Trade Dollar (United States coin)

Trade dollar

United States
Mass	27.2 g (420 gr)
Diameter	38.1 mm (1.5 in)
Edge	Reeded
Composition	90% silver 10% copper
Years of minting	1873–1885
Obverse
Design	Left-facing seated Liberty, who extends her hand, bearing an olive branch, over the sea.
Designer	William Barber
Design date	1873
Reverse
Design	Bald eagle
Designer	William Barber
Design date	1873

The United States trade dollar was a dollar coin minted by the United States Mint to compete with other large silver trade coins that were already popular in East Asia. The idea first came about in the 1860s, when the price of silver began to decline due to increased mining efforts in the western United States. A bill providing in part for the issuance of the trade dollar was eventually put before Congress, where it was approved and later signed into law as the Coinage Act of 1873. The act made trade dollars legal tender up to five dollars. A number of designs were considered for the trade dollar, and an obverse and reverse created by William Barber were selected.

The coins were first struck in 1873, and most of the production was sent to China. Eventually, bullion producers began converting large amounts of silver into trade dollars, causing the coins to make their way into American commercial channels. This caused frustration among those to whom they were given in payment, as the coins were largely maligned and traded for less than one dollar each. In response to their wide distribution in American commerce, the coins were officially demonetized in 1876, but continued to circulate. Production of business strikes ended in 1878, though the mintage of proof coins officially continued until 1883. The trade dollar was re-monetized when the Coinage Act of 1965 was signed into law.

Following the California gold rush that began in 1849 and the Australian gold rush that began in 1851, a larger amount of gold was put into commerce than could be easily absorbed by the normal channels. This resulted in a decrease in the value of gold and an increase in the relative value of silver. As a result, silver coins rapidly disappeared from circulation due either to hoarding or melting. In response, Congress authorized the Mint to reduce the quantity of silver in all denominations except the three-cent piece and silver dollar. Beginning in the 1860s, silver production rose and the price decreased. During this time, silver coins largely disappeared from circulation and were replaced by paper and copper currency.

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