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.
Chop Marks: Trade Dollars and Chop Marks - A History in the Making