Trade dollar redemption. 0

[RWB]

Any thoughts?

[RG104 E-235 Vol 302 1898 Misc.]

[Henri Charriere]

Thoughts? Plenty... in no particular order of importance:

While there is a mother lode of information apparently unleashed by a simple written query from an attorney in Illinois, it is not clear why, or on whose behalf the information requested was sought.

[Bit of trivia: the Mint Director, exercising his franking privilege, replied via a franked letter -- solely on the strength of his signature, a practice that dated back to English common law that was subsequently adopted by the American Continental Congress in 1775 and codified in law by the nation's first Congress some 14 years later.]

Based on the information provided in this official communication [typed on the customary "white" letterhead, in duplicate, using standard blue carbon paper and signed with a quill pen dipped in sepia-colored ink] the reader is given a fairly concise, precise accounting of the number of Trade dollars minted, ultimately redeemed [some 11 years after they were "discontinued"] and an exact accounting of what remained at large, though it appears the present whereabouts of the vast majority likely remains in the Far East -- minus certifications and those who follow market trends. Redemptions represented less than a quarter of all outstanding Trade dollars, as of 1898.

Why the sizeable disparity in silver bullion prices amounting to a 25% differential between the various Mints and New York brokers, I leave to others to explain.

[bstrauss3]

Continues to show the fallacy of trying to maintain a fixed gold:silver ratio and argue with the market.

[GoldFinger1969]

Trade dollars were just Silver Dollars intended to be used overseas, right ?

[zadok]

On 8/24/2023 at 10:17 AM, GoldFinger1969 said:

Trade dollars were just Silver Dollars intended to be used overseas, right ?

...did u read my PM to u yet??....

[RWB]

On 8/23/2023 at 10:30 PM, Henri Charriere said:

Based on the information provided in this official communication [typed on the customary "white" letterhead, in duplicate, using standard blue carbon paper and signed with a quill pen dipped in sepia-colored ink] the reader is given a fairly concise, precise accountifg of the number of Trade dollars minted,

This is an image of a presscopy, not the original letter, hence the fuzzy blue color text and gray signature. In 1898 people wrote with pencils or steel-tipped ink pens, not goose quills. A group of these very thin pages bound together was called a letterbook or letterpress copybook. Here's a brief explanation from the Society of American Archivists:

[Yates 1989, p. 26–28.] The first mechanical method of copying to gain widespread use in American business was press copying, first patented by James Watt in 1780 but not widely adopted in business until much later. As the technology came into common use, a screw-powered letter press was used in conjunction with a press book, a bound volume of blank, tissue paper pages. A letter freshly written in special copying ink was placed on a dampened page while the rest of the pages were protected by oilcloths. The book was then closed and the mechanical press screwed down tightly. The pressure and moisture caused an impression of the letter to be retained on the underside of the tissue sheet. This impression could then be read through the top of the thin paper.

These letter presses were used by some individuals and businessmen in the first half of the nineteenth century, but they only came into general use in the second half of the century.

A letter press reduced the labor cost, both by decreasing copying time and by allowing an office boy to do the copying once performed by a more expensive clerk. As the same time, it eliminated the danger of miscopying. Copies were now facsimiles of the letter sent, down to the signature.

Most letterpress copybooks used a chemical process similar to blueprinting. Copy quality varied from barely readable to very good (as in the above example). Much depended on use of special copying ink and how the thin paper was dampened.

Edited August 24, 2023 by RWB

[Sandon]

On 8/24/2023 at 10:17 AM, GoldFinger1969 said:

Trade dollars were just Silver Dollars intended to be used overseas, right ?

   There is more to the explanation than this. Two reasons are usually advanced for the issuance of Trade dollars.

    First, they were intended to facilitate trade in the Orient, especially with China. The Chinese were used to receiving payment in Mexican eight real pieces, sometimes called “Mexican dollars”, which weighed approximately 417 grains and were composed of .903 fine silver, containing 0.7859 troy ounces of pure silver. U.S. silver dollars weighed 412.5 grains, .900 fine, containing 0.77344 troy ounces of pure silver. While some quantities of Liberty Seated dollars had been exported to China, they traded at a discount. The Trade dollar, as proclaimed on its reverse, weighs “420 grains, .900 fine”, containing 0.7874 troy ounces of pure silver. It was hoped that at this weight it could compete with the slightly lighter Mexican coins. 

    Second, and perhaps more importantly, they were intended to reduce the glut of silver resulting from the discovery of large amounts of silver in the United States, such as the Comstock lode. Silver mining interests supported the 1873 legislation authorizing Trade dollars.

   As the Mint Director's 1898 letter indicates, from 1873 to 1878, nearly 36 million trade dollars were minted for circulation. They reportedly received some acceptance in southern China but less elsewhere due to the unfamiliar design. While most were exported, others circulated domestically, as they were initially legal tender up to five dollars. The world price of silver continued to decline, so that Trade dollars became worth less than their face value in silver notwithstanding their heavier weight. Profiteers deposited silver at the mint for exchange into Trade dollars of equal weight, which they then spent at face value. To end this practice Congress in July 1876 revoked the legal tender status of Trade dollars. They continued to circulate at values less than a dollar that fluctuated with the price of silver. Some unscrupulous persons continued to pass them off at face value.  Production of Trade dollars for circulation ceased following the passage of the Bland Allison Act that authorized the production of Morgan dollars in 1878, although the mint continued to produce and sell proof examples through 1883 (and unofficially in 1884 and 1885).

   The redemption of Trade dollars at face value, which is apparently referred to in the 1898 letter, was only allowed for a period of six months under the 1887 law that also repealed the Treasury's authority to issue Trade dollars. Thereafter, they were effectively demonetized and only worth their then low silver value. Reportedly, many 1891 and 1891-O Morgan dollars were coined from silver obtained from the redeemed Trade dollars, and apparently portions of the relatively high mintages of Liberty Seated dimes and quarters of that year as well.

   I derived this information from a presentation I made to a coin club a few years ago. I obtained it primarily from the following sources: 

   Bowers, Q. David, Silver Dollars and Trade Dollars of the United States: A Complete Encyclopedia (Bowers & Merena 1993), Volume One at pp. 869-1086.

   Breen Walter, Walter Breen's Complete Encyclopedia of U.S. and Colonial Coins (Doubleday 1988), pp. 466-70.

[zadok]

On 8/24/2023 at 1:16 PM, Sandon said:

   There is more to the explanation than this. Two reasons are usually advanced for the issuance of Trade dollars.

    First, they were intended to facilitate trade in the Orient, especially with China. The Chinese were used to receiving payment in Mexican eight real pieces, sometimes called “Mexican dollars”, which weighed approximately 417 grains and were composed of .903 fine silver, containing 0.7859 troy ounces of pure silver. U.S. silver dollars weighed 412.5 grains, .900 fine, containing 0.77344 troy ounces of pure silver. While some quantities of Liberty Seated dollars had been exported to China, they traded at a discount. The Trade dollar, as proclaimed on its reverse, weighs “420 grains, .900 fine”, containing 0.7874 troy ounces of pure silver. It was hoped that at this weight it could compete with the slightly lighter Mexican coins. 

    Second, and perhaps more importantly, they were intended to reduce the glut of silver resulting from the discovery of large amounts of silver in the United States, such as the Comstock lode. Silver mining interests supported the 1873 legislation authorizing Trade dollars.

   As the Mint Director's 1898 letter indicates, from 1873 to 1878, nearly 36 million trade dollars were minted for circulation. They reportedly received some acceptance in southern China but less elsewhere due to the unfamiliar design. While most were exported, others circulated domestically, as they were initially legal tender up to five dollars. The world price of silver continued to decline, so that Trade dollars became worth less than their face value in silver notwithstanding their heavier weight. Profiteers deposited silver at the mint for exchange into Trade dollars of equal weight, which they then spent at face value. To end this practice Congress in July 1876 revoked the legal tender status of Trade dollars. They continued to circulate at values less than a dollar that fluctuated with the price of silver. Some unscrupulous persons continued to pass them off at face value.  Production of Trade dollars for circulation ceased following the passage of the Bland Allison Act that authorized the production of Morgan dollars in 1878, although the mint continued to produce and sell proof examples through 1883 (and unofficially in 1884 and 1885).

   The redemption of Trade dollars at face value, which is apparently referred to in the 1898 letter, was only allowed for a period of six months under the 1887 law that also repealed the Treasury's authority to issue Trade dollars. Thereafter, they were effectively demonetized and only worth their then low silver value. Reportedly, many 1891 and 1891-O Morgan dollars were coined from silver obtained from the redeemed Trade dollars, and apparently portions of the relatively high mintages of Liberty Seated dimes and quarters of that year as well.

   I derived this information from a presentation I made to a coin club a few years ago. I obtained it primarily from the following sources: 

   Bowers, Q. David, Silver Dollars and Trade Dollars of the United States: A Complete Encyclopedia (Bowers & Merena 1993), Volume One at pp. 869-1086.

   Breen Walter, Walter Breen's Complete Encyclopedia of U.S. and Colonial Coins (Doubleday 1988), pp. 466-70.

...excellent synopsis, wonder how the Mint Director would have answered a letter inquiring whether the 1884 n 1885 trade dollar were authorized mintages n if they were legal to own?, i suppose most collectors werent even aware of them being minted unless they were reflected in the monthly or CY mintage reports n if so probably reflected as just dollars even though their silver contents differed?...i never investigated, but maybe u will know, were the trade dollars after 1878 of trade dollar silver fineness or were they of morgan dollar fineness? if diff were two reports required to account for the discrepancy in silver usage?...new bucket of numismatic worms, u should write a book on "US Mint What Ifs and What Really Happened" id buy a copy....

[Henri Charriere]

Great thread with plenty of traction! But am I to believe the interest in this history by our membership is so scant? Petroski, an engineer, wrote an entire book on the history of the pencil. The development of a fountain pen -- "invented" and patented here just prior to the date of the Mint Director's letter -- took place over a span of time on two continents and solved the problem posed by continual, repetitive inkwell- dipping with the introduction of instruments containing compact reservoirs and the use of interchangeable nibs. I recall the production of the Gutenberg Bible in the 1400's but had forgotten about the earliest bookbinding techniques. Man has come a long way from scrolls, papyri and cuneiform on clay tablets.

I have always prided myself in being able to distinguish the subtle differences in taste amongst carbonated soda drinks in a blind taste-test, but wonder if anyone would be able to distinguish the minute differences in weight in a blind weight-test of silver U.S., "Mexican," and Trade dollars.

Very informative piece!

 

[RWB]

On 8/26/2023 at 7:06 AM, Henri Charriere said:

but wonder if anyone would be able to distinguish the minute differences in weight in a blind weight-test of silver U.S., "Mexican," and Trade dollars.

Anecdotally, many US Mint adjusters could detect over and under weight planchets without use of the balances provided for their use. Check the tolerances for gold and large silver coins.

[Conder101]

On 8/24/2023 at 1:16 PM, Sandon said:

 The redemption of Trade dollars at face value, which is apparently referred to in the 1898 letter, was only allowed for a period of six months under the 1887 law that also repealed the Treasury's authority to issue Trade dollars.

And if I remember correctly only unmutilated coins ( meaning no chopmarks) could be redeemed.

[RWB]

On 9/4/2023 at 6:26 AM, Conder101 said:

And if I remember correctly only unmutilated coins ( meaning no chopmarks) could be redeemed.

Correct. "Chop marks" are simply mutilation, and the Treasury did did not exchange mutilated coins. They paid only bullion value for them.

[Mike Meenderink]

Wow you guys really love to suck up each other...mmm the drivel here is outstanding. Tell me who is the smartest? Sandon? RWB? Zadok?? Man its really hard to tell  ..I pick Henri since he seems not to cut and paste his answers from published material. bahahahaha

[Henri Charriere]

@Mike Meenderink  :

Muchos gracias, senor!

Bwahahahaha!