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History of the Nickel

History of the Nickel
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Posted: 04-21-2020 01:20:00 PM

The five-cent coin was created in 1866 to meet the growing need for circulating coinage in the aftermath of widespread hoarding of silver and gold coins during the Civil War. Keep reading to learn more about the history of the nickel!

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The five-cent coin was created in 1866 to meet the growing need for circulating coinage in the aftermath of widespread hoarding of silver and gold coins during the Civil War. It was not known at the time as a nickel because coins of that metal, three-cent pieces, already existed. When postwar rebuilding began, nickel was readily available and not likely to be hoarded, which made it an excellent choice for a new denomination.

Thanks in good part to the influence of American industrialist Joseph Wharton, who owned nickel mines, the United States began producing coins with a shield design today considered the first nickel. However, those coins should probably be called coppers, according to acclaimed numismatic author Q. David Bowers, since the coins are made of 75% copper and 25% nickel, which has remained their composition to the present time except for when war nickels issued from 1942 to 1945 during WWII.

In 1883 a new nickel known as the Liberty Head was issued. Those nickels were replaced with the immensely popular Buffalo nickel in 1913. In 1938 the Jefferson nickel still used today debuted. Both of those 20th-century nickels remain widely collected.

Buffalo nickels

Buffalo Nickel Reverse The Coinage Act of September 26, 1890, stated that a coin’s design could only be changed 25 years after its first adoption. However, this legal provision has not always been followed. By 1909 the Liberty Head nickel was ripe for change after 26 years of use. There was a discussion about a possible nickel featuring either Washington or Lincoln that did not go far.

At the time, James Earle Fraser, an accomplished artist and sculptor, believed that our coinage should be examples of art and that the designs must be characteristically American. As a child, he had been exposed to the frontier life and the experiences of Native American tribes because his father worked for a railroad company that expanded across the West. His father also helped retrieve remains of the 7th cavalry regiment killed by Native American forces at the famous Battle of Little Bighorn.

An American Icon: Buffalo Nickel Design

Type I Buffalo NickelFraser developed an authentically American nickel design that tapped into the nation’s fascination with Native American culture and was unlike the ones that had appeared on prior coins that were usually based on Caucasians wearing an Indian headdress. The obverse depicted a composite portrait of a Native American chief based on three real people: Iron Tail from the epic Battle at Little Bighorn, John Big Tree, and Two Moons. At the same time, the reverse featured a design of an American bison, or buffalo, named Black Diamond that resided at the New York Zoo.

The Buffalo nickel design was embraced early on by collectors for its incredible artistic merit and higher relief than prior coins. It remains one of the most widely popular numismatic motifs still used today on American Buffalo Gold coins issued since 2006.

Buffalo Nickel Type IIAlso, instead of being smooth, the design fields were matte with a slightly pebbled appearance, which gave the coins a rugged appearance. On Type I Buffalo nickels, the bison rests on a raised mound with the denomination indicated, but this elevated positioning left the words “FIVE CENTS” very vulnerable to wear. Later in 1913, a new obverse today known as Type II coins debuted in which the denomination appeared in a recessed and flat area under a line at the base of the reverse.

Buffalo nickels, as is also the case with Jefferson nickels, are notorious for problems with the quality of their strikes even on mint state examples. This questionable quality is related to the preparation of planchets and the spacing of dies. For example, the 1926-D Buffalo nickel is very poorly struck because the dies were spaced too far apart.

Some of the scarcer issues include 1913-S Type II, 1921-S, and 1926-S. There is an uncommon issue, the 1918/17-D coin overdate, the 1916 double die, and the scarce and popular 1937-D Three-Legged variety coin as well as the much less limited 1938-D/S overdate.

Hobo Nickels

Hobo NickelAnother popular way to collect nickels is through what are known as Hobo nickels, which is a sculptural art form in which nickel surfaces are modified to create entirely new designs. Nickels were favored for this purpose because of their size, weight, and the softness of the metal, which facilitated carving various new design elements into the original design. And they were favored by hobos, who are traveling or impoverished migrant workers, because of the low denomination of the nickel. The earliest Hobo nickels were created from Seated Liberty coins, but these pieces are typically made from Buffalo or Jefferson nickels and remain popular today.

Jefferson nickels

Jefferson Nickel DesignsBy the 1930s, the use portraits of past presidents as design motifs on lower denomination coins, which began in 1909 with the Lincoln cent, became more widespread following the introduction in 1932 of the Washington quarter. Buffalo nickels had been issued for 25 years by 1938, so it was time for a new design. Treasury Department officials initiated a competition for a new nickel design that would feature an image of President Thomas Jefferson, the obverse and one of Monticello, his Charlottesville, Virginia home, on the reverse.

The winning designs were those of Felix Schlag, a German American sculptor, and production began in September 1938. However, Schlag’s original submission for the reverse was not the front-facing, rather stark perspective Treasury officials later requested and selected for the coin but was a side view of Monticello from an angle with trees included that numismatists considered more attractive.   

Apart from adding the artist’s initials “FS” in 1966 and mint marks on the wartime nickels issue from 1942 to 1945, this design remained unchanged until 2004. Since then, it has undergone several design changes.

Although a complete set of Jefferson nickels is not difficult to obtain, the six steps on Monticello frequently appear weakly struck, and examples with “FS” for Full Steps can be worth thousands of dollars.  

War nickels

War NickelsDuring World War II, nickel was a strategic metal needed for armaments and ammunition, so the composition was changed from 25% nickel/75% copper to 56% copper, 35% silver and 9% manganese. These coins were issued in large numbers of as much as over 100 million coins. Large mint marks were added above Monticello, replacing smaller ones to the right of the structure previously, to make it easy to distinguish the wartime coins. The coins were produced at the Philadelphia, Denver and San Francisco mints, and the 1942-P nickels marked the first time a “P” mintmark had appeared on any U.S. coins struck at the Philadelphia mint.

When the war ended in 1945, nickel supplies returned to normal, and the original alloy was resumed. The 1942-45 silver nickels are a popular subset of the series and can be obtained even in mint state condition at affordable prices. The only real rarities of the Jefferson nickel series are overdates like the 1943/42 coin and errors like the 1971 Proof coin missing the “S” mintmark.

Jefferson nickels since 2004

Westward Nickel Set To mark the bicentennial of the famous expedition of Lewis and Clark in 1804, the U.S. Mint issued a special set of Jefferson nickels that became known as the Westward Journey Nickel Series. It includes five one-year-only designs: the 2004 Peace Medal reverse and 2004 Keelboat reverse that were paired with the original obverse design; and two 2005 nickels that featured a new side profile obverse of Jefferson by Joe Fitzgerald of the Mint’s Artistic Infusion Program of outside artists created in 2003 by then Mint Director Henrietta Holsman Fore, which was paired with two new reverses, one showing an American bison and another showing the view Lewis and Clark likely saw when they reached the Pacific Northwest called Ocean in View based on a photograph by an Oregon photographer.

These commemorative nickels were issued at a time when the state quarter series with different reverse designs on each coin was very popular, and the new five-cent pieces were also eagerly embraced by collectors and the public.

In 2006 a new obverse based on a painting by Rembrant Peale featuring a front-facing portrait of Jefferson debuted and was paired with the original reverse by Felix Schlag, which was made crisper and more detailed by Sculptor-Engraver John Mercanti.

Reverse Proof West Point Mint Jefferson NickelJust this year in 2020, the Jefferson nickel series saw another first: the first nickels with a “W” mintmark for the West Point Mint, which are included as a special bonus with 2020 silver, proof and uncirculated coin sets.

Jefferson nickels are a fun modern series to collect. Some options for building a nickel collection include gathering one of each design type, complete date and mintmark set, or by assembling a subset of just the wartime silver coins, or Hobo nickels. They are accessible to children and those on a budget, while also offering a challenge to those seeking scarce, well-struck examples.

 

Sources:

Q. David Bowers, A Guide Book of United States Coins, 2nd edition (Whitman, 2008)

Ron Guth and Jeff Garrett, United States Coinage: A Study by Type (Whitman, 2005)

Daniel A. Gross, “A Brief History of the Nickel,” Smithsonian Magazine, April 28, 2016

R.S. Yeoman and Kenneth Bressett, A Guide Book of United States Coins: Mega Red, 3rd edition (Whitman, 2017)

 

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About The Author

Louis Golino Louis is an award-winning numismatic journalist and writer specializing on modern coins. He has been writing a weekly column for CoinWeek since May 2011 called “The Coin Analyst,” which focuses primarily on modern U.S. and world coins and developments at major world mints. In August 2015 he received the Numismatic Literary Guild’s award for Best Website Column for “The Coin Analyst.” He is also a contributor to several magazines, including Coin World, where he writes a bimonthly feature;The Numismatist, the American Numismatic Association’s monthly publication, where he writes a monthly column on modern world coins; and American Hard Assets. He began writing about coins in 2009. He is a founding member of the Modern Coin Forum hosted by ModernCoinMart and has written articles for MCM since 2014. He has collected classic and modern U.S. and world coins since he was about 10 and first joined the ANA in the 1970’s. He was previously a congressional relations specialist and policy analyst at the Congressional Research Service of the Library of Congress and a syndicated columnist and news analyst on international politics and national security for a wide variety of publications. He has been writing professionally since the early 1980s.

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