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<p>[QUOTE=&quot;The Eidolon, post: 7488366, member: 102103&quot;]That got me thinking about why trade dollars were issued by multiple countries in that time period.&nbsp; I think for all of the countries mentioned except Japan, it involved the switch from a silver or bimetallic standard to a gold standard.&nbsp; </p><p><br /></p><p>Under a gold standard, it is undesirable to have full-bodied silver coinage.&nbsp; If the gold/silver price ratio changes, the silver coinage can be driven out of circulation if its metal value exceeds face value.&nbsp; So token silver is issued worth a little less than face as metal.&nbsp; However, in countries still on a silver standard, such as China in the 1800s and early 1900s, merchants will be reluctant to accept silver coinage as worth more than their metal value.&nbsp; The regional standard was the Spanish/colonial 8 reales.</p><p><br /></p><p>To save the trouble of converting their coinage into Spanish dollars and taking a small loss on the currency conversion, many countries issued their own coinage of full-bodied silver specifically for trade with the Far East.</p><p><br /></p><p>Examples:</p><p><br /></p><p>UK (on a gold standard since 1821)</p><p>trade dollars issued from 1895-1935</p><p><br /></p><p>US (Gold Standard since 1873)</p><p>Trade dollars issued 1873-1885</p><p><br /></p><p>French Indochina Trade Piastre (French gold standard since 1870)</p><p>1885-1895 (27.215 g)</p><p>1895-1928 (27 g)</p><p>1931 (20 g)</p><p><br /></p><p>Japan: (gold standard 1897)</p><p>Trade Dollar Meiji 7-10 = 1874-1877</p><p><br /></p><p>Japan is the odd exception, as it was still on a silver standard when it issued its trade dollar coins in 1874-1877.&nbsp; Japan only switched to a gold standard in 1897, when victory in the Sino-Japanese war provided enough gold currency from indemnities to allow a smooth transition.&nbsp; Japan&#039;s reason was probably that the silver one yen was slightly lighter (26.96 g at .900 silver) than the prevailing Latin American dollar (27.07 g at .903 for Mexico at the time, for example).&nbsp; The one yen wouldn&#039;t have been accepted as a full-valued substitute, creating demand for a trade coin worth slightly more than the silver one yen.</p><p><br /></p><p>Japan, being an isolated economy on an island, has a long history of getting shafted when its domestic gold/silver price differed from the world price.&nbsp; This had happened during the late Tokugawa Era, draining gold from the country alarmingly, which would have been a very recent memory when the trade dollar was introduced.&nbsp; That may have provided additional impetus for the Japanese government to not want to be at a disadvantage on exchange rate issues.[/QUOTE]</p><p><br /></p>

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