The United States Nickel

Although a fact little known to modern-day collectors, the U.S. “nickel” (5-cent piece) is a direct result of the American Civil War of 1861-1865. Before that time, there was a 5-cent coin, but it was made of silver and called a half dime. However, in the summer of 1862, a nervous public hoarded all available silver coins, and the Union government of President Abraham Lincoln was forced to issue paper money in denominations as low as 3 cents.

By 1863, even the lowly copper-nickel cent was under attack by hoarders, and citizens began to lay aside these coins as well. In April 1864, the government threw in the towel and began making cent and 2-cent pieces from bronze, which was less costly than nickel and the metals easier to obtain.

The 1864 law had been passed over strong opposition from Joseph Wharton and his friends in Congress. Wharton owned a nickel mine in Pennsylvania and thought that he should be selling his metal to the government for its coinage. The change to bronze for the cent and 2-cent pieces meant that he would now sell no nickel to the Mint.

In 1865, as the war was winding down, Wharton’s legislative allies went on the offensive. Congress passed a bill authorizing a 3-cent piece of copper nickel, and it was duly signed by President Lincoln. Everyone realized that it was little better than a subsidy to Wharton, but the country was so desperate for small change that this coin was welcomed by the public. The new coin was so popular, in fact, that it was soon called simply a “nickel.”

Although silver half dimes were still being struck by the Philadelphia and San Francisco Mints, they actually circulated only on the West Coast, and the public was still demanding additional coins. The “shinplasters” (fractional notes worth less than a dollar) were very unpopular with ordinary citizens and storekeepers alike.

Taking advantage of this demand by the public, the Wharton forces returned in the spring of 1866 with a new copper-nickel coin, this time for 5 cents. Lip service was paid to the metric system, as each coin was to weigh exactly 5 grams, but the point was another coin using nickel. The public took to this coin even more than the copper-nickel 3-cent piece, and the 5-cent pieces were soon being called “nickels,” as they have been since that time.

Mint Director James Pollock was a strong opponent of the new coin and had struggled in vain to defeat the bill in Congress. The best that he was able to do was get an informal understanding that the half dime would again be struck in quantity once the financial crisis had passed; copper-nickel coinage would then be abandoned. Of course, we now know that the exact opposite happened: the half dime itself was abolished in 1873.

Pollock was also a realist, and in the last days of 1865 and early 1866, Chief Engraver James B. Longacre was at work preparing possible designs for the new 5-cent coin that all knew would soon be on the books. Obverse portraits included George Washington and Abraham Lincoln, but in the end, Pollock opted for a design similar to that on the 2-cent piece.

The new nickels, as first struck on June 11, 1866, used a design by Chief Engraver James B. Longacre. On the obverse is found the American shield surmounted by a cross, while the reverse has the numeral “5” inside an arrangement of stars and bars.

It was soon found that die breakage for the new coin was excessive (nickel is a very difficult metal to use in coinage), and discussions were held in an effort to alleviate the problem. Finally, in the latter part of 1866, it was decided to try a new reverse design in which the bars would be eliminated. Tests were made, and die life appeared to improve. In February 1867, the changeover was made by permission of Treasury Secretary Hugh McCulloch.

Some members of the public thought that the reverse design looked something like an exploding shell (an unpleasant reminder of the late war), while others saw the stars and bars of the Confederacy. Neither was true, and the elimination of the bars in 1867 put an end to such rumors.

Die life did improve, although not as much as had been hoped. Before February 1867, a pair of nickel dies produced less than 10,000 good coins, while afterward, the average increased to perhaps 10,000 or 12,000. Excessive die breakage was a problem throughout the life of the Shield nickel.

The die breakage problem, both before and after February 1867, can be seen by the collector. It was difficult for the engraving department to supply enough dies, and Chief Coiner A. Loudon Snowden was forced to use dies that were cracked or otherwise damaged.

Although initial coinage in the 1860s was quite heavy, the resumption of silver coinage for the public from the spring of 1873 lessened the need for nickels, and by late 1876 very few were being minted. In 1877 and 1878, only proofs were struck for collectors, making these two dates among the most difficult to find of the entire nickel series.

We think today that the nickel does not have much purchasing power, but in the 1870s, this was not the case. Proof of this is seen in the fact that the nickel was heavily counterfeited in the late 1860s and early 1870s by criminals based mostly in New York City.

Shield nickels continued to be struck through 1883, but there was increasing dissatisfaction with the design, especially among Mint officers. In particular, Philadelphia Mint Superintendent A. Loudon Snowden decided to do something about the problem. In 1881, he ordered Chief Engraver William Barber to prepare a series of pattern coins, to be made of copper-nickel, for the cent, 3-cent, and 5-cent pieces. The first two were soon forgotten, but the last was not.

At the same time that the patterns were being prepared, the coining department experimented with 5-cent dies and planchets of a slightly larger size to see if that would help die life. It did so dramatically.

By late 1882, Snowden had given up on changes for the cent and 3-cent pieces but not the nickel. He submitted his favorite pattern to Treasury Secretary Charles J. Folger and received the first of several shocks over the new design and coinage. Folger refused to approve the pattern because it did not conform to the law: the words “UNITED STATES OF AMERICA” were on the wrong side.

Folger was adamant despite Snowden’s appeals, and the coin had to be redesigned. Finally, at the end of January 1883, regular coinage of the new Barber design (called the V–nickel by modern collectors) began. The diameter was slightly larger than that of the Shield nickel. These first pieces did not carry the word “CENTS,” but this was not a mistake as later claimed. The 3-cent piece, introduced in 1865, did not carry this word, either.

Within weeks, the new design was a matter of national controversy despite its initial acceptance by the public. A few less-than-honest people gold-plated the new coins and passed them off to unsuspecting shopkeepers as half eagles ($5 gold pieces). The amount of this fraud was very slight, but the newspapers of the day, especially those opposed to President Chester Arthur, played the story for all that it was worth.

Once the story had been published, of course, everyone examined their coins with great care, but the damage had been done. President Arthur ordered that the design be changed at once to include the word “CENTS.” Chief Engraver William Barber soon prepared pattern dies with this in mind.

The final (revised) reverse design was somewhat cluttered, but there was little choice. Coinage of the new nickels began in late March 1883. For some reason, the public believed that the “centless” nickels, as they were called, would be valuable in the future, and a great many of these coins were laid aside by ordinary citizens. Even today, because of this widespread hoarding in 1883-1884, the collector can obtain the centless variety in nice condition for a nominal sum.

Oddly enough, just when Snowden thought that he had weathered the latest storm, another controversy arose. Certain collectors and coin dealers tried to corner the market for 1883 Shield nickel proof coins and were charging high prices to those wishing for a complete set of proof nickels for the year. Snowden persuaded the Treasury to let him strike all three designs in proof for the rest of 1883. Permission was granted, and Snowden thus out-foxed the scalpers. It also made these coins more affordable to modern collectors.

Snowden has been criticized, and perhaps rightfully so, for striking special coins for his collection, but there is another side to the matter. He believed that the collector of limited means ought to be able to obtain United States coins, both proof and uncirculated, and the striking of all three nickel designs in proof for the entire year is a good example of this.

The revised design was struck until 1912 without the controversy that had accompanied its birth in February 1883. In fact, for modern numismatists, V-nickels dated after 1900 are quite common and easily obtained. The most interesting feature of the late regular coinage of this design is that Denver and San Francisco began to strike nickels in 1912. The 1912-S is a somewhat scarce coin, but the Denver issue is fairly common.

Perhaps under the old rule that one good controversy deserves another, the Treasury Department now decided to change the nickel design. By the summer of 1912, sculptor James Earle Fraser was well advanced with new artwork, featuring an Native American profile on the obverse and buffalo (bison) on the reverse.

All was proceeding as planned until a vending machine manufacturer learned of the new design and raised a series of objections. The company argued that the new coin would not operate properly in their machines, a claim of doubtful validity. The artist was forced to make several minor changes, but the arguments grew so unpleasant that the Treasury finally ordered an end to the alterations and decided that enough was enough and ordered that coinage begin.

In the meantime, one or more employees of the Philadelphia Mint had found out, towards the end of December 1912, that the V-nickel would not be coined in 1913. One man thought to be Samuel W. Brown, organized a clandestine effort to strike a handful of 1913 nickels using the old design. Five pieces were actually struck and spirited out of the Mint. They surfaced in 1919 and were purchased by the famous collector, Colonel Edward H.R. Green.

(Green was the son of Hetty Green, the brilliant Wall Street investor. She was widely hated by her male counterparts for the simple reason that she was much better at buying and selling stocks than they were.)

By an odd coincidence, the reverse of the new Buffalo nickel was also redesigned in its first year of coinage, as had been the case for the V-nickel. The 1913 alterations were not the result of controversy but rather worry about how the reverse would wear in circulation.

Chief Engraver Charles Barber lowered part of the reverse design below the buffalo. There was apparently official concern about the denomination (“FIVE CENTS”), but no one was worried about the date on the obverse, which wore off much too quickly compared to the rest of the design.

Because of World War I, coinage was very heavy from 1917 through 1920. In the early 1920s, mintage declined for two reasons: too many nickels had been struck in the war-time years, and the new silver dollar mintages beginning in 1921 meant that fewer coining presses were available for minor coins.

One coin that has always interested collectors is the 1937–D nickel with the three-legged buffalo. The reverse die was overly polished by a workman, resulting in a widely sought-after coin.

The Buffalo nickel served the marketplace well until the late 1930s, when the Treasury, at the request of President Franklin Roosevelt, once more decided to replace the design. Although officially, the new artwork – Thomas Jefferson on the obverse and his home (Monticello) on the reverse – was non-political, this was hardly the case.

Abraham Lincoln had been honored by President Theodore Roosevelt in 1908, an event ushering in the modern use of portraits on the coinage. President Franklin Roosevelt took advantage of this precedent by placing Jefferson, considered the founder of the modern Democrat party, on the 5-cent piece.

The new Jefferson nickel also marks an interesting experiment by the Treasury: there was a national contest among sculptors and artists to create a winning design. Felix Schlag won the contest but was forced to alter his reverse view of Monticello because it did not quite fit official ideas.

Unlike the preceding three designs for the nickel, no real changes came to the Jefferson coinage until the outbreak of World War II. In 1942, because of the war effort and the need for critical metals, however, the composition was changed to eliminate nickel and replace it with manganese and silver. Mint engravers added a large mintmark over Monticello so that the public could distinguish easily between the silver war nickels and the regular copper-nickel alloy. In 1946, the old alloy was resumed and has not been changed since that time.

Since 1946, the nickel has been struck on a regular basis. There are no rare dates, although some special proof pieces are scarcer than others. One exception is the 1971-proof coin in which the letter “S” was accidentally omitted.

In 2004 and 2005, special designs were used on the nickel in honor of the Lewis & Clark Expedition a century earlier. President Jefferson was responsible for the trip to the Pacific Ocean by this intrepid band, hence the special work.

In 2005, another change was made, this time portraying Jefferson in a facing view as opposed to the profile used since 1938.

For some years, it has been known that it costs the Treasury about ten cents to produce each nickel coin. In due course, there will likely be a change to a cheaper alloy, but at present, there is no knowledge as to when or if this will happen.