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Silver three-cent piece outlasted its viability

gre0814a.jpgIf you want to collect something different, the silver three-cent piece might just be a great choice for you. Offering history and good values, the smallest silver coin in the history of the United States makes for a great deal of fun as a collection. There are a lot of interesting coins in this silver collection from the 1800s that many can attempt and have a real chance to complete.

It would be safe to suggest that the idea of a three-cent piece of any composition did not come naturally to the United States. The initial Mint Act of April 2, 1792, did not include a three-cent piece. Not only was the denomination not approved, it probably did not even come up in conversation. There was simply no real commercial need as there were cents, half cents and silver half dimes, and these would have been seen as adequate to meet any commercial needs.

gre0814b.jpgThere was another good reason not to consider a silver three-cent piece. That reason was the U.S. Mint and its capabilities and challenges. The early Mint had a limited capacity. With an extreme national coin shortage, there was really no ability to produce all the denominations that were authorized. To add another would have meant that it would be rarely produced, and if produced at all the numbers would be very small. The Mint was years away from even considering another denomination. Even if it had the capability, back in the 1790s there were other real problems. The supply of metal from which coins were made was far from certain. Copper might have been the most regular problem, but gold and silver were being carefully monitored as well.

gre0814c.jpgThe desperate nature of the situation was seen in 1804 when, finally with no other choice, the Mint suspended the production of silver dollars and gold eagles. The two larger denominations were selected because at the time there was a practice of allowing the people supplying the metal for coinage to select the denominations to be made. More often than not, people selected upper denominations. In the case of the silver dollar that was especially troublesome as many of the silver dollars were exported and never saw circulation in the United States. To use valuable time and resources to create coins that did not even circulate while there was a national coin shortage was a situation that could not be allowed to continue.

gre0814d.jpgEven with the suspension of silver dollar and gold eagle production, the Mint?s situation was far from stable. It would be years before improved machines were on line and there were still metal problems, as well as other things such as yearly epidemics, which saw the Mint close for a month or more in many years. If it could go wrong, it probably did. While a two-cent piece was actually suggested in Congress in 1807, the Mint, while not objecting directly, raised enough questions to see the idea put on a back burner without being approved at the time.

As the years passed there was progress. The situation with gold coins had been a crisis in the 1820s as they were too valuable and were being exported. In 1834 the amount of gold in gold coins was reduced slightly, and that allowed gold coins to be made in greater numbers and they could finally circulate.

gre0814e.jpgThere were other improvements. By 1836 the Mint was busily installing a steam-powered press, which would make a big difference in production. In addition, in the later part of the 1830s new branch mints would open in Dahlonega, Ga., Charlotte, N.C., and New Orleans, La. While only New Orleans would produce silver and gold coins, the new facilities would help to ease the pressure on Philadelphia, which up to then had been supplying all the coinage for the nation.

gre0814f.jpgThe time might have been right for new denominations, but there was no pressure to have any. The continuing interest in a two-cent piece surfaced in the form of patterns; otherwise, there was really no push for anything as the needs of the nation seemed to be handled quite well by the denominations there were, and by some numbers of foreign issues still in circulation.

The discovery of gold in California would changes things. It almost immediately resulted in the first new denominations since 1792, in the form of a gold dollar and gold double eagle. Later a $3 gold piece would follow. The basic view seemed to be that if it used up gold and caused no harm, it would be approved. Congress would only balk at the idea of gold $25, $50 and $100, apparently figuring there could be too much of a good thing.

Actually, there was too much of a good thing in another respect. The vast quantity of gold in California upset the traditional gold-to-silver ratio. The most direct impact of that was that suddenly silver coins cost more than face value to produce. The public promptly began to hoard silver coins and once again the nation had a coin shortage.

Since the gold would not go away, there was really only one response to solve the problem. That was for Congress to slightly lower the amount of silver in silver coins. Of course, Congress had historically been very slow to take such steps, as was seen by the situation with gold back in the 1820s. A House of Representatives committee took up the matter and somehow came out with the idea of a 75 percent silver three-cent piece.

gre0814g.jpgThe decision might seem odd, but the alternatives were a bit strange as well, including a 2-1/2-cent piece. That odd denomination actually made some sense as there were still Spanish ?bits? in use and they were valued at 12-1/2 cents, so the peculiar denomination could make correct change if someone paid with a bit. In fact, the nation was moving toward the elimination of all foreign issues, and that probably doomed the idea of a 2-1/2-cent piece ? unless it was making change for a bit, the denomination had no real purpose.

gre0814h.jpgThe idea of a 75 percent silver three-cent piece was only a little better. It might well have been an early example of political spin. As a new denomination, the fact that it was 75 percent might have seemed less like Congress was debasing the coins, and thus result in less public criticism. In addition, it was apparently cleverly packaged. At roughly the same time, the postage rate for a letter was put at three cents. That allowed the new coin to be promoted as a convenient denomination for use in purchasing a stamp. Of course, it was suspect as the average American of the time was perfectly capable of carting around a couple large cents received in change without serious discomfort. But, Congress had its story and was sticking to it.

In fact, the public did not react the way the Congress might have feared. The 75 percent silver three-cent piece would not be hoarded and at least for a brief period would help in making change.

Designing such a small coin was something of a problem. Chief Engraver James B. Longacre did about all he could. There was really no room for a design so Longrace used a star outline with shield inside for the obverse and a Roman numeral III inside C-shaped arc for the reverse.

The 75 percent silver three-cent was produced 1851-1853; then it was changed to 90 percent silver while the amount of silver in other denominations was finally reduced slightly. During the brief period, however, there had been fairly heavy mintages of the 75 percent silver three-cent piece, starting out with a 5.5 million mintage in 1851 along with 720,000 pieces in New Orleans followed by an 1852 total of 18,663,500 and an 1853 total of 11,400,000. Those totals make any example relatively available at $25 in G-4, $180 in MS-60 and $975 in MS-65.

The lower-mintage 1851-O would become the only three-cent piece, or trime as they were called, to be produced outside of Philadelphia. The fact that once was enough for production in New Orleans suggests that the denomination really had a very limited role in circulation once regular silver coins returned. The 1851-O is $38.50 in G-4 with an MS-65 at $2,600. Finding a real gem can be a problem.

The change to 90 percent silver for the three-cent piece began with the 1854 mintage and continued until a design modification in 1858. The coins from 1854-1858 have three outlines around the obverse star, with an olive branch being placed above the III and a bundle of arrows below it on the reverse. The new design appears to have had a striking problem as most examples of the type are weak. In his book A Guide Book of United States Type Coins, Q. David Bowers described the problems as ?obverse lettering weak in places; frames around the star of inconsistent strength or missing in certain areas, and shield weak in places; reverse stars are irregular or poorly formed, olive branch and arrows are weak in areas; weak or irregular rims.?

The fact that the silver three-cent piece played basically an emergency role can be seen in the fact that the mintages started to drop significantly once the 90 percent silver coins returned to circulation. The 1854 mintage was down to 671,000 peice, and the 1855 was just 139,000. The other dates of the new type were over a million but none were 1.7 million, which was still a far cry for the earlier totals. While short-lived, the type of 1854-1858 is available, a G-4 at $26 while the 1855 is more at $44. In MS-60 the most available date is the 1858 at $240 while the 1855 is again the most expensive at $550. The MS-65 price for most dates is in a range from $3,300 to $3,500 although the 1855 and 1856 are more. There are also proofs, with the 1858 being the least expensive in proof at $6,400. The others are about twice that price and the 1854 is just plain scarce in proof at $33,500.

After 1858 the design would change again, perhaps in response to the striking problems. The number of outlines for the star was reduced to two while the lettering was made more delicate. The changes did seem to improve the striking, but in fact the public did not care as they were really not using the three-cent piece. Mintages continued to decrease. Only the years through 1862 had what might be called reasonably available dates. These are currently listed at starting levels of $30 in G-4, $195 in MS-60 and $975 in MS-65. For the dates involved, those are good prices as none had a mintage of even 500,000.

The silver three-cent pieces after 1862 are a tough group. Mintages tell the story. After 1862 no silver three-cent piece would have a mintage of more than 25,000 pieces. The suspension of specie payments was part of the reason, but the decline was inevitable as the denomination was not in heavy use. There was another factor, in that in 1865 a copper-nickel version of the denomination was introduced.

For all practical purposes, the future of the silver three-cent piece was already decided by the time the copper-nickel version appeared. The final mintage of any size was in 1866 when a total of 22,725 silver three-cent pieces were produced. Of course, that total did not look promosing when compared to the 4.8 million mintage of the copper-nickel version.

The declining mintages of the period create interesting price divisions. The dates up to 1862 are available around the listings already mentioned. In the years after 1862, you are looking at some tough dates. The most available G-4 of the later dates is about $340, and an MS-60 will start at $650 for the higher mintage 1866 while the 4,000-mintage 1870 is at $900. There are lower mintages than the 1870, the 1872 at less than 2,000 listing at $795 in MS-60 and $5,500 in MS-65. A number of other dates can be found for as little as $1,700 in MS-65.

The prices make these dates great values. One factor keeping the prices down is the fact that there are proofs of these dates available, which adds to the supply of nicer coins available. The 1872 is a good example. It had a mintage of 1,950 business strikes along with an estimated 1,000 proofs. The proofs, which would have been sold to collectors ,would have had much better care over the years and consequently a much great chance for survival. That shows in the prices. An MS-65 1872 is $5,500 but a Proof-65 is just $1,350. The 1868 is similar with an MS-65 at $5,750 while a Proof-65
is $1,400.

The grading service totals also support the price distinction, with proofs usually being far more available than business strikes. One of the interesting questions from the production over the period is why the Mint would have such low business strike mintages and sometimes nearly equal proof totals. The suggestion has been, and it may have some merit, that officials wanted to make and sell the proofs but felt they might be accused of making special issues for their friends. As a result, they had minimal business strike totals to avoid criticism. The case can also be made with such low business strike totals, if there had been a need, these mintages would never have helped anyway.

The final silver three-cent piece mintage came in 1873 and it was a proof-only issue. The silver three-cent piece was eliminated that year but not before a mintage put at 600 proofs. We cannot be sure if all were sold, but the historically important final silver three-cent piece is priced at $2,500 today in Proof-65.

Certainly the end of the silver three-cent piece could have come as no surprise to anyone. The silver three-cent piece had not had a significant mintage since 1862 and had been used only in limited areas in the decade since 1862. In addition, the arrival of the copper-nickel three-cent piece left the silver three-cent piece with no real role in circulation except possibly in the West.

Although the silver three-cent piece may have ended with relatively little notice, the fact is the silver three-cent piece had played an important role in commerce in the early 1850s. While that role would certainly decrease over the years, it cannot be said that the silver three-cent piece had failed. It was just an emergency issue that, once the emergency was past, had little real purpose in normal times. For students of American numismatic history, it makes the silver three-cent piece an interesting coin.

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