This article was originally printed in the latest issue of Numismatic News.
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The story is well known among coin collectors. The design on the nickel was changed during 1883. The new Liberty Head design depicted the bust of Liberty on the obverse, with a Roman numeral “V” to identify the denomination value on the reverse. At 6 o’clock on the reverse was the legend “E Pluribus Unum.”
Some enterprising individuals allegedly recognized the lack of the word “cents” coupled with a depiction of Liberty rather than a federal shield could cause confusion between the nickel and the $5 gold piece if the nickel were to be gold plated.
Apparently the idea worked. Today gold plated 1883 “No Cents” nickels are called racketeer nickels. They continue to be found in old family hoards. The only problem with purchasing one of these nowadays is there is no way to be certain the plating dates from 1883.
These gold-plated nickels have been sold commercially in the hobby for generations.
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Examining the story of the racketeer nickel in hindsight it might appear to be ridiculous that such confusion between the two distinct denominations could take place. All anyone had to do was look more closely at the gold plated racketeer nickel to recognize the coin was worth five cents amd not five dollars. Considering the average working individual likely received about $5 salary for a week in 1883, the story appears to be even more incredible. How many people would carry an entire weekly salary in their pocket in the form of a single coin?
The nickel has a diameter of 21.2 millimeters and a plain or smooth edge, while the contemporary $5 gold coin has a diameter of 21.6mm and a reeded edge. Between the obvious differences in the two coins and the economic logic just presented it appears the story of the racketeer nickel might be nothing more than a numismatic urban legend.
In fact, the confusion was real enough that part of the way through 1883 the U.S. Mint modified the reverse design on the nickel, adding the word “Cents” at 6 o’clock. This modification was in theory supposed to prevent anyone from passing the later nickels as gold coins.
Realistically if someone hadn’t looked closely enough at the gold plated coin to see the differences in designs, diameter, and the edge when the word “Cents” wasn’t present, why would the addition of the word “Cents” make a difference? People were looking at the color of the coins, not their designs.
It appears the additional design modification made a difference psychologically, even though the gold-plated nickel deception could easily have continued despite the minor design change. I have not encountered any gold plated V nickels dated between 1883 (Cents variety) and 1912 as a coin buyer. However I am only speaking for myself. Did the deception continue?
Bringing the concept of the racketeer nickel up to date, the confusion is back. I was in a bank in western Ohio during mid-June where a bank teller showed me a gold-plated state quarter that had been successfully passed to the bank as a gold-colored dollar coin. Gold plating state quarters is commonplace. There are several promoters who do this to enhance the appearance of the coins, then sell them in handsome presentation boxes for a premium to novice collectors.
Gold plating is simple. You can purchase gold plating equipment and do it yourself at home. The gold plating is a novelty, but from the viewpoint of a coin dealer, the coins have no premium value for their serious clients.
Once again, just as in 1883, the question has to be asked how this confusion could happen. The quarter is a 24.3mm diameter coin with a reeded edge. The 2000 “golden” Sacagawea dollar is a 26.5mm diameter coin with a smooth edge, while the following Presidential and additional dollar coins have lettered edges.
You would think the distinctive design, diameter and edge differences should be sufficient to alert someone to the correct denomination, especially if that someone is in the money busy as a bank teller is, but apparently just as in 1883 the average person looks at the color of the coin, not at the design details, diameter, or the edge.
Let’s face it, what appears to be a no-brainer to readers is the view a coin collector takes towards the average coin. The devil is in the details and these details are apparently being overlooked by some non-collectors. They are once again using color exclusively to identify the denomination.
There have been other similar situations in U.S. coinage history. The 20-cent coin was confused with the quarter, the 1943 zinc cent was confused with the dime, and the Susan B. Anthony dollar was confused with the quarter. It doesn’t look like Congress, which authorizes such coins, has learned anything from our past debacles.
Will the “gold” dollar story just told to me prove to be an isolated incident? Only time will tell. With the large number of gold-plated state quarters being sold to the general public it is only a matter of time until an increasing number of them are spent rather than kept as a collectible. Let’s see if they are spent as quarters or as dollars.