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Nickel three-cent born in Civil War shortage

There are many interesting coins of the United States and some are not well-known. That list would have to include the copper-nickel three-cent piece, which at least for a brief time was a very important coin in circulation. Of course, that was almost 150 years ago and since no one alive today has received a copper-nickel three-cent piece in change, the coin has been out of sight and out of mind for a long time.

There is, however, a real advantage to you today in a denomination that has not been a regular issue for well over a century. That usually means demand is low, which makes the values far better than would normally be expected. It does not mean you can expect to retire off the profits of a copper-nickel three-cent piece collection, but it does mean you can expect you are getting an interesting coin and a good value for your money and that makes an excellent combination.

While it is no longer possible to go to the bank and obtain a nice new original roll of copper-nickel three-cent pieces that does not mean that they are not interesting. It simply means that to find them you will have to contact your favorite coin dealer for assistance.

There are just 25 dates in the set, which makes it a reasonable one even with the three proof-only issues. It is a set that nearly everyone can aspire to own in MS-60. The only caveat is that most collectors could not buy all of the coins in any single year.

If you look at it as a 10-year project, it almost looks cheap. You would have to work with a budget of about $1,200 a year, and save up for several of the years to buy the 1877 proof for $3,750.
It is not hard, but it does take the will to undertake collecting the set.

The story of the nickel three-cent coins starts during the Civil War. Because of the coin shortage brought about by the hoarding of gold and silver coins, the copper-nickel three-cent piece was introduced in 1865 as an emergency issue.

In fact, the copper-nickel three-cent piece was a substitute for the silver three-cent pieces that stretched back to 1851. It was no accident that the three-cent piece seemed to have its greatest acceptance at times of crisis.

Unlike the two-cent piece introduced in 1864, the three-cent piece seemed to have no track record of being suggested over the years.

The two-cent piece idea traces all the way back to 1806. (See the full story in the Jan. 26 issue), The Mint’s lack of capacity for the designs already authorized would delay the two-cent denomination until 1864.

There would be patterns for a two-cent piece in the 1830s, but there were no such indications that anyone ever had the slightest interest in a three-cent piece. That interest emerged from a House of Representatives committee that was examining possible new denominations at about the time the first real impact of the gold discovery in California was being felt. The California gold would upset the traditional gold-to-silver ratio causing the cost to produce a silver coin to rise above the coin’s face value.

The Congress at the time considered a number of options, including a two- and-one-half-cent piece, which sounds odd, but actually had some interest. It has to be remembered that at the time the nation was still using Spanish silver issues the smallest of which was called the “bit,” which was valued at 12.5 cents.

Making change for a bit required a half cent, which was sometimes available and sometimes not, opening up the possibility of a 2.5-cent alternative.

 Congress went for a three-cent piece, instead, perhaps at least partially because the goal was to eliminate the foreign coins and to make it easier to change things like “bits” might only extend their time in circulation.

The three-cent piece was approved as a stopgap measure. At 75 percent silver it was designed to circulate at a time when other silver coins could not. Realistically, the Congress needed to reduce the amount of silver in regular issues, but stalled on taking that step until 1853. In truth, the 75-percent silver could be called a debased issue, but with no silver coins circulating at the time, the public was willing to accept it simply to have some help in making change.

When the Congress did take the step of reducing silver, the three-cent piece was reduced slightly in size but increased to 90 percent silver in 1854. Ultimately that made the silver three-cent piece part of the problem during the Civil War and not part of the solution.

The hoarding in 1851 had been driven by economic factors but the hoarding that began in the early 1860s was driven by fear and that made it even more serious. People were hoarding virtually everything. Even the 75 percent silver three-cent piece would disappear and the same was true with copper-nickel Indian Head cents. Officials could not explain it and they could not stop it, leaving the country to make change with encased postage stamps, tokens and eventually Fractional Currency.

The public did not like any of the solutions, but there were no options in the early 1860s in terms of coins. Officials began meeting to determine changes that might allow the coins to circulate. The first step was to change the composition of the Indian Head cent to bronze to match the tokens merchants issued as a private form of change and that was joined by an authorization of a two-cent piece also of bronze.

But changing the copper-nickel composition of the cent did not go over well with Joseph Wharton, who was a truly interesting character at the time. There is reason to question whether there would ever have been a copper-nickel three-cent piece were it not for Wharton. He owned the nation’s only nickel mine in Lancaster Gap, Pa. He had become something of a one-man lobby for the use of nickel. It was not unknown at the time as Western mine owners, banks and others had been busy trying to get new gold denominations throughout the late 1840s and 1850s.

Wharton was a regular in the halls of Congress and over the years he made important friends. The key proved to be Rep. Kasson who chaired the House coinage comittee and he was able to push through legislation calling for a 75 percent copper and 25 percent nickel three-cent piece that would be followed by a five-cent piece of the same composition.

The new 1865 copper-nickel three-cent piece was rushed into production. Apparently the Mint had some problems with the alloy but this kind of problem was most apparent on the Shield nickel, which would follow in 1866.

The design of the copper-nickel three-cent piece was simple enough. It was probably an easier coin to produce than the Shield nickel. That said, the later dates of the copper-nickel three-cent piece tend to be better struck than the earlier ones, although that may be only partially because of the alloy as at the time the Mint was producing coins as fast as possible and that frequently resulted in lower quality.

The first year of production saw a mintage of 11,382,000 pieces. That showed the urgency as at the same time there were still silver three-cent pieces being produced, but they would not circulate. The idea was to get as many copper-nickel three-cent pieces in production and then into the hands of the public as possible. For Wharton, who would later be remembered for founding the Wharton School of Economics at the University of Pennsylvania, it was a step in the right direction.

As the copper-nickel three-cent pieces poured out into circulation it created an interesting situation. There were potentially silver three-cent pieces in the hands of the public, although not in circulation ,and there were also three-cent Fractional Currency notes. Considering there had been no three-cent coins or notes at all just 15 years earlier, it was definitely a significant change.

The arrival of the copper-nickel three-cent piece certainly played a role in dooming the silver version, which had a mintage of just 8,500 in 1865 and many also suggest that it spelled trouble for the new two-cent piece as well. It was also the end, which was welcomed by the public, for the Fractional Currency three-cent note.

Ironically, however, the copper-nickel three-cent piece was in turn doomed by the first Shield nickel.

Such impacts of the various new issues were not readily apparent in 1865. The real goal was simply getting enough coins out into circulation to allow for something vaguely resembling normal commerce.

The mintages of the copper-nickel three-cent piece would, however, begin to drop. In 1866 the mintage was 4,801,000 and the 1867 total would be one million lower than the 1866 . The first year to see a total mintage of less than one million was in 1871.

The case cannot be made that the copper-nickel three-cent piece simply peaked in 1865 and never saw additional demand once the crisis was over. While the mintage trend was clearly lower, there were exceptions such as 1873 when the silver three-cent piece was finally eliminated, and 1881 when for the final time the production would top one million.

It was basically a case where the denomination going all the way back to 1851 had seen use in times of trouble but in the course of regular activity with other denominations in circulation, the three-cent piece no matter what its composition was simply not that important in conducting regular business.

The mintage pattern makes for a somewhat divided collection as the early dates along with a couple later dates like the 1881 are easily the most available and least expensive with a G-4 price for an available date running for less than $20. In fact there are some great values around $20 or slightly higher price as you have dates like the 1875 with a mintage of just 228,000 and the 1876 at 162,000 and these are coins with mintages lower than the 1916-D Mercury dime, which is close to $1,000 in G-4. Certainly the lack of demand for the copper-nickel three-cent piece dates is the prime factor in the price difference but the feeling has to be that at today’s prices these dates are top values.

The tougher dates with the exception of the 1881 are found in the years following 1876. Two dates that stand out are the proof-only 1877 and 1878, which had mintages of 900 and 2,350, respectively. Those mintages result in prices of around $3,750 for the 1877 and $1,200 for the 1878 in Proof-65. In fact, those prices probably seem low and they are when you consider what you are getting, but there are better than expected supplies of these proof-only dates as collectors at the time in many cases used proofs to fill the dates in their collections and as result our supplies today are better than might be expected.  

The good values extend to the business strikes, which is some cases are extremely low mintage. The 1883 is a good example as it had a mintage of just 10,069 yet it lists for around $200 in G-4 while the 1889, which was the final year of the copper-nickel three-cent piece, is just $90 in G-4 and it had a mintage of 21,561. and it is not often you can find a  coin of the United States with a mintage under 25,000 for less than $100.

The most expensive date of the period is the 1885, which had a 4,790 mintage, and despite that low total it is currently listed at $470 in G-4 and once again to find a U.S. coin with a mintage under 5,000 for less than $500 is not an opportunity you get every day. And for less than twice that price you can get an MS-60.

The other proof-only date is the 1886, but it is somewhat different from the 1877 and 1878 as it had a significantly higher mintage of 4,290. That reflects growing collector interest in proofs and puts the 1886 at about $715 in Proof-65. That price may seem low but proofs while small in mintages had far better chances for survival and we see that with a Numismatic Guaranty Corporation total for the 1886 in Proof-65 or better of just over 500 pieces.

With the low circulated prices it’s hard to resist at least considering a set in Mint State and there, too, at least in MS-60 many prices are extremely reasonable. In MS-60 looking at a possible collection you have the three proof-only dates,  but of the business strikes only the 1884 and 1885 at $800 and $900, respectively, could be seen as the keys, with all the other dates tending to be in a range from about $200 to about $550.

The situation becomes more complicated in MS-65 as in the top grades a collection is a real challenge as there are usually not that many true gems on the market at any time and if you need a specific date it can sometimes take a long time before one appears for sale.

The 1883 at $4,850, the 1884 at $6,250 and the 1885 at about $2,300 are the most expensive of the MS-65 dates,  although there are a couple others like the 1876, which is currently at $1,550 and which are moving toward the $2,000 mark. Generally speaking, however, in MS-65 it is not the price that is the problem, but rather the availability as the 1884 for example has been graded just six times in MS-65 or better by NGC and other dates are at similar low totals.

With such low availability, if you do encounter an MS-65 or higher grade, you might have to pay more than the Coin Market price for it.

An interesting option for a high-grade set is to assemble a set of proofs and that is a much more possible option than many would believe.

In fact, in the case of many dates a Proof-65 is a much easier and less expensive a coin to find than an MS-65. The 1884 is a good example with NGC having seen six examples in MS-65 or better but the total in Proof-65 or better is close to 800! Obviously, the odds of finding a proof are much better.

The significantly higher numbers translate into significantly lower prices. The 1883 for example is $4,850 in MS-65 but just $690 in Proof-65 while the 1884 is at $6,250 in MS-65 but only $700 in Proof-65.

The pattern of proofs being more easily found is a strong one. The one tough proof is a bit surprising as it is the 1865. In fact, if you understand the situation at the time it was struck it is not surprising as proofs were really just getting started in terms of popularity so the numbers produced were smaller.

That puts the 1865 at $6,500 but the fact is it is still available with NGC reporting under 100 examples in Proof-65 or better.

At its current price, the 1865 is still far less than other key proofs of the period such as the 1867 with rays Shield nickel, making a copper-nickel three-cent piece collection in proof a collection that is still possible for many and that is quite an opportunity. If you check, the price is really surprising as about one-half of the dates can be found for less than $1,000 in Proof-65 and many are around $700.

Of the top dates, only the 1877 joins the 1865 as being above $2,500, so there are very few dates that will really test your budget or your patience as compared to other more popular collector sets.

Sure, there are no childhood memories of the that you can indulge in as you assemble your nickel three-cent collection. It is a set where you will make your own new memories as you assemble it. That has to be worth something. Perhaps it is the difference between fondly remembering the past and boldly going beyond it.

Whatever your decision, when approaching the copper-nickel three-cent piece it is a case where you cannot go wrong. In any grade you are going to get historically interesting coins at prices that make them excellent values today. It’s truly a lesser-known collection and that provides a real opportunity. Once the spotlight hits a series, prices tend to pop up quickly. If that happens, you will kick yourself if you don’t already own it.

More Resources:

• Subscribe to our Coin Price Guide, buy Coin BooksCoin Folders and join the NumisMaster VIP Program

2010 U.S. Coin Digest, The Complete Guide to Current Market Values, 8th ed.

State Quarters Deluxe Folder By Warmans

Standard Guide to Small-Size U.S. Paper Money, 1928 to Date

Strike It Rich with Pocket Change, 2nd Edition

 

 

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