Daily globe. [volume] (St. Paul, Minn.) 1878-1884, 1878-08-28
TREASURY DEPARTMENT,

TREASURY DEPARTMENT,
OFFICE OF THE DIRECTOR OF THE MINT,
WASHINGTON, D. c., Aug. Ia, 1878.
To the Editor of the Indianapolis Journal
! l have your letter of the 18th instant rela-
| tive to the value Of the trade dollar, and re-
| questing to be informed at what rate the
government paid these dollars out and how
they got into circulation.
| The trade dollar was authorized to be
coined by the act of February II, 1873, and
was not intended for circulation in the
United States, but for export to China.
| That empire possesses no mint for the
coinage of gold or silver, and depends upon
! foreign coins for its domestic circulation,
and until the institution Of the trade dollar
this principal shipments of coin to China
were in the form of Mexican dollars.
| The trade dollar was designed to compete
with the Mexican dollar, and therefore was
made trife more valuable, about two mills
per piece, thus not only afording market
| for the surplus silver of the mines on the
Pacific coast, but furnishing merchants and
importers from China with silver in a oon-
venient form for payment for commodities,
instead of their being obliged to purchase
1
! At the time of the passage of the act au-
| thorizing the coinage of the trade dollar,
| silver bullion was worth in London about
| SO 1916 pence per ounce, British standard,
at which rate the bullion or intrinsic value
of trade dollar was l03 37-1OO cents in
gold. Fluctuations in the value of silver
were not so wide at that time as in suisse
quent years, and, taking the average value
for the year 1873, the trade dollar was in
trinsieally worth 102 $40 cents in gold.
This fact alone was sufficient to keep these
coins effectualiy out of circulation, and in
sured their use for the purpose for which
they were intended.
The act above mentioned made them, how
ever, a legal tender in sums not exceeding
SO in any one payment, which limited their
use in circulation after the fall in the price of
silver reduced their bullion value below their
nominal value.
AS the price of silver continued to fall
rapidly and trade dollars were being circu-
lated to q considerable extent in the Pacific
States, Congress, by a joint resolution of
July %, 1876. abrogated the legal-tender
quality of the trade dollar. At this time,
July, 1876, silver had fallen to the lowest
price on record, and the bullion value of q
trade dollar was only so 40 cents in gold it
afterward rose rapidly, and in December of
the same year the bullion value of that
piece was 101 cents gold. Since that date
the fluctuations in the value of silver bull
lion, and, consequently, of the trade dollar,
have not been SO great, and have been COM
prised within range of II cents on the
dollar.
Under the coinage act which authorized
the coinage of trade dollars these pieces we're
| coined for depositors of silver bullion at the
minis, and charge imposed for coinage at
rate not to exceed the actual cost to the
government of manufacture; by this act
any owner of silver bullion could have the
same coined into trade dollars. They, there
fore, were not issued or paid out by the gov
eminent in payment of obligations or ex-
changed for other money.
The standard silver dollar and silver frac-
tional coins are coined from silver bullion
purchased by the government for that pur-
pose, and on its own account, and are not
coined for depositors, differing in this re-
spect from the trade dollar, which was SO
coined.
It may be readily seen that whenever the
price of silver,fell to 81 point at which the
bullion value of the trade dollar, added to
! the cost of coinage to the depositor, was less
] ULdu It's AdCe Oh uOLlllldI value, III COuiu Dt
placed in circulation at profit, by specula-
tors, to the extent of it's legal tender.
The joint resolution repeating the legal
tender of the trade dollar also empowered
the secretary of the treasury to limit its
coinage to the actual export demand; but
this was not sufficient to. prevent depositors
| of silver for returns in these coins divertine
them from their true object and placing
them in circulation, and their coinage has
since been entirely suspended by order OF
the secretary of the treasury.
Most of the pieces in circulation east OF
the Rocky Mountains have been coined and
placed in circulation since the passage of the
act repeating the legal tender of the trade
dollar.
''It can not, therefore, be rightfully
charged ''that the government has per-
petrated swindle on the people in putting
the trade dollar out as a dollar and ther
marking it down to ninety cents,'' for the
fact is that the government has endeavoret
to keep the trade dollar in its lawful ant
4 proper channel, and that, from ignorance o
the law relative to this coin, parties have takel
them in ordinary business transactions whel
!, they could have been lawfully refused.
AS to-day's London quotation for silve
bullion is 5235 pence per ounce, British
standard, the lowest price for nearly tw
, years, the trade dollar is worth as bullio
, 80 4-10 cents per piece. Very respectfully
r. E. PRESTON, Acting Director.
ALL AROUND THE GLOBE.