This discussion is courtesy of PCGS Coin Facts.
The following narrative is from "Silver Dollars & Trade Dollars of the United States: A Complete Encyclopedia" ( Wolfeboro, NH: Bowers and Merena Galleries, Inc. 1993):
Availability of Proofs: Today, Proofs are readily availabe (within the context of the trade dollar series). However, nice quality Proofs seem to trade less frequently than the population data suggest. In 1992 a leading dealer sought to put together a date set of 1873 to 1883 Proof trade dollars, and found that the 1876 was the last coin acquired, and that 1873 wwas also difficult to track down. The rarity of 1873 is to be expected, but the elusive nature of the 1876 came as a surprise.
Most Proof are of the 60 to 63 level. Many of the 1876 proof coins were handled carelessly. So this coin offers a fairly unique opportunity.
The U.S. Trade Dollar: A Brief History
Origins (1873)
The U.S. Trade Dollar was created by the Coinage Act of 1873, a period sometimes referred to as the “Crime of ’73” because it also ended the standard silver dollar. Its primary purpose was not domestic circulation but international trade, particularly with China. At the time, silver was abundant in the western U.S., and American merchants needed a coin that could compete with the Mexican peso, the dominant trade coin in Asia.
Design and Specifications
The coin contained 420 grains of silver (slightly more than the standard silver dollar) to ensure acceptance overseas. The obverse depicted Liberty seated with an olive branch, symbolizing peace and commerce, while the reverse featured a bald eagle with arrows and an olive branch.
Circulation Abroad (1870s)
The coins were exported in large quantities to China and other Asian markets. Initially, they were accepted and often preferred due to their higher silver content. However, over time, the Chinese merchants became skeptical because of fluctuating silver values and counterfeits, leading to mixed acceptance.
Domestic Problems
Although intended for export, Trade Dollars entered U.S. circulation. Employers sometimes paid workers with them, but because silver prices fell in the 1870s, the bullion value dropped below face value. This caused resentment since workers were effectively being underpaid. The coin’s status as legal tender up to $5 compounded the problem, as many Americans saw them as unwanted, “discount” money.
Demonetization (1876–1887)
Congress revoked the Trade Dollar’s legal tender status in 1876, essentially relegating it to a bullion piece. Production for circulation stopped in 1878, though proof issues for collectors continued until 1885. In 1887, Congress authorized redemption of outstanding Trade Dollars at face value, but by then many had already been exported or melted.
Legacy
The U.S. Trade Dollar remains a fascinating reminder of America’s attempt to compete in the global silver trade. While unsuccessful domestically, it marked an early effort by the U.S. Mint to design coinage specifically for foreign commerce. Collectors today prize them, especially rarer dates like the 1884 and 1885 proofs, which are among the most valuable U.S. coins.
