Congress authorizes the five-cent nickel coin (1866)

The United States Congress authorized the five-cent nickel coin on May 16, 1866, eliminating the silver half dime. This legislation followed the abolition of fractional currency notes and the introduction of base-metal coins during the Civil War. Mint Director Pollock had proposed in his 1865 report that a five-cent coin be struck in base metal only until specie payments resumed.

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Background and detail

Background. The half dime was a silver coin valued at five cents, formerly minted in the United States. During the Civil War, most American coins vanished from circulation, creating a gap filled by merchant tokens and fractional currency. In 1864, Congress began restoring coins to circulation by abolishing the three-cent note and authorizing bronze cents and two-cent pieces.

Legislative Process. Industrialist Joseph Wharton, who held a near-monopoly on nickel mining, sought to promote its use in coinage. Powerful interests successfully lobbied for the creation of new three and five cent coins made of a copper-nickel alloy. The bill authorizing the five-cent piece passed without debate on May 16, 1866.

Coin Specifications. The new copper-nickel coin was legal tender for up to one dollar and would be paid out by the Treasury in exchange for coin of the United States, excluding the half cent, cent, and two-cent. The initial design, the Shield nickel, was struck from 1866 until 1883.

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