Three-Cent Nickel, 1865-1889 | CoinWeek

By Charles Morgan and Hubert Walker for CoinWeek Notes …..
 

The Three-Cent Nickel was an unusual coin denomination with an unusual history. It was first proposed in 1851 as a medium of exchange for postage stamps, which had been lowered in price from five to three cents. Congress thought merchants would not be eager to accept copper coinage in exchange for stamps, and small foreign silver coins, while still legal tender, did not flow through commerce as routinely as they once did. To answer the need, Congress authorized the production of a small three-cent billon coin made of .750 fine silver.

Three-Cent Silver coins were first issued in 1851 and were modified in 1854 to a fineness of .900, which was made possible by slightly lessening their weight. These Three-Cent Silver coins were struck in the millions in their first few years of issue before demand slowed to the point where the Philadelphia Mint would strike only a few hundred thousand per year after that. The Civil War threw all of America’s coinage into crisis; precious metal coins went into hiding, and by the height of the war, the American economy subsisted on fiat currency and promissory notes.

The Three-Cent Nickel Is Born

In 1864, United States Treasury Secretary Salmon P. Chase proposed another three-cent coin to retire the fractional currency issued during the war.

Although there had been long-standing opposition in Congress to introducing nickel into American coins, the necessity of finding alternative metals for currency broke down even the staunchest anti-nickel opponents. Representative John A. Kasson (R-IA5), one of the most vocal nickel opponents, introduced the bill authorizing the striking of a new Three-Cent Nickel. The composition of the Three-Cent Nickel was three-quarters copper and one-quarter nickel. Kasson’s bill passed after an all-night session on Capitol Hill on March 3, 1865, and the Three-Cent Nickel coin was born.

Chief Engraver James Barton Longacre created the design for the new coin. An accomplished portrait painter, Longacre landed the job as the United States Mint Chief Engraver through political connections despite having very limited engraving experience. Despite this and the criticism that some of his coins had a dull, two-dimensional quality, Longacre is responsible for some of the 19th century’s most iconic designs, including the Indian Head Cent, the Gold Dollar, the Three-Dollar Gold Coin, and the Liberty Head Double Eagle.

Circulating History of the Three-Cent Nickel

The Three-Cent Nickel was never intended as a permanent denomination. The United States issued it merely as a stopgap until wartime hoarding ceased and most of the fractional notes had been redeemed. However, the coin’s production continued until 1889, 16 years after the Three-Cent Silver was discontinued.

By the mid-1870s, the Mint faced a glut of Three-Cent Nickel returns and suspended coinage of the denomination for circulation in 1877 and 1878. A trickle of business strikes were minted in 1879 and 1880 before the Three-Cent Nickel saw its final million-coin emission in 1881. From 1882 onward, the Three-Cent Nickel was produced in extremely limited quantities, with more examples struck in Proof format than for commercial use.

On February 13, 1889, the United States Assay Commission filed its report with Congress and proposed that the legislative body eliminate the Three-Cent Nickel, along with the Gold Dollar and Gold Three-Dollar coins, citing their lack of utility in circulation and ongoing speculation in the low-mintage issues. Congress agreed and suspended the coinage of all three denominations by passing the Coinage Act of September 26, 1890.

After the denomination was discontinued, millions of Three-Cent Nickels were returned to the Mint, melted down, and recoined as Liberty Head Nickels.

Collecting the Three-Cent Nickel

From 1865 until 1889, 31,378,826 Three-Cent Nickels were struck. Today, the coin is of most interest to type collectors, those in the hobby involved in the pursuit of amassing one of every American coin type ever made. Type coin collectors most frequently purchase the 1865 Three-Cent Nickel, the cheapest coin in the series, which boasts a mintage of 11,382,000. This date remains affordable even in Mint State.

Those seeking a “better date” example should look to 1877 and 1878. During these two years, the coins minted were Proof-only and did not enter general circulation. Only 510 Three-Cent Nickels were struck in 1877, and 2,350 coins were minted in 1878.

Other interesting years are 1884 and 1885. These dates have very low business strike mintages and are scarce in Mint State.

Many Three-Cent Nickels exhibit die clashing and just as many are weakly struck. Weakness is typically seen on the reverse where the diagonal lines of the Roman numeral III are completely washed out (as in flattened). On the obverse, weakness is clearly visible in the hair detail, again around the center of the coin.

Three-Cent Nickel Date-by-Date Analysis by CoinWeek Notes

• 1866 Three-Cent Nickel
• 1866 Three-Cent Nickel (Proof)

Extended Coverage on CoinWeek

• Collecting Three-Cent Nickels

CoinWeek contributor Greg Reynolds offers his advice on collecting the strange denomination.

• Classic U.S. Coins for Less Than $500 Each: Three-Cent Nickels

Here, Greg continues his column on collecting classic U.S. coins on a budget with a discussion of the series.

• Counterfeit Coin Detection: Spark-Erosion 1874 Three Cent Nickel Die Trial

NGC offers a brief explanation on detecting a spark-erosion counterfeit of the 1874 Three-Cent Nickel trial.

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Design

Obverse:

The obverse features a left-facing head of Liberty. Liberty wears a pointed diadem inscribed with the word LIBERTY. Surrounding the head is the legend UNITED STATES OF AMERICA. The date appears at the bottom. The coin has a denticled border and a raised rim.

Reverse:

A large Roman numeral III dominates the reverse of the design. A closed wreath surrounds this figure.

Three-Cent Nickel Coin Specifications

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