The Shield nickel was the first United States five-cent piece to be made out of copper-nickel, the same alloy of which American nickels are struck today. Designed by James B. Longacre, the coin was issued from 1866 until 1883, when it was replaced by the Liberty Head nickel. The coin takes its name from the motif on its obverse, and was the first five-cent coin referred to as a "nickel"—silver pieces of that denomination had been known as half dimes.
Silver half dimes had been struck from the early days of the United States Mint in the late 18th century. Those disappeared from circulation, along with most other coins, in the economic turmoil of the Civil War. In 1864, the Mint successfully introduced low-denomination coins, whose intrinsic worth did not approach their face value. Industrialist Joseph Wharton advocated coins containing nickel—a metal in which he had significant financial interests. When the Mint proposed a copper-nickel five-cent piece, Congress required that the coin be heavier than the Mint had suggested, allowing Wharton to sell more of the metal to the government.
Longacre's design was based on his two-cent pieces, and it symbolizes the strength of a unified America. The nickel proved difficult to strike and the reverse, or tails, design was modified in 1867. Even so, production difficulties continued, causing many minor varieties which are collected today. Minting of the Shield nickel for circulation was suspended in 1876 for a period of over two years due to a glut of low-denomination coinage and it was struck in only small quantities until 1882. The following year, the coin was replaced by Charles E. Barber's Liberty head design.
Background and authorization
Five-cent pieces had been struck by the United States Mint since 1792. They were the first coins struck by Mint authorities. These half dimes (originally spelled "half dismes"), were struck in silver. The alloy used was originally .892 silver with the remainder copper; in 1837 the silver portion was increased to .900.
The Civil War caused most American coins to vanish from circulation, with the gap filled by such means as merchant tokens, encased postage stamps, and United States fractional currency, issued in denomination as low as three cents. Although specie (gold or silver coins) was hoarded or exported, the copper-nickel cent, then the only base metal denomination being struck, also vanished. In 1864, Congress began the process of restoring coins to circulation by abolishing the three-cent note and authorizing bronze cents and two-cent pieces, with low intrinsic values, to be struck. These new coins initially proved popular, though the two-cent piece soon faded from circulation. On March 3, 1865, Congress passed legislation authorizing the Mint to strike three-cent pieces of 75% copper and 25% nickel.
In 1864, Congress had authorized a third series of fractional currency notes. The five-cent note was to bear a portrait of "Clark", but Congress was appalled when the issue came out not bearing a portrait of William Clark, the explorer, but Spencer M. Clark, head of the Currency Bureau. According to numismatic historian Walter Breen, Congress's "immediate infuriated response was to pass a law retiring the 5¢ denomination, and another to forbid portrayal of any living person on federal coins or currency." Clark only kept his job because of the personal intervention of Treasury Secretary Salmon P. Chase.
Mint Director James Pollock had been opposed to striking coins containing nickel but in view of the initial success of the copper-nickel three-cent piece, he became an advocate of striking five-cent pieces in the same metal. In his 1865 report Pollock wrote, "From this nickel alloy, a coin for the denomination of five cents, and which would be a popular substitute for the five cent note, could easily be made ... [The five cent coin should be struck in base metal] only until the resumption of specie payments ... in time of peace ... coins of inferior alloy should not be permitted to take the place permanently of silver in the coinage of pieces above the denomination of three cents."