What Are Trade Dollars?

What Are Trade Dollars?

The trade dollar is a silver coin created by the United States Mint in 1873 to be used for trade in the Far East. Because they were largely used in China, the coins were stamped with Chinese characters on the back called "chopmarks."

The trade dollar was minted at a time when the price of silver was declining in the U.S. as a result of the increase of silver mining in the West.

The trade dollar was made to compete with the East Asia coins. A bill before Congress was signed into law as the Coinage Act of 1873. The trade dollars were only legal up to the amount of $5.

The design of the trade dollar was created specifically to appeal to the Far East market. It depicts Lady Liberty seated on a bale of cotton facing left, which represents the Orient. In her right hand is an olive branch, which is the symbol for peace.

When the mint began flooding the market with more trade dollars, eventually they became unpopular as their value decreased to less than $1. The production of trade dollars ended in 1878; however the mint created proof coins, or coins made for historical purposes and for collectors.