Ottumwa weekly courier. (Ottumwa, Wapello County, Iowa) 1872-1899, 1878-09-18
TRADE DOLLAR AGAIN.
Letter Of Secretary Sherman 70 Mr..
0ooth-orlgln, Value and Probable
Destiny Of This Coin.

SIR hasten to fulfill the prOmis
made you that upon my return {,
the department 1 would write yo,
fully concerning the trade dollar, An,
the present depreciation In its value
The coinage of this dollar was au
thorized by the coinage act of Feb. II
1873, in words as follows:
"That any owner of silver bullioI
may deposit the same at any mint, {,
be formed into bars or into dollars o
the weight of APO grains troy, desig
mated in this act 80 trade dollars,
and the charges for convert
ing standard silver into trade dollars
for melting and refining, when bull
lion is below standard, FOR tougher
ing when metals are contained in Il
which render it unfit for coinage, fol
copper used for alloy, when the bul.
lion 10 above standard, for separating
the gold and silver when these metall
exist together In the bullion, and fol
the preparation of bars, shall be fix.
ed from time to time by the Director
[of the Mint, with the concurrence
Of the Secretary Of the Treasury, 60
as to equal, but not exceed, in their
judgment, the actual average cost to
each mint and assay Office Of the ma
terial, labor, wastage and use of ma
chinery employed In each Of the cases
aforementioned"
As its name indicates, the purpose
of this coin was for trade, not for cir
culation, though by classifying il
with other silver coins the law made
1t legal tender to the amount of five
dollars in any one payment.
At the time of the passage Of the
act of the actual tvalue Of this dollar,
including the charge of IL cents for
coinage, was . little more than 81. .O4
in gold.
Under such circumstances there
could be no object for the owner to
put the coins into circulation, and
consequently they were exported
mostly to China, where, from lack of
circulating medium, these pieces,
convenient in size and bearing the
guarantee of . great government as
to their weight and fineuess, obtained
an extensive circulation, and created
q market for the silver Of the Pacific
States, as intended by the act.
After . few months, however, an
unforeseen depreciation in the value
in the value of silver bullion occurred
and in the early part of 1875 this de-
probation reached such q point that
81 in gold would purchase more than
the necessary amount of silver for Q
trade dollar and pay for its coinage.
Under such conditions, dealers in
bullion found . profit in putting
trade dollars in circulation at par in
the Pacific states, where the currency
was on gold basis, but the coin be-
ing legal tender for only five dol
lars, its circulation was necessarily
limited in amount az well as restrict
ed in locality.
The people of the Pacific states,
however, objected to its use at all for
circulation, and tho attention of Con-
gress having been called to the mat
ter, on the 9Th Of May, 1876, Hon.
Samuel j. Randall, of Pennsylvania,
introduced into the House . bill the
third section of which repealed the
legal tender quality of these coins.
On the 10th of June following, Hon.
s. s. Cox, of New York, reported the
measure to the House, urging it's
adoption.
No objection was raised, and it te-
come . law July %, 1876, without
modification or an opposing voice or
vote in either house, and is as fol-
lows:
"That the trade dollar shall not
hereafter be legal tender; and the
Secretary Of the Treasury is hereby
authorized to limit from time to time,
the coinage thereof to such an amount
as he may deem sufficient to meet the
export demand for the same.'
Up to that time Excepting . few
days., and for several months there
after, the trade dollar cost more than
a paper currency dollar, and conse-
quently none Of the coins got into cir
culation in other than the Pacific
states.
Owing to the appreciation Of the
paper currency, however, in the fall
Of 1877, the trade dollar became of
less value than the paper dollar, and
in december of that year large num-
ber of them were put in circulation,
at their face yalnc at q profit to the
owners Of the bullion.
Apprehensive of such misuse of the
coins, on the 18th of October in that
year ordered the discontinuance of
their coinage at the mint at Philadel-
phia, and four DAYS later at the other
mints. Meanwhile the department,
In reply to numerous inquiries, had
uniformly stated that the trade dollar
possessed only q commercial value
dependent upon the price Of silver
bullion.
II will be seen that the coins were
put into circulation months after the
passage Of the act taking from them
their legal tender character, aud
mainly after their coinage had ceased.
But in their use rs money the de-
partment has never had any interest
or derived any profit. For the ex.
pense of thcir coinage the owner of
the bullion reimbursed the govern
ment, and this ended the connection
of the government with the transac-
tion. At NO time and ON no account
have they ever been received or paid
out by the Treasury, and it is cause
Of regret that SO many of our people
should have accepted them at their
face value, thus enabling their owners
to put them into circulation at con.
siderable profit.
Under date Of July Is, 1878, the Di-
rector Of the Mint published tables
from which the value Of these coins
can be ascertained, and the terms on
which they are received at the mints
He does not advise any one to dispose
of them at such rates. The law under
which the department buys bullion
with which TO coin the standard sill
yer dollar, requires tho same to b.
bought at the market price, and it car
purchase trade dollars only - bullion
Possibly in time these coins will ilnd
a ready market in China, at nearly OF
quite their face value, for circulation
as coin.
In this connection permit me to cor
rect any Misrepresentation - to tn,
purpose and effect Of the Director
circular. Az early 80 August "a, 1876
the department informed an inquirer
that the trade dollar had only bull
lion value, and this information ha
been repeated scores of times, An,
published by the press throughou
1 TUG CUuutEys ~ 6VOlU tO0 l8UOr y
preparing manuscript letters, the Di
rector emb odied the information in
circular, adding thereto tables for th
computation Of such value. Their
WAS no new decision involved in th
circular, though possibly its publici
ton may have hastened the deprecii
tion of the coins to their true value
an event which was inevitable, an
could not have been much longer d
layed. Very respectfully,
JOHN. SHERMAN, Secy.
i Capt. James Slocnm was trawlir
for bluefsh in Warren River, Masa
chusetts, when . huge fish-hay
. swooped down on his bait, and q
ried 1t of. Recovsring from his d
prise, the CsptAin hegan hauling
, his line, and, after ton minutes b1r e..
. labor. secured the bird. N"w., N",,., o,
: question arises. 10 this dsh tsrhspss
Q not ?-Detr0it Free PsssssS ~ y ol
D not; but we are ren,ssse@s note0 man.
the late Sam Drss.sS@o sS@oanty: BAN bad
L = a tAA Aa3k -As