Coin shortage led to silver 3 cents|
August 07, 2018
Due to a coin shortage that began in the late 1840s, the mints began to strike tiny little silver coins worth only three cents in 1851. Despite their usefulness, the public began to call them “fish scales,” and the name stuck. The story of this interesting coin began with an unexpected discovery in 1848.
Foreman James Marshall was working on the Sutter ranch in California in January 1848 when he accidentally discovered flakes of gold while watching workmen digging a trench. Sutter attempted to keep the matter a secret, but word soon spread throughout the countryside and, within a short time, all over the West Coast. It was not long before Eastern newspapers made the discovery common knowledge.
This discovery electrified the country. By the tens of thousands, men quit their jobs and headed for the new El Dorado. A few got rich, but most did not. It was not long before mining companies were organized to tear the gold from the earth, and they did so with great success. Within a matter of months, gold production in California was very heavy.
Today we tend to think that a major discovery of gold will be a blessing to mankind, but this was not always the case. In the mid-19th century, the monetary systems of the world were in delicate balance as many of them were bimetallic, meaning that gold and silver coinage were of equal importance.
In order to have a bimetallic system that works, however, there must be a fixed ratio between gold and silver. In 1847, the world ratio was approximately 1 to 15.8, meaning that one ounce of gold would buy about 15.8 ounces of silver. The official bimetallic ratio in the United States was 1 to 15.998, close enough to the world ratio to allow our system to function well in the world economy.
The vast outpouring of gold from California and Australia (the discoveries came shortly after those in California) upset this delicate ratio on the world markets and, by 1853, the ratio dropped to about 1 to 15.3. That is, in terms of gold, the price of silver went up, pushing silver market value to more than face value. This officially undervalued silver, and soon bullion brokers were buying up silver coinage throughout the United States. The coins could be melted and the silver bullion sold for a profit. As early as the summer of 1850, there were definite signs of a silver coin shortage in this country as a result.
In Congress, someone came up with the idea of a debased three-cent piece of silver. The original suggestion was merely one of many to improve the coinage system and had nothing to do at the time with the discovery of gold and the change in the market ratio. As early as December 1848, Mint Director Robert Patterson was considering a Congressional request to investigate the idea.
Patterson thought the idea worth exploring because such a coinage would take the pressure off the copper cent. Copper prices had been rising, and the director felt that a small coin worth three cents might prove useful to the public. To this end, he ordered dies engraved and patterns struck for examination. In January 1850, a few pieces were struck off and sent to the Treasury for closer examination.
Despite this early interest, Congress then chose to ignore the whole idea even though a bill was introduced for such coinage in May 1850. The patterns were made available to legislators, but Patterson decided not to push the idea, either. It simply was not that important at this time.
In addition, although not a direct challenge to the concept, there was a problem at the Philadelphia Mint itself. Chief Engraver James Longacre was then engaged in a personal feud with Chief Coiner Franklin Peale. The latter was a close friend of Director Patterson, which led to further recriminations on all sides.
One of the reasons for the dispute was that Peale controlled part of the engraving functions at the Mint. As early as the 1820s, the coiner’s office had prepared a portion of the working dies, and this continued after Longacre became engraver in 1844. The latter demanded the right to execute all working dies and new designs but was ignored by Peale and Patterson.
By late in 1850, there was little silver coinage to be seen in the American marketplace. Citizens had to make do with a variety of substitutes, including cent pieces made up in bundles of 25 or 50 so as to equal quarters or half dollars. Copper coinage was very heavy in 1850-1851, but the rising price of copper meant that there was now a real danger of losing money on such coinage.
Finally, in early 1851, Congress acted to create a three-cent piece. The official rationale was that, because the first class postage had been lowered to three cents, a three-cent coin was now needed to purchase stamps. There was some validity to this claim, but the coin shortage was perhaps the more important reason.
In March 1851, President Millard Fillmore signed into law a bill creating the Trime, as the three-cent silver piece would be officially known. The fineness was set at .750 fine compared to .900 fine for regular coinage, meaning that the silver content was low enough that bullion dealers would not purchase them for export.
Passing a law, however, does not mean that coins will instantly flow into the channels of commerce. Franklin Peale saw his chance to design the new coin and enlisted the aid of the director. At first, Longacre seemed to be blocked from performing his own duties.
However, Longacre was adept at pulling political strings and had been working quietly behind the scenes to create an acceptable design without Patterson’s knowledge. In mid-March 1851, after the bill had become law, Longacre privately sent Treasury Secretary Thomas Corwin some trial strikes from dies newly completed. Longacre assumed, correctly, that Corwin would show the patterns to the President.
In the meantime, Patterson, in the dark about Longacre’s activities, encouraged Peale to execute his version of the three-cent piece. Longacre learned of this and gave Patterson one of his patterns for official transmission to the Treasury as well. Patterson sent the Peale and Longacre patterns to Corwin on March 25 with the pointed remark that Peale’s work was the better of the two.
Within a short time, Patterson was informed by Corwin that Longacre’s design had been approved by President Millard Fillmore and that coinage should begin as soon as possible. Not long afterwards, at the end of June 1851, Dr. Patterson resigned his post, physically worn out by his years in office as well as the infighting within the Mint. No doubt the discovery that Longacre had better political pull did not help matters.
Within a few weeks, the coinage of trimes began, but there were mechanical difficulties in striking so small a coin, and only 5.5 million were produced in all of 1851. The public took to the new coins like a “duck to water,” perhaps well in line with the “fish scale” nickname. They were easily lost but very practical in a marketplace where little existed between the copper cent and the gold dollar. Merchants grew tired of counting large numbers of these coins, but it was certainly better than an endless number of copper cents.
Not only were the 1851 coins heavily used by the public but many were saved as something new and different, a common event in the world of coinage. Because of this, an XF-40 specimen from the Philadelphia Mint is obtainable for about $75, while in MS-60 the tab is about $210 according to the Coin Market price guide published monthly by Numismatic News.
The year 1851 is somewhat special in the history of the trime, as it was the only year that another mint struck this denomination. New Orleans produced 720,000 of these little pieces, and the published values are not all that bad considering the low mintage. In XF-40, for example, the cost to the collector will be about $180. Demand did not prove strong in the South, however, and no more of these coins were to be struck at New Orleans.
Except for 1853, proofs were struck in most years of issue, but those before 1857 are difficult to find. The 1854, for example, has a book value of $30,000 in Proof-65, but this drops to about $1,700 for most issues after 1858.
The 5.5 million trimes struck in 1851 were distributed almost immediately, but the coin shortage continued to grow worse. The floodgates were opened in 1852, with more than 18 million pieces falling from the coining presses, and this did help the problem considerably, although the shortage was far from solved. As with the 1851, the 1852 issue is easily obtained by the collector at reasonable prices.
The experiment with debased silver coinage was watched very carefully by Mint officials and Congress. It was not long before everyone realized that the bimetallic system of coinage had to be scrapped and replaced by the single gold standard. In February 1853, a bill was enacted which did just that.
The new law provided for a continuation of the 900/1000 silver fineness but lowered the weights of the silver coins. (The trime was brought into line as it was a problem for the mints to strike coins with differing degrees of purity.) The reduction in weight for the silver was not all that much, only about 6 percent, but it was sufficient to keep the bullion dealers at bay. Had there been another surge of gold, however, the new system might have crumbled as easily as the old.
Oddly enough, the trime coinage of 1853, with 11.4 million struck, was all executed in the first three months of the year under the 1851 law and 750/1000 purity. Striking under the new law did not resume until early in 1854, when a greatly reduced coinage of under 700,000 was minted. In fact, trime coinage would remain at a relatively low level through the end of the series in 1873.
The reduced trime coinage had nothing to do with its popularity. The very heavy coinages of half dimes, dimes, quarters, and half dollars after March 1853 served to put the marketplace back to normal for silver coinage, thus eliminating the need for additional trimes. In 1855, trime mintage was only 139,000, but this climbed to more reasonable levels between 1856 and 1861.
The trime coinage of 1854 through 1858 varies slightly from the pre-1854 mintages. Longacre revised the design by adding two outlines to the obverse star where there had been none before. In 1859, this was changed once more to having only one outline. It was a change little noticed by the public. In addition, the post-1853 trime reverse has a sprig of olive above and a bundle of three arrows below the Roman numeral III.
There is some question if the trime coinage of the mid-1850s actually reflected public demand. Part of it may have been due to a loophole in the law cleverly used by Mint Director James Ross Snowden. Congress had decreed that minor silver coins could be paid out only for gold, thus assuring that just the right amount entered the marketplace.
Snowden twisted the meaning of the law to read that he could buy silver bullion with silver coin. By setting artificially high rates for silver bullion, Snowden attracted large quantities of silver to the institution.
Massive coinages of silver especially irritated merchants and bankers, who had to deal with it. There were numerous complaints to Congress and finally, in 1858, the Treasury ordered Snowden to obey both the spirit and the letter of the law. Henceforth only gold could be used to obtain silver coins; the mintages show a dramatic drop from this point in time.
The most valuable of the 1850s coins is the 1855, with only 139,000 struck. In XF-40, the book value is $175, a figure which is not approached until we reach the scarce Civil War coinage after 1862.
With the beginning of the Civil War in April 1861, it was only a matter of time before silver and gold left daily circulation and was hoarded by the public. The turn of gold came in late December 1861, while silver had to wait until June 1862. The trime was something of an odd exception to this rule, as it appears that the public still thought that this coin was debased; as a result, it was not until the fall of 1862 that the last of the trimes was seen in the marketplace.
From 1863, the coinage of trimes was limited at best. On two occasions, 1863 and 1866, mintage was slightly over 20,000 pieces, but generally they were around four to six thousand. These coins were not placed in circulation and were primarily used for settling accounts with silver bullion depositors. The post-1861 trimes can be obtained in non-proof condition but at strong prices. The book price in XF-40 averages around $800, and even then, the coins are not easy to locate.
Contemporary collectors who specialized in the trime were essentially forced after 1862 to purchase proof coins. Individual pieces could not be obtained, however, and one needed to acquire the regular “silver” proof set, which contained all of the coins from the cent to the silver dollar.
In 1865, Congress gave up on the trime and authorized the copper-nickel three-cent piece, which had an intrinsic value well under three cents and did circulate. These were issued in large numbers in 1865 and 1866 and proved very popular with the public.
In February 1873, as part of a revision of the mint laws, the trime, as well as other denominations, was abolished. It had played its part well in our monetary system, but there was no longer any need for it. Today, only the numismatist appreciates the otherwise long-forgotten “fish scale.”
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More Collecting Resources
• The 1800s were a time of change for many, including in coin production. See how coin designs grew during the time period in the Standard Catalog of World Coins, 1801-1900 .
• Keep up to date on prices for Canada, United States and Mexico coinage with the 2018 North American Coins & Prices guide.
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