The China Trade, which had opened up to American commerce in the last decade of the 18th Century, became especially active after the Civil War. The Mexican 8 Real silver coin was the preferred coin for international trade in China. This put American merchants at a disadvantage, as they had to purchase the Mexican coins at up to a 15 percent premium in order to facilitate transactions.

Congress was asked to mint special silver dollar coins of a higher grain weight to compete with the Mexican 8 Real. This Trade Dollar would weigh 420 grains, compared to the 412.5 grains of silver that was found in previous silver dollars. U.S. Mint Engraver, William Barber (father of future Mint Engraver Charles Barber), designed this new coin. The obverse shows a seated figure of Liberty facing left towards China. She wears a beaded coronet and holds a ribbon with “LIBERTY” in her left hand. An olive branch is extended in her right hand. Liberty sits on a bale of cotton with a sheaf of wheat behind her. There are 13 stars in the field above the figure. Above the date is: “IN GOD WE TRUST.” The reverse depicts an eagle (similar to the reverse of the 20 Cent coin designed by Barber 3 years later), holding three arrows in the right claw and an olive branch in the left. The border legend reads: “UNITED STATES OF AMERICA TRADE DOLLAR.” A ribbon above the eagle bears the legend: “E PLURIBUS UNUM.” Under the eagle is: “420 GRAINS 900 FINE.”

The new Trade Dollar was popular in southern China, but failed to gain acceptance in the north. Even though the grain weight of the American coin was higher than the 8 Real, the Mexican coin was made out of purer silver. Many Chinese merchants and bankers stamped the Trade Dollars with chop marks to certify their silver content. Quantities of Trade Dollars eventually found their way to India in trade for opium.

Domestically, the Trade Dollar proved to be unpopular. It was intended to circulate only in Asia. Congress, realizing that these coins were going to circulate in the United States anyway, made them legal tender for payments up to $5.00. In 1876, dropping silver prices prodded the mint to release quantities of Trade Dollars into circulation, as their face value was worth substantially more than their silver content. Congress revoked the legal tender status of the dollars, but they continued to be minted for two more years. Only proof versions of the Trade Dollar would be minted through 1885. The Trade Dollar received heavy circulation. Many were damaged by chop marking. High-grade mint state examples of this coin are rare and are seldom offered. This desirable historic coin is necessary to complete the U.S. silver dollar typeset.