USA Coin Album: A Tale of Two Coins — Part One

The year 1878 was a very interesting one for the several U.S. Mints, as they responded to the introduction of a new coin type, the suspension of another and the near discontinuance of production for several more. I've written previously of how the large mintages of fractional silver coins during 1875-77, combined with the return of millions of earlier pieces to circulation after 1876, led to drastically reduced production of dimes, quarters and halves during 1878. Coining of the two higher denominations, in particular, was limited almost exclusively to Philadelphia until 1891. In this month's column, however, I want to take a look at what happened with just dollar coinage at the San Francisco Mint, as this activity makes for an interesting story in itself.

When standard silver dollars were discontinued in 1873, it was not anticipated that these would ever again be produced. They had seen only limited production and circulation for most of their history, and few businesses or individuals requested them. On the other hand, merchants engaged in commerce with East Asia sought a new dollar coin of higher silver content that would be competitive with the Mexican 8 reales pieces coveted by Asian traders. Americans were compelled to buy these from Mexico at a premium of several percent over bullion value, and it was argued that the U.S. Mint should furnish a coin of similar weight in their place.

Trade dollars were authorized under the Act of February 12, 1873. They proved partially successful in gaining acceptance in the Asian trade, but their downfall was an undesired circulation in domestic commerce. Trade dollars were purchased at the mints for their bullion value, and when this fell below one dollar, their legal tender status was revoked in 1876. Thus, they became an irredeemable nuisance to Americans holding them.

On February 22, 1878, Treasury Secretary John Sherman instructed the three mints then active to suspend production of trade dollars, as it was anticipated that this coin would be discontinued by law. The Philadelphia Mint had struck none at all for circulation that year, while Carson City was able to terminate production with just 97,000 pieces struck the previous month (44,148 of these were subsequently melted). On January 28 this mint shipped six unused obverse dies to San Francisco for use there. Since the series' inception, the majority of trade dollars had been coined at the San Francisco Mint from bullion deposited with it for that purpose, and it was this facility that took the longest time to comply with the new instructions. Some 1,695,819 pieces had been coined to that point, and it was not until early April that all existing orders were satisfied. This resulted in a total mintage of 4,162,000 1878-S trade dollars.

In addition to the six obverses transferred from Carson City, San Francisco had received 45 1878-dated obverses and 30 reverse dies from the Philadelphia Mint in December, 1877. (Sending a smaller quantity of reverse dies was not unusual. As they were undated, reverse dies received in previous years could be used for as long as they remained serviceable).

Early in 1877, San Francisco Mint Superintendent Oscar LaGrange had complained to the Philadelphia Mint's die makers that his trade dollar obverses had been failing after coining only about 10,000 pieces, just a fraction of the number they should have produced. Perhaps in response to an inquiry from Philadelphia, LaGrange's successor, Henry L. Dodge, shipped a set of one obverse, one reverse and one collar to the mother mint for inspection on January 29, 1878. It's likely that personnel in the die shop wanted to see what the western mint was doing with its dies that made them fail prematurely. It's probably no coincidence that a total of 49 obverse dies were shipped to the San Francisco Mint shortly thereafter in a series of deliveries spanning February 5-20. There's presently no way of knowing whether these were intended to supplement the December shipment of dies or to replace it altogether. On April 25, Mint Director Henry R. Linderman wrote Dodge requesting the number of trade dollar dies still on hand there. The superintendent answered May 3, reporting a stock of 37 obverses and 40 reverses, which, of course, were never used.

The 1878-S trade dollar is among the most common issues in this series, possessing the fourth highest mintage. Examples were still being recovered from the Far East through the 1950s. Numismatic Guaranty Corporation has certified 1,214 examples with numeric grades and an unspecified quantity with Details grading. Gems, however, are quite rare, with a mere 25 pieces graded MS-65. Some eleven coins have been certified as MS-66, and none higher. A total of six examples have been designated as PL (prooflike).

Numismatists have identified a couple of nice doubled-die reverse varieties for this date, both of which are attributed by NGC under its VarietyPlus® Service. Two mintmark punches have been recorded, but these are similar enough in size and style as to be of little interest. Indeed, both are common.

Next month I'll take a look at the other 1878-S dollar—the Morgan type which debuted that year.

David W. Lange's column, “USA Coin Album,” appears monthly in The Numismatist, the official publication of the American Numismatic Association.