The Trade Dollars of 1873-1885 represent one of the more curious areas of American numismatics. Authorized by the Coinage Act of 1873, the Trade Dollar was struck for the purpose of facilitating export transactions with China and was expressly created to compete against the silver Mexican Peso, a large, heavy silver coin that had gained favor with many Asian merchants. The Trade Dollar saw widespread use particularly in southern China, where the silver coin proved popular. But use of the dollar coin designed by William Barber wasn’t restricted only to foreign trade.
A clause in the Coinage Act of 1873 provided legal-tender status to the Trade Dollar for domestic use in transactions up to $5, but they were demonetized in 1876 as silver bullion prices began falling due in large part to the discovery of massive silver reserves in the western states. With Trade Dollars then carrying only 82 to 84 cents of precious metal value, calls grew for the government to withdraw the coin altogether or make them fully legal tender at $1 apiece. Secretary of the Treasury John Sherman ordered the discontinuation of orders for new circulating Trade Dollars on February 22, 1878.
However, this did not halt the production of Proof Trade Dollars, which had been minted for collectors at the pace of about between 510 to 1,150 per year depending on individual demand. With the absence of any legislation requiring that the production of all Proof Trade Dollars cease, the United States Mint continued striking proof specimens of the beleaguered coin until 1883; the mint derived a small profit from offering numismatic examples of the coin to collectors, thus it made economic sense for the mint to continue striking these coins even after circulation production of the series had ended.
Mintages of the post-1878 Proof Trade Dollars were robust even after the run of the business strikes had ended. A total of 1,541 proofs were struck in 1879, with 1,987 in 1880, 960 in 1881, 1,097 in 1882, and 979 in 1883; many of these coins were included in proof sets and surpluses being offered individually. By 1883, calls grew louder for the United States Mint to formally stop all production of the Trade Dollar – even proofs.
Government officials took heed after President Chester A. Arthur, noting the demonetized coin’s continued presence in domestic circulation, addressed Congress on December 3, 1883 stating, “[Trade Dollars] should no longer be permitted to embarrass our currency system.” He further suggested that the Treasury and Mint redeem the coins “as bullion in small percentage above the current market price of silver of like fineness.”
While the United States Mint no longer officially produced any Proof Trade Dollars after 1883, there exists a tiny number of 1884- and 1885-dated specimens. No mintage records reflect the production of any Proof Trade Dollars in 1884 or 1885 or even the allocation of silver planchets for these coins. So, what happened?
According to many numismatic historians, the 1884 and 1885 Proof Trade Dollars were clandestine strikes and can be traced back to William Idler, a prominent Philadelphia coin dealer who had high connections at the Philadelphia Mint. Only 10 of the 1884 Proof Trade Dollars were made and just 5 for the 1885. Details surrounding the negotiations that may have occurred to produce these exceedingly rare coins are uncertain. However, these two Proof Trade Dollar issues came to light only in 1908, seven years after Idler had passed and when the coins were initially offered for sale to the public.
The official end of the Trade Dollar came in 1887, at which time the government allowed Trade Dollars that had not been mutilated with “chopmarks” (a type of counterstamp) from Chinese merchants to be redeemed for face value. This triggered a massive deposition of circulating Trade Dollars from throughout the United States as well as huge shipments of the coin from China. Even decades after the Trade Dollar was discontinued, the coin failed to gain any real acceptance by coin collectors. This changed by the mid-20th century, as more collectors began realizing how scarce Trade Dollars had really become. As appreciation for the series grew, so, too, did the popularity of Proof Trade Dollars. Today, all Proof Trade Dollars are prized scarce collectibles, with the 1884 and 1885 Trade Dollars leading the parade as six- and seven-figure coins, in spite of their colorful (and spurious) origins.