Q. David Bowers
The Year 1885 in History (See entry under 1885 Morgan dollar)
Trade Dollars in 1886
In the summer of 1886 trade dollars were worth about 75¢ in New York, a value which continued through early 1887. Wholesale merchants in particular suffered, for trade dollars moved through the merchandising system from buyer to retailer and then to wholesaler, but the wholesaler could not pass them along except to bullion brokers at a discount. (From Willem, The United States Trade Dollar, p. 134, and other sources.)
The Act of March 3, 1887
The Act of March 3,1887 provided for the redemption of trade dollars with silver dollars and other subsidiary silver coins, both of which were plentiful by that time, especially the silver dollars. At the time the trade dollar had a melt-down value of about 75¢, thus the government lost about 25¢ on each one redeemed. The redemption privilege was to extend for only six months following the passage of the act, after which trade dollars would once again be worth only bullion or melt-down value.
Redemptions of trade dollars under the Act of March 3, 1887 eventually amounted to 7,689,036 pieces, equal to about 20% of the number coined. The coins contained 6,018,921 ounces of fine silver. During the year 1887 the average price of silver was $0.97832 per fine ounce, thus such coins had a silver value of $5,887,889. The Treasury paid $1.8 million over melt-down value, but scored a public relations advantage as it laid to rest the innumerable complaints about the previously dishonored denomination.
Commentary on the Trade Dollar (1887)
In the Annual Report of the Director of the Mint, 1887, Mint Director James Putnam Kimball included the following: (For a commentary on the eccentricity of Kimball, see Walter Breen's Complete Encyclopedia of u.s.and Colonial Coins, p. 322.)
"No silver coin of the United States has longer any claim to recognition as an international coin, like the dollar of Mexico and the Levant thaler of Austria, or such as the now historical trade dollar was designed to be, and had well-nigh become-as now shown by the absorption of four-fifths of its whole coinage by foreign countries."
The same report also contained this information:
"Trade dollars were received mostly by transfer from the Treasury of the United States, and melted. The bullion contained 5,837,791.87 standard ounces, of the coinage value in standard silver dollars of $6,793,066.89. The transactions in trade dollars will be more fully explained under a separate heading on the redemption of trade dollars.
"In addition to the foreign and domestic bullion and coin deposited at the mints, silver, consisting of plate, jewelry, and old material generally, of the value of $512,848.06, was deposited during the year, against $67,156,36 in the preceding year."
The same volume contained an extensive report on the trade dollar, a wrap-up of what had occurred during the preceding 15 years. Much of the information referred to in the tables mentioned has been utilized in the present book, under entries for the individual date and mintmark varieties mentioned. Excerpts from the original 1887 'Report follow:
"The Act of February 12, 1873, which revised the laws relative to the mints and coinage, provided, section 15, that the silver coins of the United States should be a trade dollar, a half-dollar or 50-cent. piece, a quarter-dollar or 25-cent piece, a dime or 10-cent piece; that the ,weight of the trade dollar should be,420 grains troy; and that said coins should be legal tender at their nominal value for any amount not exceeding $5 in anyone payment.
"Section 21 of the same act provided that any owner of silver bullion might deposit the same at any mint to be formed into bars or into dollars of the weight of 420 grains troy, designated in that act as "trade dollars," and that no deposit of silver for other coinage should be received.
"The joint resolution of Congress of July 22,1876 (section 2), provided that the trade dollar should not thereafter be a legal tender, and the secretary of the Treasury was authorized to limit, from time to time, the coinage thereof to such an amount as he might deem necessary to meet the export demand.
"In October 1877 the secretary of the Treasury directed that the receipt of deposits of silver for coinage .. into trade dollars be discontinued, On account of a supposed demand for export, this order was So modified also admit Of the receipt of deposits at the Western 'mints for return to these coins. It was afterwards discovered that instead of being shipped abroad, many if not most of them were placed in domestic circulation. An order Was therefore issued February 22, 1878, finally discontinuing receipt of deposits for trade dollars.
"By the Act of March 3, 1887, Congress provided that for a period of six months after the passage of that act, trade dollars which were not defaced, mutilated, or stamped should be received at certain offices of the Treasury Department in exchange for a like amount, dollar for dollar, of standard. silver dollars, or of subsidiary coins of the United States, and that the trade dollars so received should not be paid out but recoined into silver dollar or subsidiary coin. By the same act the provision of law authorizing the coinage of trade dollars was repealed. "The number of trade dollars' coined at the mints of the United States is exhibited by calendar years in the following table ... A table of coinage by months will be found in the Appendix.
"Of the total number of trade. dollars there. was coined prior to. the passage of the joint resolution of July 22, 1876, taking away the limited tender quality, the value of $.15,631,450; and from that date to the suspension of the coinage, $20,327,910. Proof pieces have since been coined amounting to $6,564 (This total is made up of the official Proof productionfigures for 1879-1883 coins legally delivered and, significantly, does not include 1884 or 1885. Incoming Director of the Mint James P. Kimball, who took office inJuly 1885, had nothing to do with any of this as he merely used the figures presented by the various mints. The figures for 1885 were actually submitted by Superintendent Daniel M. Fox, who succeeded Snowden.) making the total coinage of trade dollars as stated $35,965,924.
("All possible efforts have been made by this-Bureau, with the co-operation of the Bureau of Statistics, to ascertain the number of trade dollars exported from the United States, and the number imported. Statements of trade dollars were' not given in collectors' returns of exports prior to 1877, nor-in imports, except for the years 1880 and 1881. After 1881 no trade dollars were reported by collectors of customs -as imported until after the passage of the act authorizing their redemption, when, at the request of this Bureau, subsequent importations were kept separate.)