The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1883-07-04
A Coin That at One Time Was Above Par,
but Which at Present Is Finan-
cial Outcast.
Shall Lottery Companies Be Permit
ted to Use the Mails?
Hearing in the Case of the Louisiana Com
pany Set for Thursday Gossip About
the Hill Investigation,
THE TRADE DOLLAR
History of the Coin, and How 1t Came Into
General Circulation.

History of the Coin, and How 1t Came Into
General Circulation.
Special to the Indianapolis Journal.
WASHINGTON, July 3.-In view of the pres
ent agitation in reference to the trade dol
lar, the following history of the coin will be
of general interest. This information was
furnished to the Journal by the then acting
Director of the Mint (Mr. R. E. Preston) and
was published in this paper Aug. 3d. 1878.
The statement is as follows:
The trade dollar was authorized to be
coined by the act of Feb. ~, 1878, and was
not intended for circulation in the United
States, but for export to China. That en-
pire possesses no mint for the coinage of gold
and silver, and depends upon foreign coins
for its circulation. 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 there
fore was made trifie more valuable, about
two mills per piece, thus not only afording
market for the surplus silver of the mines
on the Pacific coast, but furnishing merchants
and importers from China with silver in a
convenient form for payment for commodi-
ties, instead of their being obliged to pur-
chase Mexican dollars for that purpose.
At the time of the passage of the act au-
thorizing the coinage of the trade dollar, sill
SO 1915 pence per ounce, British standard,
at which rate the bullion or intrinsic value
OF trade dollar was 10347 in gold. Fluc-
tuations 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
102. 03 in gold. This fact was alone sufficient
to keep these coins effectually out of circula-
ton, and insured their use for the purpose
for which they were intended. The act
above mentioned made them, however, a
legal tender, in sums not exceeding $5 in any
one payment, which limited their use in cir
culation after the fall in the price of silver
reduced their bullion value below their NOM
inal value.
As the price of silver continued to fall
rapidly, and trade dollars were being circu-
lated to a considerable extent in the Pacific
States, Congress, by 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 rec
ord, and the bullion value of a trade dol
lar was only 8007 cents in gold; it afterwards
rose rapidly, and in December of the same
year the bullion value OF that piece was 101
cents gold. Since that date the fluctuations
in the value of silver bullion, and conse-
quently OF the trade dollar, have not been so
great, and have been comprised within range
of II cents to the dollar.
Under the coinage act which authorized
coined for depositors of silver bullion at the
mint, and charge imposed for coinage at
a rate not to exceed the actual cost to the
government 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 exchang-
ed for other money. u 1t may
be readily seen that whenever the price of
silver fell to a point at which the bullion
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 profit, by spectators, 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 for returns in these coins diverting
them from their true object and placing them
in circulation, 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
the act repeating the legal tender of the
trade dollar IJ cannot, therefore, be right
fully charged that the government has
perpetrated a swindle on the people in put
ting the trade dollar out as dollar and
then marking it down to ninety cents' for
the fact is that the government has endeav-
ored to keep the trade dollar i'll its lawful
and proper channel. and that from ignorance
OF the law relative to this coin, parties have
taken them in ordinary business transac-
tions, when they could have been lawfully