The
Rise and Fall of the Trade Dollar
Collector USA - By R.W. Julian
America's
first bullion coin, the Trade Dollar, inherited this title almost by accident.
Intended as a way of sending our surplus silver overseas, within two years it
had become a domestic bullion coin, much to the annoyance of ordinary citizens.
The political uproar that arose was, in the long run, to destroy it; out of the
ashes of defeat grew the now-famous Morgan dollar. To tell the story of this
interesting coin we must travel back in time. . .
In the
early days of the American Republic there was no discussion of bullion coins
because there was a relative shortage of silver and gold. In the late 1840s,
with the great discoveries of gold in California, the monetary system was
disrupted and silver driven from circulation. This was remedied in February
1853 when silver coins were reduced in weight. There was a joker in the 1853
law because the weight of the silver dollar (412.5 grains, .900 fine) was not
changed and bullion owners could still bring silver to the mints in exchange
for this coin.
The government made strenuous efforts to
see to it that these new coins were readily accepted
in the Far East.
Virtually no one did so because
the dollar did not circulate and there was no ready supply of native silver in
the 1850s. However, mining underwent a huge expansion during the Civil War as
silver and gold were urgently needed to pay for war materials purchased abroad;
from less than $50,000 worth of silver produced in 1849 (primarily as a
by-product of gold mining) the value climbed to $10,000,000 by 1864.
