The Valley Virginian. [volume] (Staunton, Va.) 1865-1895, 1883-07-05
The Trade Dollar.

past week by the depreciation OF trade dol
! lars from par to IS cents and lower The
panic commenced in New DIRK last Satur-
| day. and was thought to have been started
! by spectators, with Il view to reaping a
| temporary profit. 1t soon got beyond the
control of the money changers, and spread
rapidly all over the Union. The banks of
Staunton have posted notices declining to
receive the ''boycottedo coin at more than
rs cents, and the merchants are refusing,
also, to accept them except at heavy dis
count. We advise our readers to look out
for them in their transactions.
There is a popular impression that the
movement against the trade dollar is gotten
up for the purpose Of speculation, so that
the coins can be bought up at a discount
and profit turned by putting them out
again at par when the excitement is over.
Well Uniformed fnanciers, however, say that
the depreciation of the trade dollar was
bound to occur whenever more of them got
atloat than could be kept steadily in circu
lation. When they began to accumulate in
disposed of over the counter the only re-
cource was to reject them, as they are not
q legal tender and really worth only their
bullion value. The fact that the standard
silver dollar, with less silver in it than the
the trade dollar. is everywhere current
would not confuse the popular understand
ing of the matter if it were borne in mind
that the standard dollar owes it's position
to its legal-tender character. 1t is by law
made receivable for all public and private
dues, and whenever it accumulates in the
banks OF in the hands Of any holder in
troublesome quantities, it can be returned
to the government treasury Intrinsic
value has nothing to doWith its legal value,
and it would pass at par under such cir
cumst ances if it had no intrinsic value,
just rs the government keeps paper cur
rency Of no intrinsic value atioat by stand
ing ready to redeem it on presentation and
accepting it for all purposes just as if it
were so much gold. So far from the rejec
ton of the trade dollar being in the inter
est of spectators it breaks the market of
the spectators. The law allows owners of
silver bullion to have it minted into trade
dollars at a char ge designed simply to COW
Ell the cost of the process, so that it is evil
dent that some spectators have been MAX
ing money for years past in having sc cents
worth of silver put into u shape that could
be passed us dollars worth. Only the
lack of minting capacity has prevented a
deluge of trade dollars into the currency,
although the ostensible purpose for which
the act of February, 1878, authorizing the
trade dollar was passed was to obtain coin
for export uses solely. The little items
that have from time to time appeared of
the excessive demand in the San Francisco
mint for the coinage of trade dollars are
now very int eligible. 1t has been sug
gested the government should redeem the
trade dollars, and some people have gotten
the idea that the government could do this
without expense, and even profit, inasmuch
Us the intrinsic value of the trade dollar is
greater than that Of the standard dollar. =
But it must be borne in mind that the gov
eminent maintains the standard dollar at
par with gold, so that in effect the redemp-
ton of the trade dollar in silver dollars
| would be the giving of a dollar for sc cents
worth. The standard dollar which the
government would give in exchange for a
trade dollar might cost no more to coin
than the trade dollar, or not so much but
when that trade dollar should be presented
! in payment of any tax OF duty it would dis
charge the same amount of Indebtedness as
gold dollar would, while the trade dollar
would have only discharged Sc cents worth.
So i'll the transactions the government
would have lost IA cents. There were 35,-
969 800 trade dollars coined up to the last
of the fiscal year, and at present rates the
government could buy the bullion in them
in open market for less than 1871 900 ,000.-
The difference represents the governments
loss if the trade dollar should be redeemed
at par.