Last week I mentioned some odd and curious coin facts — such as
that “nickels,” that is, copper-nickel 5-cent pieces, should really be
called “coppers,” as they are 75 percent copper and only 25 percent nickel.
I also related Louis E. Eliasberg Sr.’s anecdote that in 1932, for
a citizen to own double eagles was legal, bottles of whisky illegal.
In 1934, the situations were reversed — turn those gold $20 double
eagles in to Uncle Sam or face prosecution, but buy all the whisky you
want! Now, for this week, can you follow this?
The time is spring 1873. John Doe, who lives in San Francisco, has
two recently minted silver coins — a Seated Liberty dollar and a Trade
dollar. He desires to have some small change and goes to a local bank
to ask for dimes. In short order, a cashier exchanges the two dollars
and gives John 20 dimes. John spends them for newspapers, beer and
He takes another Seated Liberty dollar and Trade dollar from his
pocket and mails them to Jane Doe, his niece in New York City. Jane
takes them to a bank and asks for some dimes. “I am so sorry. We don’t
have any dimes at all, and haven’t since the spring of 1862,” the
Jane puts the two coins away. In 1879, she tries again. This time
the teller replies: “I can give you 10 dimes for the silver dollar. We
have several bags of dimes. I’ve never seen so many! However, I am
sorry to tell you that the Trade dollar is not money anymore, and I am
not allowed to take it.”
Now the rest of the story. In 1873, American silver coins were in
circulation in California and federal paper money was not wanted. It
was a “hard money” economy. Legal tender notes were around, but sold
at a discount in terms of gold and silver coins. Dimes were aplenty.
In 1873, in New York, no silver and gold coins were in
circulation. They had been hoarded since early 1862, during the Civil
War, when Uncle Sam flooded the country with legal tender notes, which
were not redeemable in coin. After the war ended, the hoarding
continued, as the economy remained uncertain.
It was not until April 1876 that silver coins and legal tender
notes achieved par and could be freely interchanged. Shortly
afterward, on July 22, 1876, the government demonetized Trade dollars,
rendering them useless in commerce. They were only worth melt value, a
Fast forward to the Coinage Act of 1965, which stated that any and
all officially minted coins were legal tender. The Trade dollar became
a real coin once again!
Q. David Bowers is chairman emeritus of Stack’s Bowers Galleries
and numismatic director of Whitman Publishing LLC. He can be reached
at his private e-mail, firstname.lastname@example.org,
or at Q. David Bowers, LLC, Box 1804, Wolfeboro, NH 03894.