How Do You Like Your Trade Dollar?

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Federal officials faced a dilemma in the years after the Civil War. The Comstock Lode and other Western mines were producing large quantities of silver, but the government could use only limited amounts of it in coinage. This seems puzzling in retrospect, for silver coins were few and far between in circulation (a lingering legacy of wartime hoarding), and Americans presumably would have welcomed major infusions of silver coins. But Mint officials feared that new silver coins would be subject to hoarding as well, since the marketplace was awash with paper money, including fractional currency born of wartime need. People would have been only too happy to exchange these notes, which brought less than full face value, for precious-metal coinage.

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The Trade dollar's biggest problems occurred not in China but at home. In a last-minute deal, Congress had made the coin a legal tender for domestic payments up to five dollars. In 1876, millions were dumped into circulation in the United States when silver prices plummeted, making them worth substantially more as money than as metal.

Congress quickly revoked their legal-tender status (the only time this has been done with any U.S. coin), but the seeds of serious trouble had been sown. In the late 1870s, employers bought up huge numbers of the coins at slightly more than bullion value (80 to 83 cents apiece) and then put them in pay envelopes at face value. Merchants and banks accepted them only at bullion value or rejected them altogether, so the workers effectively lost one-sixth to one-fifth of their pay at a time when that pay often amounted to less than $10 a week.

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Spurned abroad and despised by many at home, the Trade dollar soon faded into oblivion. After 1878, production was suspended except for proofs-and even those dwindled to just ten in 1884 and five in 1885.

Like many other "fantasy" coins before them, the 1884 and 1885 pieces were clandestinely struck for Mint crony William Idler and were unknown to the numismatic community until six pieces from Idler's estate were sold by dealer John Haseltine in 1908. Notwithstanding their questionable origin, these two dates are viewed as great rarities today.