I've read in several books that: "Even though Trade dollars were heavier than the regular US silver dollar, it was good only for purchases up to $5 in the US. After that, the Trade dollar was worth only its bullion value, which was less than its face value." Now I can follow that - 1) Trade dollars heavier than Morgans; 2) limited to using them 5 at a time ($5) in the US; and 3) trying to spend more than $5 worth of Trade dollars in the US resulted in them being valued at their lesser bullion value. The next sentence in the books I am reading confuses me. "As a result, many of the Trade dollars found their way back to the United States, where they could be spent at a profit." WTF? Why would they make their way back to the US where they would be subject to the three disadvantageous rules above? Thanks in advance for any clarification. :thumb:
They were worth less than $1 in silver when made. As a result, they were sold overseas for bullion value, then transported back and passed for (the higher) face value. Make sense?
When they were first made back in 1873 - 74 they were worth their face value and they were accepted as such overseas. But as the value of the silver fell the Chinese would no longer accept them as dollars but only for their bullion value. Once that happened it became advantageous to ship the trade dollars back from China where they were worth bullion (maybe 85 cents) to the US where they were legal tender for a dollar.
