It’s tempting to think that if there was a serious problem with making change in the West---one that supposedly led to the introduction of a 20-cent piece in 1875---that it could have been solved by use of other small change, such as the copper-nickel Shield nickel (introduced almost 10 years earlier), or the silver half dime (coined up until 1873). However, these coins, even the silver half dime, didn’t cut it in this precious metals-loving region.
Some writers have come to believe that the 20-cent piece, championed by Sen. John Percival Jones of Nevada, was merely an effort to sell more silver and that the accompanying story of the real need for such a coin was made up to help push legislation for the coin through Congress. However, I’ve found newspaper articles dating to the 1860s, long before Jones became a prominent figure in the silver industry, or a U.S. senator, that clearly show there was a regional small change problem because of that area’s adherence to the “bit” system—a remnant of the use of foreign coins in change.
Basically, a bit was valued at 12.5 cents. However, if you paid for something worth 10 cents with a quarter, the 10-cent piece was effectively valued as a bit and you would get back 10 cents in change, not 15.
A big part of the problem was the region’s adversion to base metals as money and, for some reason, to silver half dimes as well. Therefore, most on the West coast applauded the introduction of the 20-cent piece as being greatly needed. However, in the East, they weren’t so certain.
The New York Times, in an article reproduced in the June 4, 1875 issue of the San Francisco Chronicle, noted:
“To satisfy those queer people, the Californians, the Government has ordered the issue of twenty-cent pieces. In the happy land beyond the Sierra Nevada the smallest available coin is a ‘bit’—an imaginary issue of the Mint, valued at twelve and half cents. But a silver dime, worth ten cents, is also a bit, and two dimes are two bits and a silver quarter is a ‘two-bit piece.’ Therefore, when the silver dime becomes indefinitely multiplied, five cents drop off every two bits, to the great profit of sharp fellows who can bring their mind to consider as small a matter. The twenty cent coin…will be the first common multiple of the California bit…”
It added, “The new coin is mainly intended for circulation in the Pacific States, where the want of such a coin has long been felt in making change, and where the lowest coin in circulation is the dime, or, 10-cent silver piece.”
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