Trade dollar

Trade dollars are silver coins minted as trade coins by various countries to facilitate trade with China and the Orient. They all approximated in weight and fineness to the Spanish dollar, which had set the standard for a de facto common currency for trade in the Far East.

The existence of trade dollars came about because of the popularity of the silver Spanish dollar in China and East Asia. Following the establishment of the Spanish Philippines, Intramuros became an entrepôt for Chinese goods in one direction and silver, from across the Pacific to the Spanish held silver mines of Mexico, in the other. This so-called "Manila Galleons" trade route, led from the 16th Century onwards to the wide circulation of "pieces of eight" in East Asia.

The high regard in which these coins came to be held, led to the minting of the silver Chinese yuan, a coin designed to resemble the Spanish one. These Chinese "dragon dollars" not only circulated in China, but together with original coins of Spanish-Mexican origin became the preferred currency of trade between China and its neighbours. Defeated in the First Opium War China was forced to open its ports to foreign trade, and in the late half of the 19th Century Western nations trading with China found it cheaper and more expedient to mint their own coins, from their own supplies of silver, than to continue to use coins from Mexican sources. These so-called trade dollars would approximate in specification, weight 7 mace and 2 candareens (approx. 27.2 grams) and fineness .900 (90%), the Spanish-Mexican coins so long trusted and valued in China.

To control the money supply in French Indochina in 1885, the French introduced a new silver Piastre de commerce and associated subsidiary coinage throughout the entire Indo-Chinese colonies in order to increase monetary stability. The piastre was initially equivalent to the Mexican peso. The piastre was therefore a direct lineal descendent of the Spanish pieces of eight that had been brought to the Orient from Mexico on the Manila Galleons. It was initially on a silver standard of 1 piastre = 24.4935 grams pure silver. This was reduced to 24.3 grams in 1895.

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