page_title: Three-cent nickel
section_title: Background
hierarchical_section_title: Three-cent nickel / Background
caption_attribution_description: English: 1851-O 3CS (416-656)
context_page_description: The copper-nickel three-cent piece, often called a three-cent nickel piece or three-cent nickel, was designed by US Mint Chief Engraver James B. Longacre and struck by the United States Bureau of the Mint from 1865 to 1889. It was initially popular, but its place in commerce was supplanted by the five-cent piece, or nickel.
  With precious metal federal coinage hoarded during the economic turmoil of the American Civil War, including the silver three-cent piece, and even the copper-nickel cent commanding a premium, Congress issued paper money in denominations as small as three cents to replace the hoarded coins in commerce. These small slips of paper became ragged and dirty, and the public came to hate "shinplasters". After the issuance in 1864 of a lighter bronze cent and a two-cent piece of that metal, both of which circulated freely, there were proposals for a three-cent piece in copper-nickel to replace the three-cent note. The advocates were led by Pennsylvania industrialist Joseph Wharton, who then controlled the domestic supply of nickel ore.
context_section_description: The great influx of bullion from the California Gold Rush and other finds caused the price of silver relative to gold to increase starting in 1848, and silver coins were hoarded or exported for melting. In 1851, a bill for a three-cent piece in 75% silver and 25% copper was introduced in Congress by New York Senator Daniel S. Dickinson, who wanted to lower postage rates from five to three cents. This percentage of silver was less than the normal 90% so that the coins would circulate at a time of hoarding. The copper large cent did not circulate in the Pacific Coast region or South due to prejudice against coins that did not contain precious metal, and some means of allowing the purchase of a postage stamp without the use of copper cents was necessary. Dickinson's bill passed on March 3, 1851, and in addition to authorizing the new three-cent silver, lowered rates for most domestic mails. By 1854, the imbalance had abated, and Congress increased the silver content of the three-cent piece to the standard 90% for silver coins, though its weight was reduced.
  The large cent was replaced by a smaller version made of 88% copper and 12% nickel in 1857. In 1861, the Civil War began, and when efforts to finance the war via borrowing failed, the Treasury stopped paying out gold in December 1861.  The United States shifted to a paper money-based economy with little disruption. By June 1862, the price of silver had risen to the point where coins of that metal vanished from circulation, many exported to Canada, where they were both acceptable in circulation, and could be exchanged for gold. This departure of low-value coins was far more disruptive to commerce than the loss of the high-denomination gold coins, and change in transactions was made by a variety of makeshifts. These included currency issues by cities and businesses, encased postage stamps, and federally issued fractional currency—paper notes in denominations as small as three cents.  The low-value paper currency, whether issued by government or business, were called shinplasters by the public, which disliked them. On the Pacific Coast, where paper money was not favored, silver and gold continued to circulate.
  Since fractional currency in three-cent denominations did not appear until late 1864, the cent was the only means then circulating of making change from the five-cent note, and came, in 1862 and 1863, to command a premium when sold in lots, of about 4%. The Philadelphia Mint tried to keep up with demand, limiting public purchases of cents to five dollars, and sending shipments to major cities. Despite these attempts, Mint Director James Pollock noted in his annual reports that cents were almost unobtainable, hoarded despite the fact that their metallic value remained less than one cent each. Numismatist Neil Carothers theorized that they were put aside by the public as the only circulating federal coinage, made of metal at a time when the public was forced to accept flimsy pieces of paper instead of silver and gold.
  With cents from the Philadelphia Mint selling at a premium, many private token issues were issued in 1863, and passed as cents in commerce. Mint officials took notice that the tokens, often made of bronze rather than the copper-nickel alloy then being used in the cent, were not hoarded and began to consider issuing bronze coins. When Pollock proposed legislation for bronze one-, two-, and three-cent pieces, it was opposed by industrialist Joseph Wharton, owner of the major source of nickel in the United States at the time, a mine at Gap, Pennsylvania. Pollock's bill, as introduced, provided for one- and two-cent pieces of bronze, and the Wharton interests opposed it. According to Carothers,
  Congress declined to compromise with the nickel interests ... In the House, its opponents managed to delay its passage for a month. Thaddeus Stevens, one of the most influential men in the House, fought it bitterly, admitting, however, that he objected to it because it adversely affected Wharton's interests.
  The Coinage Act of 1864 passed into law on April 22 of that ye
caption: The silver three-cent piece was issued beginning in 1851.
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