The United States three-cent piece owes its existence to a combination of factors all converging at and around the same time. In 1848 gold was discovered in California at Sutter’s Mill. “Gold fever” gripped the country. Prospectors and fortune seekers alike — the 49ers — flooded in from the east. The strike was so profound that the resultant gold coming out of California saturated the market, and caused the price of gold to drop. The price dropped so far in fact, that the influx of gold disproportionately made silver more expensive as a ratio of its price to gold. Intrinsically, this market condition posed a serious threat to the viability of the nation’s supply of circulating silver coinage. The silver content of half-dimes, dimes, quarters, fifty-cent pieces, and silver dollars became more valuable than the face value of the coins. Speculators realized this, and quickly began to pull the coins out of circulation — hoarding them — and then selling them overseas in bulk as bullion.
At and around the same time, a Congressional committee was exploring lowering postal rates from 5-cents per stamp to 3-cents.
But such concurrent activities presented a conundrum. Copper half-cents and large-cents were not legal tender by law, and were routinely refused by merchants. U.S. cents and half-cents were valued no more in public perception than privately-issued shinplaster currency and merchant tokens. This meant that no legal tender existed which could buy 3-cent stamps, while also being universally accepted by merchants and the public. If the public used a half-dime to pay for a 3-cent stamp, they would receive change with two cents – which was neither acceptable to the public, nor legal tender. But this scenario was moot anyways, since half-dimes were no longer in circulation anyways due to the bullion market.
The Solution: The Act of March 3, 1851 authorized the striking of U.S. 3-cent silver pieces†. This composition was uniquely different than other U.S. silver coins, in that they were comprised of 75% Silver / 25% Copper. Its silver content was low enough to discourage hoarding and bullion speculators from selling them overseas, while at the same time providing a legal tender coin for the public to use to purchase stamps. The composition was such that the intrinsic silver value of the coin was less than its face value.
The new 3-cent “trimes” were minted in large quantities and were readily accepted by the public. As envisioned, they remained in circulation, were not hoarded, and in the west, provided a suitable replacement for vanished Mexican cuartillas (1/4 reales). Their circulation continued more or less for the next decade or so. Testifying to their acceptance and widespread use, many of the examples we encounter today are often quite worn. Ultimately, however, the new coins did become unpopular. They were quite small and easily lost, and through repeated use quickly became filthy.
Enter the Civil War: Beginning on December 28th, 1861 banks on the East coast of the United States suspended all specie payments. This lasted throughout the Civil War, and meant that banks would no longer provide coinage in exchange for paper currency; including Demand Notes.
From that day forward, all forms of silver, including the lesser alloyed 3 cent silvers, were hoarded by whoever had and/or came upon them.
As the war progressed, U.S. copper cents and two cents also disappeared from circulation due to hoarding. The situation grew so dire in the country that merchants had to resort to striking their own private coinage. (This private coinage later came to be known as Civil War Tokens.)
To combat this hoarding, Congress passed the Act of March 3, 1863, which authorized the printing of fractional paper notes in 3-cent denominations. But by 1864, it became apparent that the 3-cent fractional notes were unpopular. The fractional 3-cent notes were tiny, became quickly tattered and filthy with circulation, and were easily lost. (All the while, silver 3-cent coins still existed, but were hoarded and for all intents and purposes, were not in circulation. And those that did make it into circulation were immediately hoarded.)
In concurrence with the switchover of cents to French Bronze, the Act of April 22, 1864 authorized issue of 1-cent, 2-cent, and [non-silver] 3-cent denominations. Yet no 3-cent coins were struck. It wasn’t until the Act of March 3, 1865 that 3-cent pieces were to be struck. And per the act, their composition was to be 25% Nickel/75% Copper. The impetus which enabled its passing was Congress’ extreme hatred and contempt for private tokens, shinplasters, and the 3-cent fractional paper notes.
3-cent nickels coined from 1865 through 1876 were readily accepted and remained in circulation. Most were used to retire the 17 million+ 3-cent fractionals. The remaining majority were used for purchasing stamps. As fractionals were replaced over time, the amounts of 3-cent nickels minted declined proportionally.
Concurrently, until around 1875 silver was still quite hoarded. So while 3-cent nickels were being released into circulation — and were successful — the 3-cent trimes already in the public hands remained out of circulation. And any new ones being struck up to 1873 were severely limited in number. Ultimately, it didn’t matter anyways. The silver trime was abolished by The Mint Act of February 12, 1873.
The 3-cent Nickel was retired in 1889, in concurrence with an increase in postal rates from 3 cents to 5 cents.
Notes and Sources
† During the Hard Times, and later the Civil War, Lewis Feuchtwanger struck private 3-cent pieces. However, like other privately issued tokens, the public regarded them no differently than other shinplasters and other non-legal tender coins.
2011 U.S. Coin Digest – The Complete Guide to Current Market Values, David C. Harper & Harry S. Miller, 2010, pg.54
Walter Breen’s Complete Encyclopedia of U.S. and Colonial coins, Walter Breen, Doubleday, ©1988, pgs.242-275
California State Library Digital Archives
The Library of Congress Digital Archives