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Silver three-cent coin came out of the blue

gre0429a1.jpgThose wanting something different to collect will find that one of the more interesting possibilities is the silver three-cent piece. It is not just an interesting denomination, but it?s also a case where with relatively limited interest over the years, the silver three-cent piece offers a lot of value for your money.

Sometimes with off-denominations like the two or three-cent pieces the temptation is to consider them as basically similar simply because they did not last in production for an extended period of time. While both did not become permanent parts of the regular coin production of the United States, the story of the two is very different and it can safely be suggested that it was the three-cent piece that  seemed to have a greater impact.

It was somewhat ironic as realistically the two-cent piece before first being produced in 1864 had actually been suggested a number of times while the three-cent piece seemed to simply appear out of the blue as a potential coin back in 1851.

There was a natural delay before the Mint began to deal with denominations not authorized by the original authorizations back in 1792 simply because the early Mint was not up to the task of even producing the denominations that had been authorized. That can be seen in  sometimes low mintages and other times no mintages at all of some denominations.

gre0429b2.jpgThere was a host of reasons for the problems starting with the fact that supplies of the metal needed to make coins were not reliable. Although the situation was probably worse in the case of copper, when silver and gold did arrive, it was the practice of the day to allow those providing the metal to pick the denominations to be made from their silver and gold and they normally picked upper denominations like silver dollars and gold eagles.

That saw the Mint producing denominations that were not really being used in circulation.

This was taking place at a time when there was a serious national coin shortage. The situation became desperate, until finally, in 1804 the production of silver dollars and gold eagles was suspended in the hope of enabling the Mint to spend more time producing the denominations that were needed to solve the overall coin shortage.

Certainly during that period there was no reason to have additional denominations as the Mint had its hands full simply trying to produce the already authorized denominations.

Despite the well known difficulties of the Mint, there had been a proposal in Congress to have a two-cent piece in the early 1800s. Without ever directly opposing the idea, the Mint director at the time raised enough questions to see the proposal basically stall without ever being approved.

In the 1830s there were pattern two-cent pieces produced, but they too never made the jump from being an idea to being a coin. During that period, however, there is no record of anyone suggesting a three-cent piece.
Over many decades the situation at the Mint did improve. There were new and better machines added to improve production. There were also better supplies of metals and ultimately in the late 1830s there were new facilities opened in New Orleans, La., Dahlonega, Ga., and Charlotte, N.C.

gre0429c3.jpgWhile Charlotte and Dahlonega would only produce gold coins which, after having the amount of gold reduced slightly in 1834 were finally circulating, the new facility in New Orleans would produce silver issues as well taking some of the pressure off Philadelphia. New Orleans was a major port and large sums of money were routinely required.

Even so, with all the progress seen by the end of the 1830s, no one was promoting the idea of new denominations beyond the two-cent piece patterns which were created about that time.

It could very easily be suggested that the roots of the silver three-cent piece were found in the American River in  California in the form of gold. The vast wealth of gold discovered in California was certainly a good thing, but all that gold upset the normal gold-to-silver ratio,  making silver coins more expensive to produce than their face value. The public figured that out quickly and promptly started hoarding the silver coins, causing another national coin shortage.

The logical solution to the problem was to have the Congress reduce slightly the amount of silver in silver coins as it had done with gold coins back in 1834. The Congress, however, wanted no part of that idea, probably fearing public reaction to coins containing less silver.

gre0429d4.jpgThere was a study of the idea of new denominations in the House of Representatives at the time and that committee came back with the idea of a three-cent piece. It was not a simple decision as there had been some support for the idea of a two and one-half cent piece. It sounds ridiculous, but it actually made a certain amount of sense at the time as in circulation there were still many Spanish ?bits? valued at 12 and one-half cents. A two and one-half cent piece would actually come in handy when it came to making change for a Spanish ?bit?.

It was, however, the goal to have all the coins of other nations removed from circulation in the near future and that may have argued against the two and one-half cent piece as it would have only encouraged a situation officials were trying to bring to an end.

In the Act of March 3, 1851, a new 75 percent silver three-cent piece was authorized. Containing just 75 percent silver,  the new denomination would be able to circulate where that would not have been the case if it was the traditional 90 percent silver alloy.

Of course there might be some public reaction to a seemingly debased silver coin, but since there was no prior three-cent piece, it technically could not be debased. Congress also was able to spin that potential problem as it lowered the postage rate to three cents and cheerfully promoted the new three-cent piece as a denomination that would make the purchase of stamps convenient.

Of course the number of people buying stamps at the time was suspect and the notion that Americans at the time would have had problems carting around a couple large cents received in change if they purchased a stamp with a half dime is equally, if not more suspect, but the members of Congress had their story and they were sticking to it.

Of course such a small coin presented a real challenge in terms of its design and Chief Engraver James B. Longacre did about all he could coming up with a star obverse and a Roman numeral III for the reverse.

First released in 1851, the 75 percent silver three-cent piece would only last until 1853, when it was changed to 90 percent silver, with the weight being reduced slightly. The 75 percent silver three-cent piece actually was popular with the public as they really had little choice. It was one of the few coins that could circulate at the time. The result was large saw large mintages, with the 1851 total being 5.5 million. That first year would also see New Orleans produce a total of 720,000 examples. In the first full year of production in 1852, the mintage would rise to 18,663,500 and 1853 saw  another large mintage of 11,400,000. The totals are high enough to make the dates readily available at $25 in G-4 while an MS-60 is $185 with an MS-65 at $975.

gre0429e5.jpgThe lower mintage 1851-O is definitely tougher, with a G-4 listing of $38.50. An MS-60 is $340 and an MS-65 at $2,600. The Professional Coin Grading Service totals support the higher 1851-O prices as it has been seen just 39 times in MS-65 or better, while the 1851 and 1852 are over 200 times.

The 1851-O is important for a variety of reasons including the fact that it is tougher than the Philadelphia dates. It is also noted for being especially nice when it can be found in top grades. It would also prove to be the only three-cent piece ever made at a branch mint. It is unknown why New Orleans never produced another although it may simply be a case where there was little use of the small coin in New Orleans. The export trade tended to use the very largest coins.

The change to 90 percent silver began in 1854 while the weight was decreased from 0.80 grams to 0.75 grams. The coins starting with the 1854 have three outlines to the star with an olive branch placed above ?III? on the reverse while a bundle of arrows was placed below. The type is notorious for striking problems.

With the rest of the silver coins now returning to circulation (Congress had bitten the bullet and authorized lower weights in 1853), the purpose for the silver three-cent piece unless you believed the notion that they would be handy for buying stamps was basically eliminated.

Mintages would decline quickly. The 1854 was at just 671,000 and the 1855 promptly dropped to just 139,000. The other years of the type, which lasted until 1858, would see totals over 1 million but none would top 1.7 million, which was a far cry from the totals just a few years earlier.

While short-lived, the 1854-1858 types are available with a G-4 at $26 for the 1854 coin being the cheapeste, although the lower mintage 1855 in particular can command a premium being $44 in G-4. In MS-60 the 1855 is also more at $550,   while the most available date is the 1858 at $240. It is the same in MS-65 where the 1855 is $8,500 while another date might be $3,300. The prices are kept lower because of limited demand, but with the frequent weak strikes, it can be safely suggested that top quality examples are still a great value. It?s also ironic that it is the lower mintage 1855 that tends to be the date where the strikes were the best.

gre0429f7.jpgThe lack of supplies in top grades can be clearly seen in the Professional Coin Grading Service totals that show that the most often seen date in top grades is the 1858, which has been graded 74 times in MS-65 or better , while the 1856 is at just 20 and the 1855 is at a mere 11 times in MS-65 or better.

After 1858 the design was changed again with the number of outlines around the star being reduced to two and the lettering was made more delicate. The changes might have been in response to striking problems, but even if not, it seemed to help as this type of silver three-cent piece is frequently found in top grades.

What did not change was the decreasing use of the denomination as the mintages only up to 1862 are what could be consider normal. After 1862 the totals in many cases were simply token production levels. That was partially because with suspension of specie payments and hoarding of all silver coins including the three-cent piece during the Civil War there was really very little reason for production, but it was also a case where the denomination was not in extensive demand even when silver coins were circulating.

This situtation makes for a clear division in terms of  available dates as they are basically up to 1862 with prices of $38.50 or less in G-4. In MS-60 the dates are roughly $195 to $230 and in MS-65 they are around $975 with a Proof-65 being $1,400 and up.

In fact, the proofs, which first became more numerous in 1858, are an option as even if supplies are low in MS-65 the Proof-65 population while not large usually had better care and as a result are available today at prices sometimes very close to the price of top quality examples in Mint State.

The dates after 1862 are a very different matter. None would have a mintage of even 25,000 pieces. It was not simply the fact that silver three-cent pieces could not circulate, but also the period would see the introduction of the copper-nickel three-cent piece, which started with an 11,382,000 mintage in 1865 and that was followed by a 4,801,000 1866 total.

Certainly that spelled doom for the silver three-cent piece. If you did not really need the denomination in normal times, it would be even less important if there were also copper-nickel versions in large numbers in circulation as well. In just two years more copper-nickel three-cent pieces had been released than all the silver three-cent piece mintages since 1854 combined.

The situation produces much higher prices for the dates after 1862 with dates starting with the 1863 listing for at least $340 in G-4 while a tougher date like the 4,100 mintage 1868 is at $400.

In the case of MS-60 examples the later dates range from as little as $650 for the higher mintage 1866 to $900 for the 4,000 mintage 1870. In MS-65 there is a wide range of prices with the most available dates being $1,700 while tougher dates like the 1,950 mintage 1872 are $5,500 and the 1868 is at $5,750.

The prices in MS-65 are reasonable especially when you consider the mintages. One reason for that is a lack of demand, but a second involves the yearly proofs that were acquired by collectors and seemed to have better care, making them more likely to survive to the present day.

The 1872 is a good example of the situation. The 1872 had a low mintage of 1,950, but that was enhanced by what we estimate to have been a 1,000-piece proof total. That produces prices of $5,500 today in MS-65 but in Proof-65 the price is just $1,350. There is good reason. At the PCGS they report just six examples of the 1872 in MS-65 or better. In Proof-65 or better, however, the total stands at 63 examples. The 1868 is similar at $5,750 in MS-65 and $1,400 in Proof-65. At PCGS the 1868 has been seen just three times in MS-65 or better while the Proof-65 or better total stands at 52, so certainly the proof is less expensive for a reason.

The pattern may not be universal, but it is in place in the case of many dates and it?s vital as many of the dates starting with the 1866 have only been seen a couple times in MS-65 or better. The 1871 is the most frequently seen in MS-65 or better and its total stands at just 37 pieces in MS-65 or better well ahead of the 22 pieces of the 1866, which is the next highest total. By comparison the Proof-65 or better totals in some cases top 100.

A logical question that might be raised is why the Mint even bothered with such token mintages and the answer is we really do not know. One suggestion put forth has been that officials at the time were concerned about appearances and that the small proof totals might well make it look like they were producing rarities for dealers and collectors. If, however, an additional few thousand business strikes were made the charge could not be made that the Mint was producing rarities for friends. Whatever the real reason the fact remains that for an extended period of time there were no serious business strike mintages of silver three-cent pieces.

The silver three-cent piece was clearly on its way out when the final production came in 1873. That was actually just a 600-piece proof mintage. That would make the 1873 the lowest mintage silver three-cent piece with a Prof-65 price of $2,500. In fact there are numbers available, with PCGS reporting about 380 examples graded although only about 65 of that total reached Proof -65 or better.

However you approach the silver three-cent piece today, you will find it?s an interesting collection reflecting the times. After all, the silver three-cent piece basically grew out of the discovery of gold in California and then began its final decline because of the Civil War.

As an emergency denomination it served a useful purpose back in the early 1850s, although it never really had much use in commerce during normal times. At today?s prices, nice examples are a good value and with many stories to tell, a silver three-cent piece collection is a collection that can teach you a great deal while you have a lot of fun with these unusual small silver coins.

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