Saturday, June 1, 2013

The History of Trade Dollars in late 1800 and the Birth of British Trade Dollars

Trading in the Late 1800 to Early 1900

The silver British Dollar (commonly called the trade dollar) was born out of commercial necessity. It was issued at a time when the burgeoning trade in the East needed a medium of payment.

At the end of the 19th centuries,  an over-production of silver caused an upset in the goldsilver ratio, an extremely serious situation because many countries in the East used silver to back their currencies. As the price of silver plummeted the shortage of minted dollars became worse. Moreover, it became evident that trade was being dislocated as a result.

Silver price drop in between 1880s to 1910s affected trading

By the time the British dollar made its appearance there were already several other "trade dollars" on the market. The most common of them was the Mexican silver dollar-the famous eight reale,0.900 fine silver coin which was minted as early as 1824. This was followed by the United States trade dollar of 420 grains of 0.900 fine silver minted between 1873 and 1883, the Japanese trade dollar of similar weight and fineness minted between 1875 and 1877, and the French "Piastre de Commerce" which came in two weights, i.e. 27.215 grams (minted between 1885 and 1895) and 27 grams (minted between 1895 and 1928).

The Expansion of British Empire

By the middle of the nineteenth century the British presence in the East was being keenly felt. The Straits Settlements, established to link the now-defunct British East India Company's outposts of Penang, Malacca and Singapore, were beginning to flourish as important centres of trade in the Malay Archipelago. 

In 1842, with the signing of the Treaty of Nanking, China, having lost the Opium War, ceded the "barren" island of Hong Kong to the British in perpetuity and opened up five coastal cities (subsequently called the "Treaty Ports") to foreign trade. In 1859, the Suez Canal was opened, thereby shortening the sea between Europe and Asia by several months. In 1869, Japan was launched in to the golden age of the Meiji period which saw the lifting of restrictions on foreign trade.

It is therefore spawned the problem of finding a suitable currency for the heightened commercial activities. It began to occupy the urgent attention of local authorities who were urged on by merchants-particularly those in the Straits Settlements and Hong Kong- who began sending petition after petition for the introduction of an acceptable coin that would circulate easily in the silver-using countries of the East.It the end, to overcome the real threat of a currency famine, the British government, on the suggestion of the Colonial Currency Committee, approved the minting of a special British dollar for use in the Eastern trade.

The British Trade Dollar

In concept and purpose the British dollar-which came in only one denomination-was exactly the same as the Portcullis money of the early 1600s and was even issued by the same authority, i.e. the Royal Prerogative of the English sovereign.  

The coins was grain-edged, had a diameter of 39 cm and was struck in 26.95 grams (416 grains) of 0.900 fine silver. The dies were prepared by London Royal Mint engraver G W De Saulles. Three mints participated in the minting of the coins - the Indian Government Mints at Bombay and Calcutta as well as the Royal Mint in London.

But unlike the coinage of the realm, the dollar was not given a fixed sterling value; its value fluctuated according to the prices of silver at any given date.

The British dollar was declared legal tender on February 2, 1895 by an Order of Council in the Straits Settlements, Hong Kong and Labuan (off the north-west coast of British North Borneo). Although it was minted till 1935, the British dollar was quite quickly demonetised, fist in the Straits Settlements in 1904 and then in Labuan in 1905. But it continued to remain as legal tender in Hong Kong until 1937, at the outbreak of the second Sino-Japanese War of 1937-45.

After that it lost its legal circulation status and was merchandised. Anyway, the coins struck in 1934 and 1935 were generally not released for circulation.

Original Source : Coin Digest.Ng L.K. Ewe.
Modified with approval from Mr Dickson at

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