[The following excerpt is published courtesy of DLRC Press and its author, Gloria Peters & Cynthia Mohon. This information was originally published in 1995 in The Complete Guide to Shield and Liberty Head Nickels
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History of the Shield Nickel Series
The Shield nickel, first minted 1866, a year after the Civil War ended, was originally intended as a short-term solution to the lack of small change in the war-torn nation. But it became the first in a line of 5-cent nickel pieces still in use today and an integral part of the American coinage.
During the Civil War both the Union and the Confederacy printed huge quantities of non-specie backed currency. The flood of paper money and high levels of inflation greatly stimulated the hoarding of metallic money, creating a dearth of coinage for daily business activity. After the cease-fire, the Treasury turned its attention to modifying the monetary system.
The Law of 1864 indirectly provided impetus for the first copper-nickel 5-cent coin by introducing a change in philosophy toward minor coinage. Prior to 1864 it was governmental policy that the intrinsic value of the coin should approach the face value. With the 1864 law it was clear that the government not only wanted to make a profit with its minor coins but, also, wanted to have a circulating coin of base metal that would not be hoarded. The success of the new bronze cents and 2-cent coinage created interest within Congress for other denominations.
A huge production of 3-cent fractional currency was fodder for the politically powerful nickel ore interests. They argued the need for a 3-cent nickel alloy coin to be used for redemption of the paper notes. On March 3, 1865, a law providing for a 3-cent coin of 75-25 copper/nickel alloy was passed. Oddly enough, this produced a situation where the country had two different 3-cent coins in production at the same time since the silver 3-cent piece was not discontinued until 1873. These silver pieces were being hoarded or melted, and their absence from the marketplace was part of the argument for a base metal coinage.
Joseph Wharton’s influential nickel ore contingency, encouraged by their success with the 3-cent nickel coin and the fact the silver half dime was not circulating sufficiently, pressured Mint officials and Congress for the copper-nickel alloy 5- cent coin. Mint Director James Pollock was not a fan of the nickel alloy even though he was an ex-governor of Pennsylvania, where the Wharton nickel mines were located. With the intention of re-establishing silver coinage as soon as economic times permitted, Pollock reluctantly supported the nickel alloy. Scientists wanted the metric system adopted in the U.S.
They asked that the coin be 5 grams and exactly 20 millimeters in diameter so that it could be used as an “exact weight in metric trade activities.”
These factors, as well as the public’s genuine need for more metal coinage, resulted in President Andrew Johnson signing into law on May 16, 1866 authorization for the new copper- nickel 5-cent piece. The nickel was to be 77.16 grains in weight, composed of 75% copper and 25% nickel. The nickel was made legal tender up to $1, and was to be paid out in exchange for lawful currency of the United States (except cents, half-cents or 2-cent pieces). Redemption was to be in sums of not less than $100. The Act also banned the issue of fractional paper money of less than a 10¢ denomination.
As the coinage was to begin as soon as possible, pressure fell upon Chief Engraver James B. Longacre to produce designs for the new coins. Longacre led his offerings with an adaptation of the 2-cent design. It altered the location of the two arrows, removed the furled banner upon which the motto was inscribed, and added a cross (Pattee) to the top of the shield. The reverse design was a large 5 encircled by alternating rays (3 in each cluster) and 13 stars surrounded by the legend UNITED STATES OF AMERICA with CENTS at the bottom. The rim was denticled on both sides and the edge was plain.
Longacre also prepared other varieties of obverses, with a set of designs that were variations of a bust of Washington, and one pattern with a bust of Lincoln. The source of the Washington designs is believed to an earlier pattern that Longacre had prepared for the 1863 2-cent patterns. A similar bust of Washington was used as a medalette struck by the Mint. The Lincoln bust is believed to be an adaptation of a design by Anthony C. Paquet, used on some dime-sized medalettes struck by the Mint during the Civil War. Reverse designs included different sizes and typestyles of the numeral 5 surrounded by various models of a laurel wreath with different sizes and spacing of the legend. Judd lists a number of pattern strikes and mulings from these dies, possibly struck for collectors and friends of the Mint staff.
Treasury Secretary Hugh McCulloch selected the Shield design, partly because it was favored by Mint Director Pollock. The Lincoln head was not sent to McCulloch because Pollock did not believe the design would be well received in the South. Interestingly, after the release of the Shield Nickel with Rays in 1866, there were allegations against Longacre of Southern sympathies due to the “Stars and Bars” on the coin’s reverse design.
When production began, it became clear to the Mint staff that the new nickel coin was going to be very difficult to produce. Chief Coiner A. Loudon Snowden had backstocked a large number of planchets but Longacre had difficulty providing enough dies. Also, there were difficulties in annealing the planchets to a softness suited to the minting process and the dies deteriorated quickly. For this reason, die and strike varieties are common in the early Shield nickel series.
Despite the difficulties, demand for the coinage primarily from the North caused the Mint to produce about 2 million coins a month by the end of 1866. Die destruction in the process was amazing. R. W. Julian reports that “the average number of 5- cent coins from each pair of dies was well under 15,000. Assuming this to be correct…the engraving department would have made about 2,000 dies for just this one denomination alone in the last seven months of 1866.” Clearly, quality and production suffered badly during this period. But the business community did not seem to notice the poor quality of the coins. Only the ever vigilant numismatic community complained about the coins and the design. One proponent of the cupro-nickel alloy, Joseph Wharton, called the coin’s obverse design “a tombstone surmounted by a cross overhung by weeping willows,” and he called it “the ugliest of all known coins.” (Breen)
Late in 1866, a conference between Chief Coiner Snowden and Chief Engraver Longacre resulted in a plan to re-design the reverse due to metal flow problems. Pattern pieces without rays were produced and shown to Treasury Secretary McCulloch, who approved the change on January 21, 1867; and the new dies were apparently implemented in February 1867. R.W. Julian estimates the number of 1867 Shield-Rays as approximately 2,019,000, the number coined in January 1867. The remaining year’s mintage of 28,890,500 was 1867 Shield- No Rays. The new design increased die life but die varieties due to date repunching and die deterioration continued throughout the series.
Dissatisfaction with the 5-cent minor coins continued even though the die life increased to about 20,000 pieces. Further pattern testing was done with aluminum; however, this metal was not in favor with Linderman. Joseph Wharton had an extensive following in Congress, and his argument that nickel was primarily mined in the Americas, while aluminum was an European import, carried the day.
Wishing to increase his market share, Wharton encouraged a campaign by Congressman Kelley of Pennsylvania for a uniform series of 1, 3, 5 and 10-cent denominations. Mint Director Linderman, possibly thirsting for more pattern coins for his collection, encouraged Longacre to make the new pattern pieces and trial strikes as soon as possible. However, Chief Coiner Snowden was unable to strike the 10-cent copper/nickel patterns due to their size and weight, which was greater than the presses could handle. Instead, the trial 10-cent piece was struck on copper. James Pollock replaced Linderman in the midst of this experimentation and ordered a cessation to the copper/nickel pattern testing.
The pressing need for the 5-cent coins was essentially fulfilled by late 1869, and the mintage dropped drastically from 16,395,000 that year to 4,806,000 in 1870 and to 561,000 in 1871.
The Coinage Act of 1873 continued the authorization of three and five cent copper-nickel coins and added a one cent piece of the same material. This base metal coinage was made redeemable in lawful money in sums of fifty dollars and was legal tender in sums of twenty cents in any one payment. The cent coin was 1.5 grams in weight, heavier and larger than the silver half dime which was discontinued in conjunction with the 3-cent silver. The copper and bronze coins authorized in earlier years were exchangeable for the copper-nickel coins. It was the legislature’s hope that the discontinuance of the subsidiary half-dimes and 3-cent silver coins plus the replacement of the copper and bronze coins would cause those coins to pass out of circulation leaving a minor coinage of one material and uniform value.
“A suggestion was made to authorize the issue of but a single coin in addition to the gold and silver coinage now in existence, that piece to be one cent, into which all other base-metal coins shall be exchangeable; but the present copper-nickel coins are convenient and popular and it was not thought best to withdraw them, but to provide for their redemption and the discontinuance of the issue when redundant.” (Mint Director’s Report 1896)
It was not until 1933 that the nickel was made legal tender without restrictions; and the copper-nickel coins remain “convenient and popular” over a century later.
Although the 5-cent piece was well-liked in the North, it remained unpopular in the West, where the half-dimes were in circulation and preferred. Half-dimes were discontinued in 1873 and by 1900 the nickel was widely accepted everywhere. It has continued to be an important coin ever since.