Trade coins are coins minted by a government, but not necessarily

legal tender Legal tender is a form of money that courts of law are required to recognize as satisfactory payment for any monetary debt. Each jurisdiction determines what is legal tender, but essentially it is anything which when offered ("tendered") in pa ...

within the territory of the issuing country. These

quasi bullion coin Quasi (phonetics 'kwa - zee') is an American indie rock band formed in Portland, Oregon in 1993 by former spouses Sam Coomes (vocals, guitar, rocksichord, various keyboards, bass) and Janet Weiss (vocals and drums). Joanna Bolme performed an ...

s (in rarer cases small change) were thus actually

export An export in international trade is a good produced in one country that is sold into another country or a service provided in one country for a national or resident of another country. The seller of such goods or the service provider is an ...

goods In economics, goods are items that satisfy human wants and provide utility, for example, to a consumer making a purchase of a satisfying product. A common distinction is made between goods which are transferable, and services, which are not ...

- that is, bullion in the form of

coin A coin is a small, flat (usually depending on the country or value), round piece of metal or plastic used primarily as a medium of exchange or legal tender. They are standardized in weight, and produced in large quantities at a mint in orde ...

s, used to bulk buy important goods from other countries, where they could be bought at a favourable price, compared to the purchasing power of the same amount of bullion within the trade coins' country of origin. A distinction must be drawn between full value bullion trade coins, that were used in ordinary peacetime trade on the one hand, and on the other hand debased coins, that were usually made with the intention to deceive. Such debased "trade coins" were occasionally minted during times of war, e.g. the Prussian ephraimiten, silver-clad copper coins minted during the

Seven Years' War The Seven Years' War (1756–1763) was a global conflict that involved most of the European Great Powers, and was fought primarily in Europe, the Americas, and Asia-Pacific. Other concurrent conflicts include the French and Indian War (1754– ...

. If these were ever accepted or approved as legal tender, they would be valued far below the regular coins, their value being calculated according to a specified formula. The conversion rates were even then usually significantly below the intrinsic value of the coins, to cover costs of melting and recoinage etc. Since the 1920s there have been hardly any true trade coins, though some are still traded by coin collectors with a premium. Their role has now been taken over by (paper or electronic)

United States dollar The United States dollar (symbol: $; code: USD; also abbreviated US$ or U.S. Dollar, to distinguish it from other dollar-denominated currencies; referred to as the dollar, U.S. dollar, American dollar, or colloquially buck) is the official ...

s as a world currency.

Examples

One of the most famous trade coins of the 18th century is the Austrian

Maria Theresa thaler The Maria Theresa thaler (MTT) is a silver bullion coin and a type of Conventionsthaler that has been used in world trade continuously since it was first minted in 1741. It is named after Maria Theresa who ruled Austria, Hungary, and Bohemia ...

. Although dated 1780, it has been minted continuously in Austria well into the 21st century for sale to collectors. The Maria Theresa thaler was previously exported in large quantities to East Africa and the Middle East. It was so highly regarded in Africa that its purchasing power for goods and raw materials was higher there than in Austria. In preparation for the slow transition to the

gold standard A gold standard is a Backed currency, monetary system in which the standard economics, economic unit of account is based on a fixed quantity of gold. The gold standard was the basis for the international monetary system from the 1870s to the ...

in England between 1717 and 1816, in trade with the Prussians England preferred 5 and 10 thaler gold pieces ( Friedrich d'or) in exchange for quality goods. The Friedrich d'or thus became a trade coin, while it was also current in Prussia itself (although with a decreasing exchange rate against the silver Reichstaler, see bimetallism). The Hungarian and Dutch gold

ducat The ducat () coin was used as a trade coin in Europe from the later Middle Ages from the 13th to 19th centuries. Its most familiar version, the gold ducat or sequin containing around of 98.6% fine gold, originated in Venice in 1284 and gained ...

s, minted for centuries with a stable fineness, were esteemed trade coins. Other trade coins were the so-called silver trade dollars used by Mexico and the USA to buy South American or Chinese goods relatively cheaply. These countries mostly had a currency based on the silver standard or even a paper currency, and domestically set the value of silver too high even though the world market price of silver had long been lower.

Bibliography

* Heinz Fengler u. Autoren: ''Lexikon Numismatik''. transpress Verlag für Verkehrswesen, Berlin 1988,

External links

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Trade Coins
Coins History of banking History of international trade Metallism Monetary economics Monetary policy