Nickel Nickels

UseNickel.org staff

Nickels. While the names of many American coins suggest their value relative to the dollar (dimes, quarters, etc.), nickels are named after the metal of which they are composed. Supposedly, at least. In reality, nickel coins are composed of a nickel-copper alloy that is 25% nickel and 75% copper. It might be surprising that the five-cent coin’s namesake would make up such a small portion of the coin; however, considering pennies were made entirely from copper until 1837, a name related to copper would have perhaps been misleading. And “half-dime” was already taken by an entirely different American coin. So why did the Federal Government find it necessary to introduce the nickel?

At the start of the Civil War, the United States was facing a coin shortage. Since many coins at the time were made of silver and gold, individuals began hoarding money, fearing economic recession and nervous over their weakened government. After all, the intrinsic value that gold and silver coins possessed was arguably more dependable. This was particularly true with the silver half dime. More expensive and smaller than today’s nickels, the half dime had been the first coin minted by the United States government, and, in the 1860’s, became one of which the US Mint could not produce enough. Without enough coins in circulation, even simple day-to-day transactions may be impossible.

One of the alternatives towards which the Federal Government turned was pieces of paper with postage stamps, a medium that eventually evolved into paper bills. The five-cent bill, in fact, unintentionally helped pave the way for five-cent nickel coins. In 1866, the head of the National Currency Bureau (now the Bureau of Engraving and Printing), Spencer Clark, was responsible for finding a portrait to include on the front of the new note. He created an uproar, however, when the likeness upon which he decided was none other than his own. Congress subsequently retired the note and voted that currency could no longer include the portraits of living individuals.

Meanwhile, industrialist Joseph Wharton—who (not so coincidentally) happened to own several nickel mines—was lobbying Congress for a nickel-based coin. A relatively inexpensive alternative, nickel coins promised a straightforward solution to money hoarding, and so, after the five-cent bill’s failure, five-cent nickels emerged as the decided victor. And they were unmistakably successful: between 1867 and 1868, almost 30 million were minted. Today, of course, one can purchase hardly anything with a nickel, yet during the late 1800’s and early 1900’s, the coin was incredibly convenient. From a loaf of bread, to a trolley ticket, to a bottle of Coca Cola, there was no shortage of potential five-cent transactions. Even movie theatre tickets cost a single nickel—hence the term “Nickelodeon.”

Indeed, the nickel has a fascinating history, but centuries of inflation may soon render it obsolete. The cost to produce a single nickel in 2019 was ¢7.62—an increase from the previous year—and for 14 straight years the coin’s unit cost has exceeded its mere five-cent value. Numerous countries have already eliminated low-denomination coins of their respective currencies. In 1857, the United States retired the half cent coin, which, if adjusted solely based on inflation rates, would be equivalent to ¢15 in 2020. Does this mean that nickels will be discontinued soon? Probably not; nickels undoubtedly have little purchasing power today, and while the nickel (and penny) debates have been occurring for years, the issue is far from pressing, and so will likely not be resolved soon.

Nickel Coin Design: A Brief Overview

Shield Nickels (1866-1883)

The first nickel depicted a shield on the front of the coin, with a large “5” surrounded by stars and rays on the back. In 1867, the design was modified due to production issues (the extra pressure needed for stamping rays into the coin wore out the coinage dies quickly), and the rays were removed. Nevertheless, difficulties related to production continued, so many shield nickels today bear inconsistencies. To the right are photographs of the nickel, the top being the original reverse side with rays.

Liberty Head Nickels (1883-1913)

Liberty head nickels—also referred to as V nickels—were first minted in 1883. The front features Lady Liberty in profile, while the reverse, as the name “V nickel” implies, includes a large roman numeral five. Originally, this “V” was the only indication of the coin’s value, since the word “cents” did not appear on the coin. Some took advantage of the omission by gold-plating the new nickels and passing them off as the five dollar coin. As a result, the United States Mint added “cents” to the back of the coin later that year.

Buffalo Nickel (1913-1938)

The nickel was once again updated at the beginning the of 20th century, this time celebrating the country’s Native American roots. On the front was a portrait of a Native American, and on the back was the image of a bison. Unlike previous nickels, the buffalo nickel’s design was especially “American,” noting a relatively distinct and unique aspect of the country’s history.

Jefferson Nickel (1938-present)

Jefferson nickels are easily the most familiar variant in the 21st century, for they are still minted today. Felix Schlag designed the coin in 1938 as part of a competition. The buffalo nickel was intended to only last 25 years, so Jefferson was selected to be the face of the new design, perhaps in part due to luck: The Democratic Party was in power at the time, with Franklin Roosevelt as president, and Jefferson was considered to be a father of the Democratic Party. Rather ironically, nickel was altogether removed from nickels during World War II. The metal’s importance to war production meant that the coin was composed of 35% silver, 56% copper, and 9% manganese. Schlag’s Jefferson nickel would last through the turn of the 21st century, when an updated image of the Jefferson nickel would be produced. Since 2006, the coin has depicted Jefferson facing forward, as opposed to in profile, which is unprecedented for United States coins.