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Chops change value, affect grading

Chopmarks on Trade dollars may increase their value, but only for certain dates and if the eye appeal is there.

Trade dollars were minted from 1873 to 1885, though only as proofs from 1879 to 1885.

Many of the business strikes were shipped overseas to China for use in trade, given their heavier 420 grain, .900 silver fineness standard. It’s there, said Colin Gullberg, author of “Chopmarked Coins – A History” and editor of Chopmark News (email him at chopmarknews@gmail.com for a sample copy) that chopmarks were added.

“Trade dollars, and all other foreign silver coins in circulation in the China-area, were chopped by middlemen called ‘shroffs,’” he said. “The chop acted like a signature to guarantee that the coin in question was of good silver and acceptable in trade in China at the time, roughly 1620 to 1934. The United States introduced the Trade dollar to mop up supply of newly discovered silver sources in western states like Nevada and to try and dethrone the Mexican 8 reales as the Chinese preferred trade coin.”

Nowadays, chopmarked Trade dollars trade on the collectible coin market.

David Reimer has spent the past 15 years collecting chopmarked Trade dollars. He’s assembled the highest ranked, complete PCGS registry set of them, viewable here: http://www.pcgs.com/setregistry/alltimeset.aspx?s=19247.

David Reimer's chopmarked 1875 Trade dollar.

David Reimer’s chopmarked 1875 Trade dollar.

“There’s a fairly strong market,” he said. “There’s a group that’s collecting them. A lot of people have put together some really nice sets. However, prices are usually lower than nonchopmarked examples.”

How is it that chopmarks can hurt a Trade dollar’s value?

“For common dates, chopmarks significantly lower the value of the coin, sometimes by 50 percent or more,” Reimer said. “Also, it depends to some extent on how many chops are on the coin.  Lightly chopmarked coins sell for more than heavily chopmarked coins. Coins with interesting or unusual chopmarks also sell for more. Each chopmarked coin is unique and the price for each one depends on a number of factors including eye appeal.

“However, there are a couple of dates, especially the 1875 and the 1878-CC, that are very rare chopmarked.  For those two coins, chopmarks raise the value of the coin significantly.  If a chopmarked example of either one of those came on the market it would likely go for multiples of what an unchopmarked one would go for.”

He said chopmarked 1875 and 1878-CC Trade dollars are rarities because of two factors: location and mintage.

“There are few of the 1875 chopmarked with only about ten known,” Reimer said. “I’ve seen one or two on the market. A lot of the Trade dollars minted in San Francisco went to China. Same with the Carson City ones. Philadelphia was on the other side of the country and had a much lower mintage (218,900 coins to Carson City’s 1,573,700 or San Francisco’s 4,487,000).

“I bought my 1878-CC in 2000 and I don’t think I’ve seen one come up to auction since. About half the mintage of 97,000 was melted down. The other half was dumped into circulation in Nevada. There’s about 12 chopmarked examples known.”

A chopmarked 1878-S Trade dollar.

A chopmarked 1878-S Trade dollar.

When it comes to grading chopmarked Trade dollars, it can be tricky, said Gullberg.

“The current standard is to grade the coin as if it weren’t chopped and then add the ‘details’ of the chopmarks,” he said. “Very heavily chopped coins can’t really be graded as they may be completely defaced.”

Reimer said there are some key areas collectors can use to help grade Trade dollars, provided they aren’t chopmarked over.

“I look for wear, particularly on Miss Liberty’s knee on the obverse and the eagle’s feathers on the reverse. Luster and strike are important factors as well,” he said. “Heavily chopmarked coins are more difficult. You just have to do the best you can with the details you can see.”

Grading standards for chopmarked Trade dollars vary between grading services.

PCGS has certified chopmarked Trade dollars using the 1-70 grading scale and lists them as a separate variety since early 2003. Chopmarked Trade dollars may still receive details designations, meaning a numerical grade can’t be assigned if there is significant damage to the coin besides the chopmarks.

A chopmarked 1873-S Trade dollar.

A chopmarked 1873-S Trade dollar.

Currently, PCGS has seen just over 1,000 chopmarked Trade dollars. The most commonly seen is the 1875-S with 239 seen between the S and S over CC mintmark types according to the population report.

Scott Schechter, vice president at NGC, Sarasota, Fla., said chopmarked Trade dollars submitted to NGC are identified as chopmarked and are assigned a details grade.

“The grade accords with their level of wear only,” he said. “This is consistent with our handling of nearly all coins that have received some form of post-minting alteration by an unknown maker.”

Their policy appears on the NGC website, under “Mechanical Damage” here: https://www.ngccoin.com/coin-grading/details-grading/.

Collectors should be aware there are counterfeit chopmarked Trade dollars, said Gullberg.

“Now huge numbers of fakes are coming out of China and faked chops are just another way to fool buyers into thinking the coin is genuine,” he said. “After all, a chopped Trade dollar usually sells at a discount then no one would deliberately try to reduce the selling price, right?”

A chopmarked 1874-S Trade dollar.

A chopmarked 1874-CC Trade dollar.

If a chopmarked Trade dollar is suspected of being counterfeit, do the standard anti-counterfeiting tests. Check the weight, which should be 27.22 grams plus or minus the .097 gram weight tolerance. A worn example may weigh less. The diameter should be 28.1 millimeters. Additional tests for metal content and tooling may be necessary.

When it comes to collecting chopmarked Trade dollars, there’s a backstory behind every coin, said Reimer.

“These were made to use over in China,” he said. “You have a coin that was minted, shipped across the Pacific, stamped by a merchant, used in trade and then ended up back in the U.S.”

Imagine if each chopmarked Trade dollar could talk.

This article was originally printed in Numismatic News.
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