Five-cent faceoff: Evolution of half dime to nickel|
June 14, 2018
At the present time, there is little doubt that the quarter dollar is the most commonly used United States coin. If the same question had been asked in the United States between the 1830s and the early 1900s, however, the answer would likely have been the five-cent piece. Yet the answer would have meant two different coins, depending upon just when the question was asked.
It all began in the 1820s.
The original 1792 coinage law had mandated the mintage of silver half dismes, but very few were actually made in the early years because the Spanish half real, worth 6.25 cents, was relatively common in this country and was very close in value to the half dime. (Half dime coinage was suspended in 1805 due to lack of demand.)
In popular terminology, the half real was called a half bit, the bit being the Spanish piece of one real. (One wonders if there is anyone who has not heard high school cheerleaders shouting: “Two bits, four bits, six bits, a dollar, all for [name of team], stand up and holler.”)
As early as 1820, Mint officials were seriously considering the resumption of half dime coinage, but for unknown reasons the idea was shelved for several years. Chief Engraver Robert Scot may even have prepared new dies at that time.
By the late 1820s, the supply of the half reales had begun to dry up; merchants and banks then increasingly asked the Mint to resume the coinage of half dimes. In early July 1829, Mint Director Samuel Moore did just that, and the coin was an instant success with the public.
By 1836, more than 12 million half dimes had been struck, and all went into the marketplace to be used. As the smallest silver coin, the half dime still carried weight with the ordinary citizen because it was not one of the large and bulky copper cents and had real purchasing power. Coinage remained reasonably heavy throughout the 1840s, with the half dime retaining its hold on the public as a very popular coin.
The discovery of gold in 1848 in California, and later in Australia, was to upset the world’s delicate monetary arrangements – and nowhere more so than in the United States. The large quantities of gold entering the channels of commerce meant that silver was now undervalued. Bullion dealers bought up silver coins and either shipped them to Europe or melted them into ingots. By early 1850, little silver, except for the well-worn Spanish and Mexican pieces, remained in circulation.
It was not until 1851 that Congress partially solved the problem with the introduction of a debased silver three-cent piece. Then, in 1853, the weights of the regular silver coins (except for the dollar) were reduced to the point that they would not be exported or melted. The 1853 law allowed for heavy mintages of silver to resume at once.
Beginning in 1853, large coinages of half dimes were the order of the day. More than 15 million pieces were struck at New Orleans and Philadelphia in 1853 alone, and millions more were made through 1858; in 1857, some 7.6 million pieces were produced at the two mints.
The collector wanting specimens of half dimes from the mid–1850s will encounter little trouble or expense in doing so. In VF-20, certainly an acceptable grade for most collections, between $35 and $40 will buy one of several different date and mint-mark combinations. In XF-40, the cost is somewhat higher, but $65 or a bit more will buy a decent specimen of more than one date.
Half dimes struck from 1853 to 1855 have arrows beside the date, indicating that they are of a reduced weight from those struck prior to April 1853. (The half dimes dated 1853 without arrows are scarce; many of these were melted for their silver content.) In 1856, the arrows were removed from the date, but one wonders why it took so long to do so; in the 1850s, people looked at their coins very carefully compared with the citizens of today. Surely everyone knew why the arrows were there when these coins were first issued in 1853.
The Philadelphia Mint reduced the number of silver coins struck after 1857 for the simple reason that it was forced to do so by the Treasury. The 1853 law required that subsidiary silver coins be paid out only for gold, but Mint Director James Ross Snowden ignored this provision and paid out silver coins for silver bullion at an artificially high rate, though the government still made a profit on the coinage.
The result of Snowden’s flouting of the law was a massive coinage from 1853 to 1858 of all silver denominations, the trime (three-cent piece) through the half dollar. The coinage of silver for 1859 shows quite clearly the effect of the Treasury edict. Drastically smaller numbers of coins were made. The combined mintage of 1858 half dimes at Philadelphia and New Orleans was more than five million pieces, but in 1859, the total was only 900,000. These lesser mintages mean fewer coins now available in the numismatic marketplace, with corresponding higher prices.
In 1859, irritated because he had to cut back his silver coinages, Director Snowden hit upon the idea of redesigning the silver coins to make them more popular. The Treasury gave permission, however, only for the dime and half dime. The legend UNITED STATES OF AMERICA was moved from the back of the coin to the front and the reverse wreath was enlarged to fill the space where the legend had been.
Perhaps the most interesting part of the design change in 1860 was that it was illegal. The 1837 coinage law, which was still in effect, required that the name of the country appear on the reverse. It would appear that Mint and Treasury officials had not bothered to read the law.
Coinage of half dimes was up sharply in 1860 compared with 1859, but it is unlikely that Snowden’s facelift had anything to do with this. The gathering storm clouds of the Civil War, coupled with a strong resurgence in the economy after a meltdown in 1857, meant that more coins were needed for the public. The half dime, befitting its role as the coin of the people, had by far the heaviest silver mintages in 1860-1861.
Because of the heavy mintage in 1860 and again in 1861 (there was no New Orleans coinage in 1861), the collector can easily obtain specimens of these historic coins at little cost or trouble. The 1861 is the commonest of the three and is worth about $60 in XF-40.
The attack on Fort Sumter, and the outbreak of war in April 1861, caused everyone in the South to hoard gold and silver coins within a few weeks. In the North, however, there were so many people certain that victory was just a few months away that gold was not hoarded until December 1861 and silver until June 1862. Both events were sudden and complete.
Part of the problem for the silver in the North resulted from the issuing of greenbacks early in the war. As long as the value of the paper currency held up, silver stayed in daily use, but once the paper began to slip in value, it was only a matter of time until the silver was hoarded or melted.
Half-dime coinage was very heavy in the opening months of 1862, because the coins were going into circulation and staying there, but the sudden hoarding of all silver coins in June put a quick end to regular coinage in this metal at the Philadelphia Mint. Through 1867, the Philadelphia Mint did not coin more than 50,000 half dimes in any one year.
By an odd quirk of fate, the San Francisco Mint began coining half dimes in 1863, and these did go into circulation, but only on the West Coast. In fact, during the entire war, gold and silver coins were used freely in California.
The half dimes of 1864 were long considered a numismatic oddity. The official tables of coinage showed that only 470 proofs had been struck, with no mention of business strikes, yet there existed a small number of uncirculated pieces that clearly were not proofs. In the 1960s, it was discovered that the official reports were wrong and that 48,000 circulation strikes had been made. This actually created a bigger mystery: what happened to the business strikes? Only a handful have ever turned up, and it is supposed that most were melted, but there is no certain proof of this.
By 1863, Northern marketplaces were in a desperate state. The country had been flooded with government paper money – some of it as low as three cents in value (the so-called “shinplasters”) – as well as private tokens for one cent. The silver coinage was not circulating, except on the West Coast, and complaints poured into the government from all sides. It was not a pleasant time for anyone, soldier or civilian.
Mint Director James Pollock pushed for the abolition of the copper-nickel cent because it did not circulate (being hoarded just like the silver), and nickel supplies were increasingly difficult to obtain. Pollock suggested a bronze cent and two-cent piece in its place. This proposition was strongly opposed by Joseph Wharton, who owned a nickel mine in Pennsylvania and had a vested interest in nickel coinage whether it circulated or not. For more than a year, there was a stalemate in Congress.
In March 1864, an abrupt about-face was done by the Lincoln administration, which until then had stood on the side-lines of the coinage debate. Strong pressure was put on Congress by Treasury Secretary Salmon P. Chase to adopt Pollock’s ideas. In April 1864, Congress finally responded by mandating the coinage of bronze cent and two-cent pieces. There were mass coinages of these two new bronze coins, which went a long way towards alleviating marketplace coin shortages.
As can be imagined, Joseph Wharton was unhappy at this setback to his lucrative nickel business and made plans for a counterattack. In March 1865, the Wharton forces persuaded Congress to authorize a three-cent piece made out of copper-nickel. The administration did not interfere, even though it knew why the coin was being pushed. Whatever the true reason, the country did need more coins in the marketplace.
In 1865 alone, more than 11 million of these new three-cent coins were made. Like the Flying Eagle and Indian Head cents of 1857-64, these too were called “nickels” because of the metal they contained.
Not enough nickel was being sold to the Mint (which also purchased supplies abroad), at least not enough to satisfy Wharton, and in the spring of 1866 he came to the well once more, this time persuading Congress to create a five-cent piece of copper-nickel. In the guise of going metric, the new coin was to weigh exactly five grams, proportionally much heavier than the three-cent nickel.
The new five-cent coin with its simple Shield design proved immensely popular with the public, and the last half of 1866 saw nearly 15 million pieces coined. For 1867, the coinage was even greater, reaching 30 million. In 1868, nearly 29 million pieces were struck. Clearly, the public had taken a fancy to this coin, which was equal in spending value to the treasured half dime of the past.
At the beginning of February 1867, the design of the new Shield nickel was slightly modified by removal of the rays from the reverse. This was done on the recommendation of Chief Coiner A. Loudon Snowden, who felt that the excessive die breakage might be cut back if the design were simplified. The change helped, but it was not until the early 1880s that die life improved significantly.
Mint Director James Pollock did not like the new nickels and much preferred the old half dimes. In league with the Treasury Department, he arranged in the late 1860s for the production of large numbers of dimes and half dimes at the Philadelphia Mint in an effort to put them into circulation.
This first attempt to put silver back into use failed because the coins were promptly hoarded, and the new nickels continued to dominate the marketplace. The nickel was the largest coin (in terms of value) then widely used by the public, which quickly grew to appreciate the coin. The half dime had begun to drop from public memory, as if it was something from the dim past.
During the late 1860s, there was a great debate in government circles about reforming the coinage so that silver would once again circulate. President Ulysses S. Grant, who assumed office in March 1869, ordered that silver be put into daily use as soon as possible. Pollock, who was involved in the discussions, fought strongly for the old half dime but was outmaneuvered by supporters of the copper-nickel five--cent piece. In the early 1870s, efforts continued to force dimes and half dimes into daily use, but each time they failed. The public still hoarded silver coins.
Finally, in early 1873, a comprehensive coinage bill came before Congress, and the fate of the half dime was sealed: along with the trime and two-cent piece, it was abolished as a denomination. The “nickel” was now the only five-cent coin produced by the Mint.
The demise of the half dime was in part a compromise between the Wharton forces pushing nickel for coinage and the mining interests who wanted additional silver coinage. Authorization of the Trade dollar under the new 1873 law was thus one of the tradeoffs for the abolition of the half dime.
Director Pollock had lost the battle to save the half dime, and today only the collector is now left to appreciate the beauty and value of this once useful coin.
This article was originally printed in Coins Magazine. >> Subscribe today.
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