The 5-Cent Piece, 1853-1873
When average citizens are asked about the most common coin used today, they are likely to say the quarter-dollar and with good reason. If the same question had been asked in the United States between the 1830s and the 1940s, the answer could well have been the 5-cent piece. Yet the answer would have meant two different coins, depending upon just when the question was asked. It all began in the late 1820s. The original 1792 mint law had mandated the coinage of silver half dimes, but very few of them were actually made in the early years because the Spanish half real, worth 6.25 cents, was common in this country and was very close in value to the half dime.
Because of the low demand, half dime coinage was in fact suspended in October 1805. In 1820, Mint Director Robert Patterson considered resuming such coinage but the idea was then shelved for some years.
In popular terminology, the half real was called a half bit, the bit being the public nickname for the Spanish piece of 1 real. One wonders if there is anyone who has not heard cheerleaders yelling “Two bits, four bits, six bits, a dollar, all for [name of team], stand up and holler?”
By the late 1820s, the ready supply of the imported half reals had finally begun to dry up; merchants and banks then asked the Mint to resume the coinage of half dimes. In 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 marketplaces to be used. As the smallest silver coin, it still carried “weight” with the ordinary citizen because it was not one of the large copper cents and had real purchasing power. Coinage remained reasonably heavy throughout the 1840s, with the half dime retaining its position as a very popular coin.
The 1848 discovery of gold in California, and soon afterwards in Australia, was to upset the world’s delicate monetary arrangements and nowhere more so than in the United States. Bullion dealers bought up silver coins and either shipped them to Europe or melted them into ingots. By early in 1850, little silver was in circulation.
It was not until 1851 that Congress partially solved the problem, with the introduction of a debased silver 3-cent piece, but 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, but only in exchange for gold coins.
Throughout the 1850s, 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 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 have little trouble or expense in doing so. In VF-20, certainly an acceptable grade for most collections, about $40 will buy one of several different date and mintmark combinations. Half dimes struck from 1853 to 1855 have arrows at the date, indicating that they are of a reduced weight from those coins 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 dates, but one wonders why it took so long to do so. The public in the 1850s looked at their coins very carefully compared to the citizens of today. One would think that nearly everyone knew why the arrows were there when such coins were first issued in the spring of 1853. The newspapers had carried the story on many occasions. The Philadelphia Mint reduced the number of silver coins struck after 1857 because 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 at the Philadelphia Mint and simply paid out silver coins for silver bullion at an artificially high rate, though the government still made a reasonable profit.
The result of Snowden’s flouting of the law was a massive coinage at Philadelphia from 1853 to 1858 of all silver denominations, trime (3 cents) through half dollar. The coinage of silver for 1859 shows quite clearly the effect of the Treasury edict: drastically smaller numbers of coins made. The 1858 combined mintage of half dimes, Philadelphia and New Orleans, was more than 5 million pieces, but in 1859 this total was only 900,000. In 1859, irritated because he had to cut back on 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 brought from the back of the coin to the front, and the reverse wreath enlarged to fill the space where the legend had been.
One of the oddities of the revised design was that it was illegal under the governing mint act that was enacted by Congress in January 1837. The legend “UNITED STATES OF AMERICA” was to be on the reverse, not the obverse. It would appear that no one in 1859 or 1860 had bothered to actually read the law. Coinage of half dimes was up sharply in 1860 compared to 1859, but it is hardly likely that Snowden’s facelift had anything to do with this. The gathering storm clouds of the Civil War, coupled with a strong resurgence of the economy after a meltdown in 1857, meant that far 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 mintages 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 perhaps the commonest of the three and is worth only about $55 in XF-40. The serious collector should not buy an 1861 in a lesser grade; the price is simply too affordable.
The outbreak of war in April 1861 caused everyone in the South to hoard the gold and silver coins within a matter of weeks. In the North, there were so many people certain that victory was just “a few weeks away” that gold was not hoarded until December 1861 and silver in June 1862. Both events were sudden and complete.
Most of the problem for the silver was in 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 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 an end of regular coinage in this metal at the Philadelphia Mint. Through 1867, Philadelphia did not coin more than 50,000 half dimes in any one year.
The half dimes of 1861-1862 were not all meant for public use. In the early months of the war, Union army foragers used both gold and silver coins to pay for needed food and other supplies. This usage died out after June 1862, however, when silver coins were hoarded in the Northern states.
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 were used freely in California and paper but little. The Philadelphia half dimes of 1864 were long considered a numismatic oddity. The tables of coinage showed that only 470 proofs were struck, yet there existed a small number of pieces that were clearly 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 proof of this. By 1863, Northern marketplaces were in a desperate position. The country had
been flooded with government paper money, some of it as low as 3 cents in value (the so-called “shinplasters”) as well as private tokens for 1 cent. The silver coinage, except on the West Coast, was not circulating and complaints poured into the government and Congress 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. This proposition was fought by Joseph Wharton, who owned a nickel mine in Pennsylvania and had a vested interest in nickel coinage whether it circulated or not. For over a year, there was a stalemate. In March 1864, there was an abrupt about- face by the Lincoln Administration, who until now had stood on the sidelines of the coinage arguments. 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 cents and 2-cent pieces; the latter coin had also been suggested by Pollock. There were mass coinages of these two coins, which went a long ways towards a measure of circulating coins for the marketplaces.
As can be imagined, Wharton was furious at this setback to his lucrative nickel business and made plans for a comeback. In March 1865, the Wharton forces persuaded Congress to authorize a 3-cent piece made out of copper-nickel. The administration did not interfere, even though it knew why the coin was mandated, because the country needed more coins. In 1865 alone, more than 11 million of these new coins were made. Like the Flying Eagle and Indian Head cents of 1857-1864, these too were called “nickels” because of the metal contained in them.
Not enough of his nickel was being sold to the Mint (which also purchased supplies abroad), and in the spring of 1866 Wharton came to the well once more, this time persuading Congress to create a 5-cent piece of copper-nickel. In the guise of going metric, the new coin was to weigh exactly 5 grams, proportionally much heavier than the 3-cent nickel.
The new 5-cent coin proved immensely popular with the public, and the last half of 1866 saw nearly 15 million coined. For 1867, the coinage was even greater, reaching 30 million. In 1868, nearly 29 million of them were struck. Clearly the public had taken a fancy to this coin, which was equal in value to the treasured half dime of the past.
A few months before the first coppernickel 5-cent piece was issued (June 1866), there was an odd interlude with the fractional paper currency. The Treasury had ordered that the portrait of William Clark (of Lewis and Clark fame) be placed on a new 5-cent fractional note. The chief of the government printing bureau, Spencer Clark, put his own portrait there instead. As to be expected, there was an uproar in Congress and the printing of 5-cent notes was forbidden after the spring of 1866.
At the beginning of February 1867, the design of the new Shield nickel was modified by removing 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 1880s that die life improved significantly.
Mint Director Pollock disliked the new nickels and much preferred the old half dimes. In league with the Treasury Department, large numbers of dimes and half dimes were struck at the Philadelphia Mint during the late 1860s and early 1870s in an effort to put them into circulation. This first attempt to put silver back into use was a failure 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 used by the public, which quickly grew to love the coin. The half dime had begun to drop from public memory, as if 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 Grant, who assumed office in early 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 outgunned by supporters of the copper-nickel 5-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 mint bill came before Congress, and the fate of the half dime was sealed: along with the trime and 2-cent piece, it was abolished as a denomination. The “nickel” was now the only 5-cent coin legally struck by the Mint.
The demise of the half dime, in part, was a compromise between the Wharton forces pushing nickel for coinage and the mining interests who wanted additional silver coinage. The Trade dollar thus was one of the trade-offs for the abolition of the half dime. Director Pollock had lost the battle, and only the collector is now left to appreciate the beauty that once was the half dime.