National Republican., 1883-07-24
Secretary Folger Doesn't Believe the President
Can Increase It's Value by EdiCt
The Act of TO Says at Shall Not Here.
after Be Legal Tender"
And This Seems TO Strike tho Secretary as Very
Significant Expression,
Secretary shcrmnn's viows on the Subject
us Expressed ina 1873.

N Y. in regard to the trade dollar, of which
the following is copy:
have to acknowledge the receipt, by refer
ence from the President, of your letter of the
eleventh instant concerning the trade dollar.
Tho gist of the newspaper slip inclosed
therein by you, so far as the executive branch
of the government is concerned, is contained
in this sentence: President Arthur has
ample authority to order their receipt at the
lars" -
In this think that you lack the suppopt
of law; feel quite certain that you lack that
of legislative intention.
The name given to the coin by the coinage
act Of 1875 tho actual use to which it was at
first put in accord with the anticipation of
the law makers who passed tho act of what
the use of IL would be; tho contemporary dis
cussion and comment upon it when it was
created; the readiness of congress to take
away its legal tender quality when it was seen
that il was put to different use / and the
usage of the government through the period
of its existence-all tend strongly to show
that it may not now by mere executive order
be endowed with the prerogatives which you
attribute to it. AT any rate, in view of these
facts should hesitate to advise the Presi-
dent to exercise the power you assert for him,
rather than to await the reassembling of con-
gress and such action as it may choose to take.
You are already aware that joint resolu-
tion of congress, approved July %, 1876, pro-
vides as folows THAT the trade dollar shall
not hereafter be a legal tender, which is
very significant. As this resolution has not
been rescinded or modified, this department
has conceived that it has no authority to
order subtreasury officers to receive trade dol
'ars as indicated in your letter."
Secretary Folger incloses o copy of a letter
written by Secretary Sherman in regard to
he issue of the trade dollar and the depre-
Jiation in its value. Secretary Sherman,
after quoting the text of the act of Feb 12,
1879, authorizing the coinage of the trado
dollar, says
coin was for trade, not for circulation. though
by classifying it with other silver coins the
law made it a legal tender to the amount of
i've dollars in any one payment.
At the time of the passage Of the act, the ac-
tual value of this dollar, including the charge
of one and n quarter cents for coinage, was
little more than 81 .04 in gold.
Under such circumstances there could be
no object for the owner to put the coins into
circulation, and consequently they were ex-
ported mostly to China, where from lack of
circulating medium, these pieces, conven-
lent i'll size, and bearing the guarantee of
great government as to their weight and fine
ness, obtained an extensive circulation, and
created a market for the silver Of 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 tine early part of 1875, this de-
probation reached such point that one dol
lar in gold would purchase more than the
necessary amount Of silver for trade dollar
and pay Tor its coinage.
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 tho
n Gua
dollars, its circulation was necessarily limited
in amount as we'll as restricted in locality.
The people of the Pacific states, however,
objected to its use at all for circulation, and
the attention of congress having been called
to the matter, on the Sth of May, 1876 Hon.
Samuel j. Randall, of Pennsylvania intro
duced into the house bill, the third section
OF which repealed the legal tender quality of
these coins.
On the tenth of June following, Hon. s. S.
Cox, of New York, reported the measure TO
tho house, urging its adoption.
No objection was raised, and it became q
law June %, 1876, without modification or an
opposing voice or vote in either house, and it
is as follows:
"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 thereafter, the trade dol
lar cost more than paper currency dollar,
and consequently none of the coins got into
!, circulation in other than the Pacific states
y Owing to the appreciation of the paper cur
rency, however, in the fall of 1877, the trade
dollar became of less value than the paper
dollar, and IN December of that year q large
number Of them We're put into circulation at
their face value, at profit to the owners of
the bullion.
Apprehensive of such misuse of the coins,
on the 10Th of October in that year. ordered
the discontinuanoe of their coinage at the
mint at Philadelphia, 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
commercial value depending upon the price
Of silver bullion,
1t will be seen that the coins were put into
circulation months after the passage of the act,
taking from them their legal tender character,
and mainly after their coinage had ceased.
But in their use as money the department
has never had any interest or derived any
profit. For the expense of their coinage the
r r-lG,,yper of the bullion reimbursed the govern
meIit >&pd this ended the connection of the
government with the transaction. AT no
time and on no account have they ever been
received, or paid out by the treasury, and 1t
is n cause of regret that SO many of our peo-
value, thus enabling their owners TO put them
into circulation at considerable profit
Under date of July 25, l675, tho director of
the mint published tables from which the
value of these coins can be ascertained and
the terms on which they are received at tho
mints lieadoes not advise any one to dis
pose OF them at such rates. Tho law under
which the department buys bullion with
which to coin the standard silver dollar re-
qhires the same to be bought at the market
price, and 1t can purchase trade dollars only
as bullion, Possibly in time those coins will
find ready market in China at nearly or
quite their face value for circulation as coin.
In this connection permit mo to correct
any misapprehensOn as TO the purpose and
effect of the directors circular. As early as
Aug. "a 1876, tho department informed an
inquirer that the trade dollar had only a
bullion value, and this information has been
reported scores of times and published by
the press throughout the country, To avoid
De labor Of preparing manuscript letters, tho
Eroctors embodied the information in cir
aFlar, adding thereto tables for the computa-
don of such value There was no new de-
cison involved in the circular, though pos
sbly its publication may have hastened the
depreciation of the coins to their true value,
an event which was inevitable, aud could
not have been much longer delayed.
Pretty Little Romance,
Three weeks ago a neat pretty, modest