should be no reason to be afraid of collecting trade dollars. Yes, there are many fakes out there, but if you buy from reliable resources, know what to avoid, and stick to buying PCGS-graded trade dollars there is absolutely nothing to fear and plenty to love within this arena of the hobby. Certainly, trade dollars are fun to collect, and they’re unusual relics of the past. Authorized under the Coinage Act of 1873 and designed by William Barber, they were struck at a time when the United States was expanding commercial and government trade in Asia. Trade dollars were produced with the express intent of providing reliable United States silver coinage that would be trusted and easily recognized overseas and able to successfully compete against large silver coins from around the world then circulating in China and adjacent territories.

Although trade dollars were struck primarily for use in Asia, many found their way back to the United States and entered domestic channels of commerce. This was problematic as trade dollars were originally legal tender in the United States only up to five dollars. Bullion prices markedly fell in 1876, with a typical trade dollar containing 80 to 83 cents of silver. While Congress demonetized trade dollars on July 22, 1876, the coins continued circulating throughout much of the United States for exchange at their bullion value. Interestingly, some United States employers were buying stockpiles of trade dollars at their bullion value and using them to pay their workers at the “ONE DOLLAR” face value stated on the coin. Many years later, the coins were remonetized under the Coinage Act of 1965 – some eight decades after the last trade dollars were struck.

The United States Mint primarily produced business-strike trade dollars, though a number of proofs were also made. While business strikes were in production only from 1873 through 1878, proof specimens were struck for each year of the series in limited numbers; proof mintages generally range from approximately 500 to 2,000 during each year from 1873 through 1883. Extremely small numbers of proof trade dollars were struck during the last two years of the series, with only 10 made in 1884 and 5 produced in 1885. Both the 1884 and 1885 proof trade dollars are now seven-figure coins and are found in some of the most prestigious of coin collections.

Whether or not one pursues the rarest specimens, there is a variety of ways to collect trade dollars. In most cases, collectors will buy just one trade dollar to include in a type set. However, those who focus on the series with greater dedication will build a date-and-mintmark set of circulation strikes, sets involving major varieties (such as the 1875-S Over CC Overmintmark), and even those that include chop-marked examples bearing unique and often artistic counterstamps from various Asian merchants who handled these coins in their circulation heyday.

No matter what type of trade dollar collection one wants to build, the safest way to do so is to buy certified examples to ensure that each piece is the real McCoy and not a raw deal. And another advantage to buying PCGS-graded trade dollars is that they can be included in the PCGS Set Registry, allowing collectors to publicly showcase and build competitive coin sets that are eligible for prestigious awards and other valuable incentives.

The PCGS Set Registry offers about a dozen fun, challenging set possibilities for trade dollar enthusiasts, including a basic set entailing 17 issues struck from 1873 through 1878, an 18-coin set inclusive of circulation strikes and major varieties, and a massive 31-piece set encompasing circulation strike, proofs, and major varieties spanning the entire series from 1873 through 1885. There is even a 29-coin set for a wide variety of chop-marked circulation strikes.

Trade dollars represent a fascinating area of our hobby, and it’s therefore not hard to understand why so many collectors long to include examples of these 19th-century relics in their collections – if even only one specimen for a type set. Still, whether buying one or 100 trade dollars, be sure to purchase the best you can afford, and whenever possible acquire PCGS-graded specimens so you’ll never need to second guess the authenticity and grade of your trade dollar.