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Philadelphia Trade dollars struggle for status

Gre0925a.jpgThe Trade dollar seems to have an absolutely terrible time when it comes to getting significant recognition. Trade dollars frequently struggle to achieve the sort of prices at auction that we might expect based on their numbers known. The Philadelphia Trade dollars seem to struggle more than any others.

Of course, low prices are not bad news to everyone. If you want a great value when it comes to silver dollars, it is hard to find a better opportunity than Trade dollars, especially Philadelphia Trade dollars.

Gre0925b.jpgOne of the problems with Trade dollars has to be their history. Frankly, many see the Trade dollar as somehow not really a silver dollar like a Seated Liberty or Morgan dollar is. The Trade dollar is in fact different in some ways, but to see them sometimes put at the end of silver dollar listings, behind even Susan B. Anthony or Sacagawea dollars, does not really seem right. They were silver dollars of the United States for a time and although some odd things happened, they correctly fall between Seated Liberty and Morgan dollars for their limited period.

At least in theory the idea of a Trade dollar had to look like a good idea. After all, back in the early 1870s the United States had what might delicately be described as a silver problem. It was not the sort of normal problem one might expect ? the country literally had too much silver thanks to the famous Comstock Lode in Nevada.

Gre0925c.jpgThere was no real problem in 1870, but smart people could see that not far beyond the horizon, if silver kept emerging from the ground around Virginia City, Nev., at the existing rate, eventually the market price would have to go down. The United States simply could not use so much silver.

Any idea that would use greater amounts of silver had to seem like a good thing, especially to the mine owners, bankers and investors out West.

Gre0925d.jpgThe desire to use more silver had a natural outlet. Prior to the 1870s there had been relatively little use of silver when it came to making silver dollars. Big mintages of silver dollars would consume a lot of silver, but Americans really did not use silver dollars in large numbers. The public opted for small gold dollars in the 1850s as they were apparently seen as more convenient than walking around with large silver dollars.

During the Civil War there had been a suspension of specie payments, and in most parts of the country there were virtually no coins in circulation. What limited use there was of silver dollars seems to have been the historic use stretching back to the 1850s, and that was either as reserves or to be sent to other nations in international trade.

It was international trade that raised increased interest in the idea of a trade or commercial dollar.

Gre0925e.jpgAlmost from the time the country was independent, merchants in the United States had looked toward the horizon and seen opportunity for greater markets. For decades that opportunity had not been fully realized, but by the late 1860s, with the Civil War heading into the history books, more and more were seeking to open up trade with other lands. A popular favorite was China, especially with merchants and bankers in the West. After all, China was a large nation and a more natural destination from the port of San Francisco than was Europe.

Gre0925f.jpgThe situation in China had been particularly frustrating. When a ship pulled into a port in China to purchase silk, tea or any number of other items available there, the Chinese merchants had proven to be difficult. They wanted silver coins, especially large silver coins like those from Mexico. To trade U.S. gold or silver coins into the issues favored by the Chinese merchants was costing the U.S. businesses money. There had been attempts to create coins for use in the trade with China, such as a special 1859 Seated Liberty dollar mintage from San Francisco, but the results were not an ideal solution. Nor were half dollars, which at other times had been used, the answer. The Chinese merchants mightend up accepting the U.S. silver, but it was still the silver of other lands that they wanted.

The situation came to a head as people realized that sitting in the state of Nevada was more silver than the United States could possibly use.

Western representatives got the idea that they could kill two birds with one stone by authorizing a slightly larger silver dollar to be used in international trade.

The resulting silver dollar containing 420 grains of .900 fine silver, instead of 412.5 grains, ultimately became known as the Trade dollar. It would be authorized in 1873. It had to seem like the best of all worlds ? the Chinese would accept them, and in the process some of the excess silver was being removed from the domestic market. If the whole thing worked as planned, it might solve all the problems in one bold stroke.

As it turned out, the idea did work, although not as well as some might have expected. Trade dollars were accepted at least in some Chinese ports, and the mintages were certainly far larger than any silver dollar totals of the past.

The wheels came off the whole idea in 1876, however, when their legal tender status was revoked. Despite having the word DOLLAR it its design, the Trade dollar was no longer a dollar and worth only its silver value. That silver value promptly fell.

In theory Trade dollars were only to be made for export, but that did not prevent numbers of them from trickling into circulation and trading for less than their face value. Of course, if you accepted a Trade dollar as a dollar, you lost money. By the time they were discontinued in favor of the Morgan dollar in 1878, the situation was unfolding that the 412.5-grain Morgan dollar was worth a dollar while the 420-grain Trade dollar was worth less than 90 cents, and its value was falling regularly. The government was eventually forced to honor and melt large numbers of Trade dollars, but the damage had been done.

For the collector, the Trade dollar is interesting and not well known. There were varieties, the group minted from 1873-1876 having the ribbon ends on the obverse pointing left while they are pointing downward in the later years, along with other differences.

For those who like to use mintage totals as a guide to prices, the Trade dollar can be a really frustrating coin. Opportunities were numerous for things to happen that would cause the Trade dollar to be less available than might be expected. They were exported by the millions, but some returned while others were lost forever. In the group that did return were many coins with the chopmarks from Chinese merchants. While they make a fascinating collection, other collectors want their coins without such marks. The United States melted millions when it was forced to redeem Trade dollars. For any given date, the number of coins shipped to China or left to circulate in the United State could vary. As a result virtually every date is a unique story.

The first Phi ladelphia Trade dollar was the 1873. As production did not take place until the authorization was passed, the Philadelphia 1873 has a somewhat low mintage of 397,500. What happened to the 1873 becomes an immediate question. The general belief has been that Trade dollars produced the first couple years were shipped in greater numbers to China than those of later years. There is another factor: it is believed that coins shipped to China were more likely to be issues from San Francisco and Carson City as they were naturally much closer to the Pacific ports for shipping.

Today the 1873 in G-4 lists for $100, but that is actually fairly low. It is not an available-date price, but it does not reflect the low mintage.

In the case of Mint State the 1873 lists for $1,050 in MS-60, which is higher than any other Philadelphia date except the 1875. Any Trade dollar is very tough in MS-65 and that is seen in a $12,000 listing for the 1873, which is higher than the most available dates but probably still low. Professional Coin Grading Service has seen just 11 examples of the 1873 in MS-65. There are also proofs of all Philadelphia dates, and the 1873 Proof-65 lists at $12,000. The most available proofs are the 1876 and 1877, now at $10,500.

Throughout the Trade dollar mintages, the Philadelphia totals were not what might be expected. They were frequently lower than the totals in San Francisco. It was logical as these coins were being made allegedly to be shipped to China. It simply made sense to concentrate their production in San Francisco and Carson City. That said, Philadelphia still produced its share of Trade dollars and many ended up in China; there is proof in the form of chopmarked examples.

Certainly in 1874 it appears that Philadelphia was at least making some Trade dollars for export as the mintage rose to 987,800. Price listings are $100 in G-4 while an MS-60 is at $925 and an MS-65 lists for $13,850. Clearly the 1874, while higher mintage, is tougher in some grades than the 1873. PCGS? population report shows that it is much more available in Mint State but not in MS-65. Only five examples have been seen in MS-65 or better with four being MS-65 and one being MS-67. As the numbers available today do not really accurately reflect the mintage, the 1874 stands as a date where there were losses. You can never be certain the cause, but in this case it would seem likely that the 1874 was exported in some numbers to China.

In the case of the 1875 we see a variety of factors at work, starting with the low mintage of 218,900. That can be easily explained by the fact that Carson City was at over 1.5 million and San Francisco nearly 4.5 million that year, and their mintages were the coins being exported to China. With that low mintage, the Philadelphia 1875 would be better, and it is, at $160 in G-4. In MS-60 the 1875 is $2,450, by far the top price for a Philadelphia Trade dollar in that grade. An MS-65 is at $13,000 and that is seemingly inexpensive as PCGS reports only three examples in MS-65 or better. We cannot be certain what happened to the low-mintage 1875, but something did as in fact it is much tougher than even its low mintage would suggest. It probably had some numbers exported and others destroyed. If you count all the 1875 Trade dollars in all grades seen at both PCGS and Numismatic Guaranty Corp., you will find that it ranks as perhaps the least-graded Trade dollar. The numbers are very close for a few dates but all the others are Carson City dates, making the 1875 the one Trade dollar from a facility other than Carson City that is difficult in virtually every grade.

The 1876 is different as it appears to be more available than its mintage of 456,150 would suggest. At $90 in G-4 the 1876 is basically priced at an available-date price. While its $925 MS-60 is higher than an available date, its $7,500 MS-65 listing is about as low as Trade dollars go in price in MS-65. It is more available in MS-65 but hardly common, with PCGS reporting 21 examples graded MS-65 or better.

The 1877 broke all the patterns as it had a mintage of 3,039,710. Ironically, this was at a time when the legal tender status of the Trade dollar had been revoked. As it turned out, the 1877 would also be the final business strike Trade dollar from Philadelphia as the following year Philadelphia would produce only proofs. With its large mintage, the 1877 is an available date. It commands only a slight premium in MS-60 at a current listing of $900 while an MS-65 does command a premium with a current listing of $16,000, but PCGS has only seen one example grade MS-65 or better. This is a case where a proof is a viable option at $10,050 as PCGS has seen 22 in Proof-65 or better.

In 1878 the Philadelphia Trade dollar was a proof-only with an estimated mintage of just 900 pieces. That makes it $13,500 in Proof-65 although it is available with PCGS reporting 26 examples in Proof-65 or better. In fact, there are a goodly number in lower proof grades reported by PCGS, so it is possible to get a slightly lesser grade at a lower price.

The Trade dollar was technically replaced by the Morgan dollar in 1878, and what followed is a somewhat peculiar situation. Philadelphia kept producing proof Trade dollars until 1883. It was odd, but it adds those dates as possible dates for a collection. Prices of the proof-only 1879-1883 Trade dollars are around $10,500 in Proof-65.

As if that were not enough, there were also 1884 and 1885 Trade dollars although it is possible that they were not officially produced. In the case of the 1884, there was a window of opportunity as it appears that the Mint was ready to produce a normal proof-only mintage of 1884 Trade dollars with the likely total being 1,000 or fewer pieces. It appears that an early test was done in January of that year, and then a order was received to stop all Trade dollar production. Consequently, it is possible that the 1884 Trade dollar was perfectly legal. Ten of them did in fact end up in silver proof sets of that year. Those 10 sets containing the 1884 ended up in the hands of William K. Idler, a major coin dealer at the time. That looks a little suspicious, as does the fact that the 1884 was not offered in the market for a number of years, but the fact remains it was possibly a legitimately produced coin.

No such claim can be made for the 1885, which is twice as rare as the 1884 as its total mintage is placed at just five coins. Those five examples were clearly made for someone special because the order stopping Trade dollar production by that time was roughly a year old. We may never know precisely what happened, but when you remember that proof-only Trade dollars had been being produced since 1879, it is safe to conclude that activity at the Mint at the time was probably a little suspect on a variety of fronts.

The main point is that the 1884 and 1885 exist, and with 10 examples of the 1884 and five of the 1885, they are great rarities. They have had some trouble realizing the prices that might be expected of such rarities, although the 1885 recently topped the $1 million mark at auction. The 1884, as might be natural with a mintage twice that of the 1885, has usually sold for about half the price of an 1885.

When you consider how many are known and the prices for other coins with similar numbers known, you can easily come to the conclusion that the 1884 and 1885 are bargain-priced rarities. In fact, you could easily come to the conclusion that most Philadelphia Trade dollars are bargain priced as well, and that makes them a great group to collect and a very interesting group to study.

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