Perrysburg journal. (Perrysburg, Wood Co., O. [Ohio]) 186?-1965, 1878-08-30
The Trade Dnllar.
THE following letter from the Acting
Director of the Mint is of public inter-
est at this time:


est at this time;
TREASURY DEPARTMENT,
OFFICE OF THE DIRECTOR OF THE MINT.
WAsHINaToN, ID. c., Aug. "a 1s7S
To the Editor of the indianapolis Journal
1 have your letter of the llth inst, relative
to the value of the trade dollar, and request
ing to be informed at what rate the Govern
ment paid these dollars out and how they got
into circulation.
The trade dollar was authorized TO be coined
by the act of Feb. II, 1873 and was not in
tended for circulation in the United States,
but for export to China.
That Empire possesses no Mint for the coin
age Of gold or silver, and depends upon for
eign coins for its domestic circulation, and
until the institution of the trade dollar the
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 triile more valuable, about two mills
per piece, thus not only affording a market
for the surplus silver of the mines on the Pa
ciflc coast, but furnishing merchants and i'm
porters from China with silver in convent
ent form for payment for commodities, in
stead of their being obliged to purchase
Mexican dollars for that purpose.
At the time of the passage of the act
authorizing the coinage of the trade dollar,
silver bullion was worth in London about
80 1916 pence per ounce, British standard, at
which rate the bullion or intrinsic value of a
Fluctuations in the value of silver were not
so wide at that time as in subsequent years
and, taking the average value for the year
1873, the trade dollar was intrinsically worth
l02 $40 cents i'll gold.
This fact alone was sufficient to keep these
coins effectually out of circulation, and in
sured their use for the purpose forwhich they
were intended
The act above mentioned made them, how
ever, a legal tender in sums not exceeding 50
OaVmpnt. limited
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 rap
idly and trade dollars were being circulated to
| 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 a trade dollar was only
so 1-10 cents in gold; it afterward rose rapid
| ", and in December of the same year the
bullion value of that piece was lOl cents gold.
| Since that date the fluctuations in the value
| of silver bullion, and, consequently, OF the
| trade dollar, have not been so great, and have
been comprised within range of IL 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 Mt the
mints, and charge imposed for coinage at a
rate not to exceed the actual cost to the Gov
ernnent of manufacture; by this act any
owner of silver bullion could have the same
coined into trade dollars. They, therefore,
| were not issued or paid out by the Govern
ment in payment of obligations or exchanged
| for Oher 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 respect
from the trade dollar, which was so coined,
1t may be readily seen that whenever the
price of silver fell to point at which the bull
ion value of the trade dollar, added to the
cost of coinage to the depositor, was less
than its face or nominal value, it could be
placed in circulation at a profit, by specula-
tors, TO the extent of its 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 Tor
returns in these coins diverting them from
their true object and placing them in circuia-
ton, 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.
1t cannot, therefore, be rightfully
charged - that the Government has perpe'
tratcu SWlnule on lne peOplc III putIihS bie
trade dollar out as dollar and then marking II
down to ninety cents,'' for the fact is that the
Government has endeavored TO keep the
trade dollar in its lawful and proper channel
and that from ignorance of the law relative "a
this coin, parties have taken them in ordinary
business transactions when they could have
been lawfully refused.
As to-day's London quotation for silver
bullion is 529s pence perounce, British stand
ard, the lowest price for nearly two years, the
trade dollar is worth rs bullion 80 40 cents
per piece. Very respectfully
r. K. Preston, Acting Director.