CHOPMARKED COINS, Worthless or Historically Significant?

For many years I believed what I had heard concerning chopmarked coins; they're damaged and not worth collecting. Then a fellow WINS member posted an image of a coin so full of chopmarks that you could barely make out what type of coin it was, and I was hooked and had to learn more. Here are a few things I have learned as a member of the Chopmark Collectors Club.

Chopmarked coins, unlike most coins that tell us nothing of where they've been, can speak volumes. All of those marks tell us where the coin has been and what it was used for, and are strongly tided to events of the day. Chopmarks differ from countermarks (or counterstamps) in that a countermark was a monogram added by a government making the coin acceptable for use in that country. One of the most well known countermarked examples is the oval bust of George III on various Spanish Colonial coins of the late 18th century (shown at the left).

Chopmarks are basically countermarks used by Chinese bankers and merchants stamped on coins as a defense against debased counterfeit coins. Chopmarks also signified that a coin's composition had been verified and that it was acceptable for use in trade. Chopmarks can take a variety of forms as shown in the table below.

Chopmark Varieties (as defined by "F.M. Rose")
Test Marks	The most common usually made with a punch. Its purpose was to test the coin to see if it was silver- plated base metal or hollowed out.
Edge Cuts	Common, aimed at determining if the coin was a plated fake.
Small Chops	Common, can consist of abstract symbols such as circles, stars, and crescents etc. or Chinese characters. Most commonly found on Mexican Cap and Rays 8 Reales.
Large Chops	Common, usually consisting of Chinese characters, pseudo characters or abstract symbols.
Chops in Relief	Small relief chops are scarce while large relief chops are rare.
Assay Chops	A rare special relief chop made by a banker, usually retangular containing two or more characters.
Letter Chops	Scarce, consisting of the Latin alphabet. The most common letter used was the letter 'S'.
Number Chops	Moderately scarce, consisting of large chops, the number 8 being the most common followed by the number 5.
Manchu Chops	Extremely rare, consisting of Manchu script.	Example needed.
Banker's Ink Chops	These come in red, blue, purple and black ink, and can be difficult to find high grade.
Paper Chops	The usual paper chop is called the "happy wedding".
Presentation Chops	Elaborately drawn in India ink comprised of letters surrounded by fancy borders, dragons and flowers often covering the entire coin.	Example needed.

 
To understand why the Chinese felt it necessary to "chop" all silver (and a few gold and even fewer copper) coins, it is helpful to understand what was going on in China economically at that time.


Prior to 1842 Canton was the only Chinese port open to foreign trade so it stands to reason that the practice of chopping coins probably began in Canton. References in the "Chronicles of the East Indian Trading Company" indicate that chopmarked coins were in use in 1776.

Over time local Chinese officials developed a consortium of merchants known in the west as the Cohong system, to conduct foreign trade. During the 1600's and 1700's foreign traders wanted commodities such as tea, silk, porcelain and lacquer ware, but the only commodity China wanted in return was silver. Ships from England, Spain, Portugal, Netherlands, France, Germany, Denmark and America carried to China tons of silver - most of it produced in the mines of Spanish America.


Tao Kuang, Emperor of China from 1820 to 1840, issued an Imperial Edict, ordering that the only form of payment Chinese merchants could lawfully accept for the goods they sold to foreigners was silver coins. This attempt to stop barter caused the English to seek a commodity that Chinese merchants wanted badly enough to risk Imperial wrath to pay for it with silver. Otherwise China would soon have all the world's silver and the East India Company would run out of profits from China trade. That commodity was opium. England had opium, grown in India, and could sell all they could deliver to the Chinese who were willing to pay in silver coins. The Imperial government blamed the English for the terrible increase in opium addiction in China, which ultimately led to war.

Thus came the Opium War, Part 1 was fought between 1838 and 1842, and Part 2 ran from 1850 to 1860. This also triggered the Tai-Ping rebellion, 1850-1865, which was suppressed by the government and went underground to resurface as the Boxer Rebellion. This too was suppressed by the government, but not finished. It turned into two things, the Revolution of 1911, which overthrew the Ching Dynasty; and the Triads, which became secret criminal organizations similar to the Mafia.

China produced very few dollar sized silver coins before 1890 using instead the circulating silver dollar coinage of other countries. The most widely traded coins of the time were the Spain's and Mexico's 8 Reales coins, but other countries not wanting these to become the world-trading standard started producing their own dollar-sized silver trade coins.

Major Trade Coins that Circulated in China Note: This table only covers the large trade silver, but other demnominations and coinage from other countries did circulate and receive chopmarks.
Spain	8 Reale or "Spanish Dollar", 1732-71 (Rare, conceptual image used until actual image can be obtained.)
Mexico	8 Reale or "Pillar Dollar", 1732-72
Mexico	8 Reale or "Carolus Dollar", 1772-1808
Hong Kong (British Rule)	"Dollar", 1866-68 Chops on the Queen's face were considered bad luck and are rarely seen. (Conceptual image used until actual image can be obtained.)
Japan	"Trade Dollar", 1875-78, 416 grains, .900 fine, (increased to 420 grains in late 1875)
Great Britian	"Trade Dollar", 1895-1938, 416 grains, .900 fine
United States of America	"Trade Dollar", 1873-85, 420 grains, .900 fine
France	"Piastre de Commerce of Indo China" 1885-1928
Austria	"Maria Theresia Thaler" 1740 to the present. Almost unheard of and their authenticity is questioned by many researchers.

 
One thing thing to keep in mind: the Chinese people accepted the coins above by weight, as "7 Mace and 2 Candareens" of standard silver, but not as a "dollar" which did not become legal tender until 1889. But, with all of the types of dollars and variations of silver content, it was becoming difficult to determine which coins to accept and which to avoid.


Compounding the problem was the influx of counterfeit coins. Researchers have uncovered records describing the production of counterfeit coins for the Chinese market. One was by a Mr. Pablo Bordeauz, "Made in Birmingham in 1792, Counterfeit Spanish Pieces of Eight, Countermarked in China", where he documented manufacturing methods of copper coins plated with silver and specified a production scale amounting to 25,000 pounds of counterfeit coins weekly during 1792.

Another report is that the British established a mint in Canton at the end of the eighteenth century in order to strike forged pieces of eight dated 1778 and that by 1790 several million forged coins were circulating in China. It turns out that the East India Company made a big mistake, and that was to leave the mint in the hands of the natives. They were producing forged Mexico Carolus Dollars, but Chinese workers anxious to make money for themselves too, began increasing the copper content of the alloy and keeping the silver. 

Coins put into circulation were .600 fine instead of the correct .902.7. The flamboyant mint of the East India Company went bankrupt and closed its doors.

Between the coins not of Chinese origin and the large number of forgeries, some form of silver content guarantee was needed. To solve this problem, the native bank or moneychanger added their "chop" to each dollar that passed through their hands. This "chop" was normally a single symbol or letter or sometimes a secret symbol known only to that particular money changer that:

1. showed the coin was given out by them,
2. certified the silver content was standard,
3. and that they agreed to accept the coin back without argument.

"Chop" is said to be a word imported by the English from India where the word was "Chappa" or "Choppa", meaning seal or official stamp.

Deciphering the meaning of these little "chops" can be an exercise in frustration. First, they are over 100 years old and many of the characters are no longer comparable to modern-day characters. Therefore it is difficult to translate them into a modern English-Chinese dictionary and necessitates locating someone who can read the old characters. 

Secondly, research has shown that many of the "chops" turned into personal marks of identity like a monogram, some even using an assemblage of characters similar to a cattle brand. Chinese characters are made up of meanings, which may describe the person's physical appearance, title or other unique feature. This "chop" change may have been caused when local businessmen took up the practice of chopmarking.

Unfortunately, the practice of counterfeiting coins, even those bearing chopmarks, continues in China today so great care should be exercised when selecting coins for your collection. For some collectors chopmarked coins will always be damaged goods, but for others they represent a moment in history. And, just like in other facets of this hobby, you should always collect what you like, not what someone else tells you too.




Information Sources:

Chopmarks by F.M. Rose, 1978.
Chopmark Collectors Club Newsletter, "Chopmark News", July 1990 through 2008:
- The Numismatic Scrapbook Magazine, July 1945, "The Trade Coins of the far East" by Arlie Slabaugh.
- The Numismatic Scrapbook Magazine, July 1960, "Chopmarks on Chinese Coins" by R.A. Leonard.
- El Duro by Adolfo Herrera, 1914, "Countermarks on Chinese Coins".
- "Sobre los Chap Marks o Contramarcas Chinas", by Manela Gonzalez Fuenteas.
- "Chop Marks Brand Chinese Coins" by Peter F. Hamilton.
- Coins Magazine, September 1970, "The Chop-marked Dollar" by Ray Young.

Trade Dollars and Chop Marks - A History in the Making

After the U.S. Civil War, two things were happening: US mines were producing enormous amounts of silver, and fears of the economy meant precious-metal coins were being hoarded and weren’t in circulation. As a growing nation in an international market, the U.S. wanted to engage in trade with foreign nations. At the time, however, the standard coin for international trade, due to its high silver content, was the Mexican Peso. This created a huge opportunity for the United States: an excess of valuable silver, growing international trade, and a potential advantage in coinage led to the Trade Dollar.

The U.S. already had a silver dollar at the time, but Mexico was producing a silver peso with a higher silver purity, making their coins more valuable by weight than the U.S. dollar. To even the field, the mint developed a slightly heavier coin, using the same purity metal as the previous dollar, which brought it on par with the peso. To differentiate the more-valuable coin from the regular dollar, the U.S. marked its weight and purity on the reverse — “420 grains, .900 fine” — and identified them as a “Trade Dollar”, a coin for international trade rather than domestic commerce. The U.S. Mint performed more direct service to citizens at the time, and anyone who produced a silver ingot could have it “converted” to Trade Dollars for a small fee. Operators of silver mines found themselves with the ability to place their silver on the international market without a middle-man, which resulted in a quick increase in the U.S.’ trade wealth. Millions of Trade Dollars were minted and were sent overseas; however, some didn’t make it. The coin, as a precious metal, had a intrinsic value and people began using them in stateside transactions as well.

By 1876, however, the Trade Dollar ran into trouble. Silver continued to flow into the market, both from domestic and foreign sources, which led to a drop in silver’s value as a precious metal. There were hundreds of thousands of the coin in circulation in the U.S., being transferred at face value, while the actual metal value was far less. This imbalance had been the source of much of the U.S.’ banking troubles in one way or another for decades, wobbling between devaluation and hoarding, and the Trade Dollar was now worth far less than its transactions. For the one and only time in U.S. history, the Mint demonetized a circulating coin, declaring all Trade Dollars only as valuable as the precious metals inside as of July 1876. For a short time, unscrupulous people bought the Trade Dollar at scrap value — pennies on the dollar — and spent them with whoever would take them. Banks, however, wouldn’t accept them as deposits, and the declining silver market continued to reduce their value to a mere fraction of what they had been worth when backed by the Mint. Foreign trade still used the silver coin so the Mint continued to produce them until 1878. After that time, small numbers of the coin were produced as proofs for collectors.

Most Trade Dollars went into the furnaces of precious metal dealers, and those that ended up back at the Mint met a similar fate. Many examples, however, did survive, especially in the coffers of those overseas traders who chose to accept the Trade Dollar in commerce. The proofs produced from 1876 to 1885 have the most firmly-placed values, because there were a specific number produced and they are quite scarce.

There is no way to know how many pre-1876 coins are still in circulation, because it is likely many that went overseas were melted for their metal as well.

The majority of Trade Dollars that still exist bear the marks of the Far East traders who accepted them, called “chop marks”. The traders cut the coins, or struck them deeply with an identifying character, to ensure that the metal was of the right softness and there wasn’t a copper layer beneath the silver. As such, most coins in the collector’s market today have these chopmarks, while the unmarked ones tend to be proofs. The proofs, due to their scarcity, sell for hundreds of dollars, while the rarer proofs from the 1880s are worth thousands. Marked and circulated coins may sell for $50-$100, which is still far more than the value of the silver as a precious metal. Much of that value is purely the collector’s market, due to this unique coin’s rarity and history.

View Article Source

So What are Chop Marks?

Chopmarks are privately applied punchmarks to show that a particular merchant has determined that the coin is "good" silver (usually) or gold (occasionally). They are almost always crude, and placed on the coin in a random position. 19th Century Asian merchants were so trusting of each other that they frequently ignored prior chops and added their own after independently verifying the coin's allloy and weight.

There are Japanese yen and Chinese Yuan so heavily chopped that it is difficult or impossible to date the host coin, or even make out design details that vary by variety.

Countermarks are also punched into the coins, but they differ in purpose and source, and generally in method of application. They are applied by governments, or government wannabes - that is revolutionaries or invaders. Their purpose is not so much to verify the metallic content and value, but to authorize - or prohibit - circulation as money in a particular area.

Often, but not universally, they are more detailed and intricate than the typical chop, and they are frequently placed in the same general location on each coin. For example, when the Japanese (temporarily) demonitized their silver yen and trade dollar coins, the character "Gin" or "silver" was stamped on each coin in a circle. The main mint at Osaka stamped the reverse to the left of the "yen" or "silver for trade" legend, and the Tokyo Branch Mint placed the same stamp on the right.

Read more: http://www.cointalk.com/t9735/#ixzz1LwInH4zk