Birth of the nickel: New coins were immediately popular|
July 13, 2017
The changes to the Jefferson nickel from 2004 to 2006 brought renewed collector attention to this denomination. The collecting of modern era nickels thus received a boost, something long needed. Today there is increased interest for all of the nickel designs, not just those of the past few years.
Prior to 1862 the silver half dime, also worth five cents, circulated widely throughout the United States. It had been struck since the first days of the Philadelphia Mint and had served the marketplace well. The outbreak of the Civil War in April 1861, however, meant that a nervous public would hoard silver and gold coins and this in fact soon happened.
The disappearance of silver during the summer of 1862 left little in the way of coins for the public to use for their daily needs. With only the lowly cent still in circulation, the government-issued notes (derisively called “shinplasters”) down to three cents in value to make up for the loss of silver coins.
In 1857 the composition of the cent had been changed from pure copper to copper-nickel and the coin made much smaller in the process. Large numbers were struck as the new cent became increasingly popular with the public.
The strangest thing, however, began to happen in the latter part of 1862: The public began to hoard even the copper-nickel cent. No one then understood why this was happening as the intrinsic worth of the cent did not exceed half of the face value. By the middle of 1863 coins with the government stamp were rarely to be found in daily use.
Although some of the void was filled by private bronze cent tokens, pressure on the government to provide coins for the marketplace grew at a rapid pace and something had to be done. In April 1864 despite intense lobbying by Joseph Wharton and several friendly legislators, Congress changed the composition of the cent to bronze and also created a two-cent piece in the same alloy.
(The new law came at a bad time for Wharton. He had recently purchased the only operating nickel mine in America, located in Pennsylvania, and had hoped to supply the Mint with nickel for the cent coinage.)
The Wharton forces bided their time and then, in the winter of 1864-1865, struck back. The first point of attack was to create a new denomination, the copper-nickel three-cent piece, but not with the old ratio of 12 parts nickel to 88 parts copper found in the cent of 1857-1864. In late February 1865 the Wharton supporters persuaded Congress to pass a bill authorizing the new three-cent piece, containing 25 percent nickel. President Andrew Johnson signed the bill on March 3.
Not long after the congressional approval of the new three-cent piece, the Wharton supporters proposed yet another coin in the same alloy, this time for five cents. One of the main targets of this campaign was Mint Director James Pollock. The director, however, was not a supporter of nickel at all and favored the half dime.
The Mint director was eventually persuaded to throw his support behind the copper-nickel five-cent piece on the grounds that, once the monetary problems had been solved, the coinage of half dimes would resume. In fact, just the opposite happened; the half dime itself was abolished in 1873.
In his annual report for fiscal 1865, Pollock noted that he would accept the new five-cent piece at a weight up to 60 grains (3.89 grams). This would have actually created a coin proportionally heavier than the three-cent piece. The weight should have been 50 grains to have been in conformity with the smaller piece.
There was a considerable push after the end of the war in some quarters, especially scientific, for the United States to go on the metric system and supporters of a nickel currency seized upon this to promote the new coin as a metric cure-all. They suggested a coin weighing exactly 5 grams (77.16 grains).
Since the public still wanted a reliable metallic currency to replace the ragged shinplasters, many congressmen were more than willing to help with the new five-cent piece. Once Pollock had given his grudging approval, it was only a matter of time. On May 16, 1866, President Johnson signed into law the bill authorizing the new coin.
Toward the latter part of 1865 it had become obvious to Mint officials that the five-cent nickel coin would soon be a reality and Pollock ordered chief engraver James B. Longacre to begin work on possible designs. Several of these were then made into pattern coins to be examined by the Treasury. Only one design was actually made in 1865 (which later was used for the regular issue of 1866) but others dated 1865 were later struck for collectors.
There were several more pattern nickels by Longacre in early 1866, including one using the head of Washington. There was another of Lincoln but all knew that this one would never be accepted in the Southern states that had made up the Confederacy. On May 28, 1866, Pollock forwarded to the Treasury several patterns along with a description of each. Pollock noted that he personally favored the Shield design.
The head of Washington, though considered as quality work by all who saw it, was nevertheless rejected because of the prejudice against the heads of actual people appearing on American coinage. The reverse with stars and rays was perhaps chosen on the grounds that in some small way it promoted unification between parts of the recently divided nation.
The adopted obverse was the national shield surmounted by a small cross for ornamental purposes though there were the usual complaints, made by people with too much time on their hands. Small-minded politicians even claimed that this was a religious plot on the part of President Ulysses S. Grant, who was not even in office when the design was chosen.
There was considerable pressure to begin coinage and the first 3,000 pieces were delivered on June 11, 1866. Once issued in quantity, the public devoured the new coin and the presses seemingly could not strike them fast enough. It was immensely popular with a coin-starved public.
The beginning of actual coinage proved to be a difficult time for the engraving staff. Longacre was hard pressed to provide enough dies for coinage. Chief coiner A. Loudon Snowden was able to produce the necessary planchets but in many cases they were not annealed (softened) properly before striking and the breakage rate for dies was very high. It was, however, difficult for the coining department to determine whether or not planchets were properly annealed due to the nature of the alloy.
At times, a pair of dies struck less than 10,000 pieces and the coinage during 1866 was more than 14 million. The number of dies used for the new five-cent piece was enormous. (In the 1880s Morgan dollar coinage sometimes saw more than 400,000 pieces from a pair of dies.) Because dies could not be prepared fast enough, the collector often will see 1866 Shield nickels with die cracks. The coiner had little choice except to keep dies in the press as long as possible.
Snowden approached Longacre in the late fall of 1866 to see if a solution could be found to the excessive die usage and the resulting low quality of many of the struck pieces. Snowden felt that there was simply too much metal that had to flow into the reverse design elements for everything to come up properly. The pressure on the dies had to be increased to bring up the design, especially on the reverse, and this increased the die breakage. As a result of this discussion Longacre agreed to remove the rays from the reverse.
The first patterns without rays were struck toward the latter part of 1866 and careful tests were carried out to see what effect the revised reverse design would have on die life. Snowden informed the Treasury that there was a distinct improvement and asked for permission to change the reverse design. On Jan. 21, 1867, Treasury Secretary Hugh McCulloch wrote Mint Director William Millward informing him that the change in reverse design was approved.
Snowden then notified Millward that he proposed to begin coining the new reverse design on Feb. 1. There were 2,019,000 pieces struck in January, leaving 28,890,500 nickels of 1867 coined without rays.
Although proof nickels were struck for collectors in 1866, Snowden refused to strike the 1867 type with rays for the proof sets. A small number of pieces were struck in January 1867 but these were quietly passed out to a few privileged collectors. Others were struck in 1868 and perhaps as late as the spring of 1869.
By the summer of 1869 nickel coinage had begun to level off as there were now more than 80 million of these new coins in circulation. Added to the very strong coinages of the bronze cent, two-cent piece, and three-cent nickel, there were now plenty of minor coins for the public to use in the marketplace.
From 1867 to 1871 there was a series of patterns for the nickel, some of very good workmanship. It was recognized from an early date that the 1866 design was not all that good and needed something better in its place. However, despite the quality of some of the patterns, nothing was done. Even aluminum was tried as an experiment but did not meet with official approval.
The Mint sold aluminum patterns to collectors for $5 each, an extraordinary price in those days, and received an great deal of criticism for doing so. Sales were disappointing because of the high price charged. One numismatist remarked sarcastically that, if collectors waited long enough, they could buy pattern nickels just like oysters, served in any style.
In 1871 nickel coinage fell to under 600,000 pieces, the lowest for any year between 1866 and 1876. However, there were other reasons for the reduced coinage; it is not widely known, but the Philadelphia Mint not only struck nickels during this period, but also cleaned them.Many of the coins which found their way to the Treasury were sent to the Mint to be scrubbed and then reissued to the public.
One of the reasons for the lower coinages was “private” competition with the Mint. Counterfeiters in New York City and a few other places saw the great profits to be made from nickels and issued quite a few of them, especially in the mid-1870s. Mint records indicate that 1875 was one of the favorite dates for the clandestine coiners.
In the summer of 1873, for the first time since 1862, the government began to put silver coins back into daily use. This was possible because the value of the paper money was now about equal to the silver minor coinage. It was touch and go for a while, but by 1875 large numbers of silver coins, especially dimes, were in daily use once more; at the same time nickels began to flow back to the Treasury as there was less marketplace demand for them.
By 1876 the Subtreasuries had become clogged with nickels—as well as other minor coins—and there was decreasing public demand. The Treasury, under provisions of an 1873 law, ordered three- and five-cent nickel coinage stopped until there was a need to resume coinage. In early 1877 it was the turn of the Indian Head cent for the same reason, though cent coinage did resume in 1878.
For 1877 and 1878 the Mint produced the famous proof-only coinage for the three- and five-cent pieces. In 1877 the Mint struck about 900 sets of the minor proof coins and all were sold to numismatists. At the present time the 1877 nickel in proof brings a good price due to demand from date collectors.
When the majority of collectors learned of the small number of nickels made in 1877, there was a considerable increase in orders for 1878. Some 2,350 minor proof sets were sold and, as a result, proof coins of this year may be obtained at a more reasonable price than for 1877.
The small coinages of 1879 through 1881 do not reflect public demand but rather the actions of A. Loudon Snowden, not only the recently-appointed superintendent of the Philadelphia Mint but also an avid numismatist. He felt that both proof and uncirculated specimens of each date ought to be available to the average collector at a reasonable price and petitioned the Treasury to allow him to strike a limited number each year. The request was granted.
It should be noted that not all of the requests for nickels came from collectors. Then as now stocking stuffers were busy at Christmas and in the 1870s a nickel was a fine present for a small child.
Shield nickels continued to be made in small quantities through 1881 when rising public demand finally persuaded the Treasury, in December of that year, to allow large-scale coinage to resume. In 1882 mintage rose to more than 11 million pieces and this pace was maintained in 1883 although during most of that year the Liberty Head nickel was coined instead of the Shield design.
One of the more interesting coins of the last years of the Shield nickel is the 1883/2 overdate nickel. This has been popular with collectors over the years because it was struck in relatively large quantities.
At the same time that regular coinage resumed toward the end of 1881, Superintendent Snowden was planning to do away with the Shield design and replace it with something entirely new. He had ordered chief engraver Charles Barber to come up with a better design and during 1881 patterns were struck to illustrate the new ideas.
Snowden submitted the patterns to the Treasury Department in 1882 and toward the end of the year the new Liberty Head design was approved. It took time to get the dies ready, however, and the Shield nickel was coined during most of January 1883, with nearly 1.5 million specimens seeing the light of day.
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