The Valley Virginian. [volume] (Staunton, Va.) 1865-1895, 1883-07-12

The following letter, written by John Sher-
man in 1878, when Secretary of the Treasury,
answers many inquiries now being received at
the Treasury Department, regarding the history
value and standing of the rejected trade dollar:
TREASURY DEPARTMENT,
OFFICE OF THE SECRETARY
WASHINGTON, ID. c., Sept. 3, 1878.
SIR-L hasten to fulfill the promise made you.
that upon my return to the Department would
write you fully concerning the issue of the trade
dollar and the present depreciation in its value.
The coinage of this dollar was authorized by the
Coinage Act of February r. 1873, i'll words as
follows:
"That any owner of silver bullion may deposit
the same at any mint, to be formed into bars or
into dollars OF the weight of four hundred and
twenty grains troy. designated in this act as
trade dollars and the charges for
converting standard silver into trade dollars, for
melting and refining, when bullion is below
standard, for toughenng when metals are con-
tanned in it which render it unfit for coinage for
copper used for alloy when the bullion is above
standard for separating the gold, when these
metals exist together in the bullion, and for the
preparation of bars, shall be fixed from time to
time by the Director of the Mint, with the con-
cuTrence of the Secretary of the Treasury, as
to equal, but not to exceed, in their Judgment,
the actual average cost to each mint and assay
office of the material, labor, wastage and use Of
mentioned
AS it's name indicates, the purpose of this coin
was for trade, not for circulation, though by clas-
styling with other silver COINS the law made it a
legal tender to the amount of five dollars in any
one payment. At the time OF the passage of the
act the actual value of this dollar, Including the
charge of one and one-fourth cents for coinage,
was little more than one dollar and four cents
in gold Under such circumstances there could
be no object for the owner to put the coins into
circulation, and consequently they were export
ed mostly to China, where from lack of q circu-
lating medium, these pieces, convenient in size
and bearing the guarantee OF great Govern
ment as to their weight and fineness, obtained
an extensive circulation and created a market
for the silver of the Pacific States, as intended
by the act. After a few months, however, an
unforeseen depreciation in the value of silver
bullion occurred, and in the early part of 1876
this depreciation reached such point that one
dollar would purchase more than the necessary
amount of silver for u trade dollar and pay for
its coinage. Under such conditions dealers in
bullion found aprofit in putting trade dollars in
circulation at par in the Pacific States, when the
currency was upon gold basis, but the coin be-
inga legal tender for only IS, its circulation was
necessarily limited in amount well as re-
stricted in locality. The people of the Pacific
States, however, objected 10 it's use at all for cir
culatiOn and the attention of Congress having
been called to the matter, on the Sth OF May,
1876 Hon. Samuel j. Randall, of Pennsylvania
introduced into the House Il bill the third sec
ton OF which repealed the legal tender quality
of these coins. On the 10th of June following
Hon. S. S. Cox, of New York, reported the meas
lection raised, and it became u law July %
1876 without medication or an opposing Voice
or vote in either house, and is us follows:
THAT the trade dollar shall not hereafter be a
legal tender, and the Secretary of the Treasury
is hereby authorized to limit rom time to time.
the coinage thereof to such IN amount as he may
deem sufficient to meet the export demand for
the same.' e {0.lt-
UP to that time excepting few days. and for
several months thereafter, The trade dollsr cost
more than paper currency dollar and conse-
quently none OF the coins got into circulation in
other than the Pacific States. Owing to the ap-
probation of the paper currency, however, in
The fall of 1877, the trade dollar became of less
value than the paper dollar, and in December of
that year, Il large number OF them were 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
diScontinuance OF their coinage at the Mint at
Philadelphia, and four days later at the other
m1ntS. Meanwhile the Department, in reply to
numerous inquiries, had uniformly stated that
The trade dollar possessed only q commercial
value depending upon the price of silver bull
lion. 1t will be seen that the coins were put
into circulation months after the passage of The
act taking from them their legal-tender charac-
ter, 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 owner of
the bullion reimbursed the Government, and
TINS ended the connection OF the Government
with the transaction. AT no time and on no ac-
count have they ever been received or paid out
by the Treasury, and it is u cause of regret that
SO many of our people should have accented
them at their face value, thus enabling their
owners to put them into circulation at q con-
siderable profit.
AS early as August q, 1876 the Department in
formed an inquirer that the trade dollar had
only bullion value, and this Information has
been repeated score of times and published by
the press throughout the country. To avoid the
TABOR OF preparing manuscript letters, the Di-
rector of the Mint embodied the information in
a circular, adding thereto tables for the compu-
tatlon OF such value. There was no new decis-
ION involved in the circular, though possibly it's
puDllcatlon may have fastened the depreciation
OF the coins to their true value, an event which
was inevitable and could not have been much
longer delayed, Very respectfully.
JOHN SHERMAN, Secretary.