The story of the once hated, despised, depreciated U.S. silver dollar known as the Trade dollar is an interesting one. Authorized by the Coinage Act of 1873, the Trade dollar was initially intended for use in trade with the Orient. However, the coinage act allowed the coin a limited legal-tender value in the United States.
From the moment of its first coining, in mid-1873, the Trade dollar entered domestic circulation. The coins, which could be tendered only in small payments, but could be minted at the request of any silver depositor, quickly became a drug on the market. With the fall of silver brought on by several factors, including the Bonanza strike at Virginia City, Nev.’s Comstock Lode, Trade dollars depreciated well below their dollar face value.
Those who accepted the coins at face value, often in payment as wages, did so at a significant loss. Soon banks and merchants began refusing to take the coins or offered to do so only at a price near the coin’s bullion value.
In 1883, by which time the Trade dollar had been demonetized for seven years, merchants in New York organized a boycott against the unwanted dollar.
“The popular agitation against the use of the trade dollar is being carried on so vigorously that much inconvenience and bickering has resulted,” reported the June 30, 1883, issue of the Brooklyn Daily Eagle. “It is probable that the movement inaugurated in New York and extended over the country will drive the clumsy coin from general circulation.”
The boycott even had its own surely popular song, “respectfully dedicated to the United States Government”—the last verse and chorus for which went:
Than others to greet all that’s fair,
But when we are cheated on all hands,
It’s time for a change to appear.
We honor the flag we shall all see
At home, at abroad, or at sea.
But now it has come to a standpoint,
No more trade dollars for me.
With eighty-five cents on the dollar,
Paid out to him night and by day,
What shall we do with this dollar?
Just ask what the Chinamen say.
It took until 1887 before the government agreed to redeem Trade dollars at face value, in exchange for standard silver dollars or subsidiary silver coins. However, by that time, many of the coins had fallen into the hands of speculators, and those who earlier had accepted them in good faith had already absorbed their loss.
In the 1980s, short on money and needing an advanced typewriter for use in writing my master’s thesis, I traded my Very Fine 1878-CC Trade dollar to a dealer friend. The coin, the rarest regular date in the set, at the time had a retail value of between $300 to $400. Today it lists for more than $1,000.
The typewriter, which recorded each keystroke onto a magnetic card for easy playback and editing, lasted long enough to complete my thesis on the Crime of 1873 before it ended up as scrap metal. But the trade for it was worth it at the time, and a far cry better than anyone who handled Trade dollars in the 1880s ever got.
Today you can add a Trade dollar to your collection for a little over $100 in lower grades. If you’re interested in learning more about the history of the Trade dollar, read my feature in the August issue of Coins magazine. There you’ll find the story of who was behind its coinage and the rest of the song.