The sun. [volume] (New York [N.Y.]) 1833-1916, 1878-09-05
TRIBE DOLLtR DEPRECIl TTON
John sherman Trying 10 Explain n and the
Reason. Therefor.

Reasons Therefor.
WASHINGTON, Sept. T. Shcrman's letter
giving the history Of tho trade dollar. sent out
tonight TO an inIuirng friend. omits an inter.
csting bit of the history Of the trade dollar Last
October. whom information at tho Treasury Do
partmcnt showed that the trade dollar was pass
ing into circulation Mt the Easr at the same time
that the importation OF the Mexican dollar was
giving n silver circulation 10 the valley Of the
Mississippi. Sherman became npprchensivo that
when the absence Of n legal tender quality was
discovered thc.con would dopreciae and the
Government b. charged with bad faith. He de-
tcrmined accordingyt TO suspend ts coinage. TX
ccpt for expectation. Several prominent officers
OF tho Treasury Department however urged
strongly that different course be- taken. Tho
session " Congress was justapproaching. The
agitation for the silver dollar was lust begin
ming. and they proposed that 1t should he met
by dealing out the trade dollar with liberal
hand ut the headquarters of the silver move
mcnt in Chicago. Cincinnati and st. Louis.
They argued that when people ascer.ainod that
n dollar OF 400 grains. and stamped wns
worth only ninety cents. they would stop calling
for dollar Weighing seven and half grains
less. Sherman refused Ito follow this advice
hut the trades whicli' had already slpped out
have laid him open To- M serious criticism "a II
he had followed this nvcr.
! arc dragged out from circulation und their col
lection Tor shipment abroad made possible
they have been SO n great mass Of letters IN the
| Treasury Department prove. put in circulation
| in small sums 10y country banks and manufac.
| tories. Additions iothe CURRENCY SO mnda aud
which are not suitable for remittance by mail
or express. eddy round and round In the same
neighhorhood without leaving. Secretary Sher-
man evidently eNpc'ts 20 make use Of this
principle in putting the standard silver
dollar on The market BY "a sort of
| natural selection tho banks and merchants
in country places will Gull out the paper bills Of
small sizes for Iemitances. and the silver Will
replace Thorn. Then. also. rs the silver is sent
express charges whom worn and deiaccd notes
mr." sent to tho Treasury ior redemption. this
1 triling percentage will facilitate the intruduc-
| tion OF silver into small communities. from
which it will not return. Many Of the national
| posts in the standard silver dollar. and in
| quiries have been addressed here asking
| whether deposits made In that coin can he re-
fused. Comptroller Knox says that they can DO
| refused.
In his letter Sherman snvs
| The coinage Of the trade dollar author
! lied 10y the Coinage act of Feb. H. 1873. As its
name indicates. the purpose Of this coin was
| for trade not for circulation though by classify
| ing Il with other silver coins the law made 1t n
| legal tender 10 the amount of IS in any one pay
ment. At the time Of the passage Of the aci the
actual value of this dollar including tho charg"
| on cents Tor coinage. was little more than
| l0l in gold.
! Under such circumstances there could be no
object Tor the owner To put the coins into circu-
laiion. and consequently they were exported
|
| ING medium. these pieces convenient in size.
| and bearing the guarantee Of a great Govern
| ment ms To- their weight and nneness, obtained
an extensive circulation, and created market
| Tor the silver oil the Pacific States as intended
! by the act
After few months. however. an unforeseen
| depreciation In the value of silver bullion oc-
CURED, and in the early part Of 1876 this de-
| probation reached such point that one dollar
| in gold would purchase NOR" than the necessary
amount of silver for a trade dollar and pay for
Under such conditions dealers in bullion
| found profit in putting trade dollars into cir
culation at par in the Pacific States. where the
| currency WAS upon a gold basis. but the coin
being legal tender for only So. it, circulation
was necessarily limited IN amount as we'll as
The people Of the Pacific States objected to its
use AZ n for circulation; and the attention II
| the sth Of MAY. 1876. the Hon. SamuelJ Randall
introduced into the House bill the third sec
Of these coins. and It became n law.
un TO that time iexcentlne fcw days and for
more than paper currency dollar aud conse-
quently none Of the coins got into circulation in
other than the Pacific States.
| Owing To- the appreciation Of tho paper cur
! reney. however in the fall 81 1877 the trade dol
| lar be'ame Of less value than the paper dollar
| aud in December Of that year a large number OF
| them were put into circulation NJ their face
value at a profit To- the owners Of the bullion.
| ApprehonsiNe OF such misuse of the coins on
| the 18th OF October in that year ordered tho
| dlscontinuance of their coinage at the mint at
Philadelphia. and four days later at the other
| minis. Meanwhile the department. in reply 10
| numerous Inquiries. had uniformly stated that
| thr trad" dollar possessed only "A commercial
| value depending upon the price Of silver bull
| lion.
Il will be seen that the coins were put into cir.
| culation months after the passage Of the act
| taking from them their lcgnl-trnder character
| In their coinage and issue the department
| has never had any interest or derived any
| profit For tho expense Of their coinage tho
! owner of the bullion reimbursed the Govern
ment and thus ended ia" connection 81 the Gov
eminent with the transaction. Al no time and ON
! no account hAN" they ever been received or paid
| out by the Treasury and II Is n cause ~ regret
that so many Of our people should have nc
| cepted them at their face value. thus enabling
their owners to put them into circulation at a
considerable profit.
Under date Of July 25. 1873 the Director Of
| il.c Mint published tables from which the value
advise any one tn dispose OF them M such rates
| The law under which the Department hnys
| bullion with which to com the standard silver
dollar requires the same 10 he bought al the
only as bullion. Possibly in time these coins
will find n rrady market in China at nearly or
quite their face value Tor circulation AS coin.
In this connection permit me to correct my
Of the Directors circular. A. early as Aug a.
1876 tho department. informed An inquirer
that tho trade dollar had only bullion value
and this information has been repeated scores
Of times and published by the press throughout
the country. To avoid IT," labor OF preparing
manuscript letters tho Director embodied tho
Information in n circular. adding thereto tables
for the computation OF such value There WAS
no now decision involved in tho oiroular though
possibly lis publication may have FASTENED tho
depreciation Of thu coins 10 their true vnlue-nn
event which WAS inevitable aud could not have
been much longer delayed
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