Q.David Bowers
Despite earlier reports of shortages and rosy predictions for its future, the trade dollar was reported as "fast becoming a drug on the market" in 1876. The San Francisco Chronicle noted:
Our banks and money broker offices are becoming glutted with them. Their greater intrinsic value as well as their novelty threatened for a while to crowd the familiar half dollar and the handy quarter out of sight. Chinamen remitting their hard-earned savings to their far distant land would have nothing but trade dollars. Oriental commerce was, and still is to a large extent, conducted on the solid basis of this bright, new, and ringing silver representation of value. But the Orient, like San Francisco, is beginning to find that it is possible to be surfeited with even so much coveted a treasure as the trade dollar. The result is that a reaction has set in against the coin on this market, it no longer enjoys a preference over other silver. On the contrary, although a trade dollar is intrinsically worth eight cents more than two half dollars, the two halves will sell in the street from a half to three quarters of a cent more than the dollar. The reason for this is primarily because of the superabundance of the latter. But there is another reason which is not generally understood. Halves and quarters of the coinage of the United States are legal tender for all debts up to a certain amount; the trade dollar is not legal tender at all for any amount. It is merely a stamped ingot, having a certain value, like an ounce of gold, diamond, or a bushel of wheat. It is a commodity, the value of which Iluctuates according to the supply and demand.
The preceding legal tender reference relates to Congressional action on July 22, 1876, which revoked the legal tender status of trade dollars and limited their coinage to export purposes. After this time many' employers and others who paid wages would buy trade dollars at a discount and use them to pay workers. The recipients would spend them at face value, with merchants and others taking a loss when they subsequently were forced to sell them at a discount to banks. This practice was widespread, and many articles concerning the abuse were printed. By 1883 the silver in a trade dollar was worth only about 85 cents.
On February 19, 1887, legislation was passed which provided for the redemption of trade dollars which had not been mutilated. Over 8 million pieces came back to the Treasury, including about 2 million which were returned from China.
Trade dollars were coined for circulation from 1873 through 1878. After that time commercial production was discontinued. From 1879 until 1883 coinage was limited to Proofs struck for sale to collectors as part of the yearly sets.
Early in the 20th century numismatists were startled to learn that Proof trade dollars dated 1884 and 1885 existed. This discovery, which came through William Idler and John W. Haseltine, who had close connections with the Mint, aroused suspicion. Although Haseltine stated that 10 1884 trade dollars were struck and, later, that 5 1885 pieces were minted, Edgar H. Adams reported that 264 examples of the first date were produced. Farran Zerbe asked if the situation was a Mint "deal" and wrote an article for The Numismatist, which said, in part:
Seven of the ten trade dollars known to have been struck dated 1884 were sold by one dealer within a few months at prices ranging from $150 to $400.
The trade dollar, which for all time will be remembered as one of Uncle Sam's very few repudiated obligations, had nothing associated with its coinage to make it of particular interest to the numismatist until a few months ago when specimens dated 1884 came on the market, and the not previously known date of this coin has since caused it to be a discussion of considerable interest.
As to why trade dollars were coined in 1884 and not entered in the reports of the Mint there is no explanation. That ten pieces, and ten only, were struck is now an accepted fact. That their existence was surrounded with mystery and guarded as a secret for almost 25 years, is but one other of the gradually coming to light unexplainables from the old money mill that stood on Chestnut Street in Philadelphia. Of the ten specimens recorded as struck, two of them have not been located; of the other eight specimens, Mr. A. M. Smith has selfishly guarded one for many years; another collector, unnamed, did likewise, and six were the property of one man. Not many months ago these six came into the possession of Capt. John W. Haseltine, and then, for the first time, it was a published fact, with the coin in evidence, that 1884 trade dollars existed ...
That the issue of trade dollars in 1884 was hinted at and doubted is shown by the following, written by the late Ed. Frossard, a numismatic expert and authority of his day, and published in his journal Numisma, March, 1884:
Our critic of the Sandham sale recently, almost openly, insinuated that trade dollars have been quietly manufactured at the Mint during the present year; in other words, that not-withstanding the positive assertions of the Mint authorities to the contrary, a trade dollar with the date 1884 does exist.
We hold that the plain but positive statement of the Mint officers on this point should be considered conclusive evidence, and they say that no trade dollars have been issued in the Philadelphia Mint, nor in any mint of the United States during the present, or dated 1884.
But as doubts on this point may still exist in the minds of those who heard the report, we are authorized to make the following offers: $100 cash each for any number of United States trade dollars of 1884, coined at the Philadelphia or other United States mint; $25 cash down to anyone who will show us such a dollar.
It is time that absurd and untruthful if not slanderous statements about so-called "deals" at the National Mint should cease. The present management has proved itself most honorable, impartial, and just, and no one has unusual facilities to obtain pattern pieces and Proof sets, all collectors in this respect being treated alike; that is, what is obtainable by one at the Mint is obtainable by all ....
Farran Zerbe then noted in his article, "In the light of late developments this [Frossard's 1884 commentary] is somewhat amusing to read. There must have been so-called 'deals' at the Mint."