The idea first came about in the 1860s, when the price of silver began to decline due to increased mining in the western United States.

A bill providing in part for the issuance of the trade dollar was eventually put before Congress, where it was approved, and signed into law as the Coinage Act of 1873.

Eventually, bullion producers began converting large amounts of silver into trade dollars, causing the coins to make their way into American commercial channels.

As a consequence, copper and paper currency gained prominence as the primary means of exchange, marking a significant change in the monetary landscape of the time.

[5] Garnett recommended that the United States mint a commercial dollar that would be exported to East Asia to compete with other countries' silver trade coins that were already popular in that region.

[5] Garnett's rationale was that the majority of the coins would be hoarded or melted in Asia and would never be presented for redemption, allowing the government to make a profit from the seigniorage.

[8] In the report, Linderman argued that the coin need not hold legal tender status, and that it could simply be a piece of silver imprinted with its weight and fineness.

[7] The revised bill, which came to be known as the Coinage Act of 1873, was approved in the House and Senate and was signed by President Ulysses S. Grant on February 12, 1873.

[13] At the insistence of Ohio Senator John Sherman, the weight and fineness of the piece was indicated on the reverse, an attribution which numismatic historian Don Taxay found incomprehensible as "Chinese merchants would never understand them".

[16] After passage of the Coinage Act, Linderman met with Director of the Mint James Pollock to discuss the design of the newly authorized trade dollar.

[17] In June 1873, Linderman reviewed the various patterns created by Barber; he chose[18] an obverse which one contemporary reporter described as "a female figure seated on bales of merchandise, holding in her left hand a scroll bearing the word 'Liberty'.

At her back is a sheaf of wheat, expressing, with the bales of goods, the commercial character of the coin: the right hand extended holds the olive branch.

[20] A set of six patterns, four with variations on the adopted obverse, and two showing portraits of Liberty, was sold by the Mint to the general public in limited quantities.

[12] In the fall of that year, Linderman suggested that the reverse of the trade dollar should be altered in 1876 to commemorate the centennial of American independence; Pollock opposed the idea, noting that such a change would be difficult to carry out because Congressional approval would be necessary and that it might cause the coin to lose favor in East Asia.

[25] In May 1876, former assistant engraver Anthony C. Paquet created a reverse die after being hired by Linderman to improve the striking quality of the coins.

You must know that the 'Eagle Trade Dollar' that has lately come to Hong Kong has been jointly assayed by officers specially appointed for the purpose, and it can be taken in payment of duties, and come into general circulation.

At the same time rogues, sharpers, and the like, are hereby strictly forbidden to fabricate spurious imitations of this new Eagle Dollar, with a view to their own profit.

[12] In early 1875, Congress passed the Specie Redemption Act, allowing the Treasury to pay out silver coins in exchange for paper currency.

[37] As the price of silver decreased, employers in the United States began paying workers in trade dollars purchased at a discount.

[38] Businesses which did accept trade dollars to avoid offending customers could not deposit them in banks or use them to pay taxes, and sold them to brokers.

The brokers in turn recirculated the coins by selling them at a discount from face value to employers who included them in workers' pay packets.

[40] Numismatic historian Walter Breen criticized both the legal tender provision and the coin in general, stating that the coin's issuance was "an expensive mistake – its motivation mere greed, its design a triumph of dullness, its domestic circulation and legal tender status a disastrous provision of law leading only to ghastly abuses.

Trade dollars were again made legal tender by the Coinage Act of 1965, which stated in part "All coins and currencies of the United States (including Federal Reserve notes and circulating notes of Federal Reserve banks and national banking associations), regardless of when coined or issued, shall be legal tender for all debts, public and private, public charges, taxes, duties, and dues.