Three-cent silver

Although the Mint of the United States had been striking silver coins since the 1790s, they did not always circulate due to fluctuations in the price of the metal. In 1834, for example, half dollars sold on the market at a premium of one percent. The U.S. was then on a bimetallic standard, and though Congress had slightly overvalued silver with respect to gold, enough Mexican silver flowed into the country to produce a rough equilibrium.[1]

By early 1849, most of the silver coins in circulation were small coins of the Spanish colonial real, including the "levy" (one real) and "fip" (half real).[lower-alpha 1] The levy and fip often passed for twelve and six cents respectively in the Eastern U.S. The mint accepted them as payment at a slightly lower figure, but even so, lost money on the transactions as many of the pieces were lightweight through wear. The odd denominations of the levy and fip were a convenience, allowing payment or change to be made without the use of cents, which were at that time large, made of copper, and not accepted by the government as legal tender due to their lack of precious metal.[1] In the Western U.S., the levy and fip were accepted as the equivalent of the silver dime and half dime, although the Spanish pieces contained more silver.[2]

Bullion from the California Gold Rush and other discoveries came to the Eastern U.S. in considerable quantities beginning in 1848. By the following year, the price of gold relative to silver had dropped, making it profitable to export American silver coins, sell them as bullion, and use the payment in gold to buy more U.S. coins. Silver coins consequently vanished from circulation, meaning the highest-value American coin actually circulating that was worth less than the quarter eagle ($2.50 piece) was the half-dollar-sized copper cent, which saw no use in much of the country because of its lack of legal tender status. Early in 1849, Congress authorized a gold dollar to help bridge the gap. Spanish silver coins were the bulk of what was left in commerce for small change, although there was disagreement as to the value to be assigned to them. Additionally, they were often heavily worn, reducing their intrinsic worth at a time when Americans expected coins to contain metal worth the value assigned to them.[2]

In 1850, New York Senator Daniel S. Dickinson introduced legislation for a three-cent piece in .750 fine silver, that is, three parts silver to one part copper (American silver coins were then .900 fine). He proposed to offer it in exchange for the Spanish silver, which would be valued at eight reals to the dollar for the purpose, higher than the going rate. The new coin would weigh three-tenths as much as the dime, but the debasement of the silver would compensate the government for the losses it would take in redeeming the underweight, worn Spanish coins. The three-cent denomination was chosen as it coordinated well with the six and twelve cent values often assigned the fip and levy. The House of Representatives instead considered legislation to reduce the valuation of the Spanish coins to ten cents per real, and to strike a twenty-cent piece, of .900 silver, to facilitate the exchange. Neil Carothers, in his book on small-denomination American money, suggests that the House's plan would have resulted in the Spanish coins staying in circulation, and any twenty-cent pieces issued being hoarded or melted. No legislation passed in 1850, which saw continued export of America's silver coinage.[3]

Impetus for the passage of a three-cent coin came when Congress, in January 1851, considered reducing postage rates from five cents to three. In 1849, House Committee on Ways and Means chairman, Samuel Vinton, had written to Mint director Robert M. Patterson that his committee was considering both reducing the postage rate and instituting a three-cent coin. Although no legislative action was then taken, Patterson had the mint prepare experimental pattern coins.[4] The House committee proposing the 1851 bill included Dickinson's three-cent piece, and provided that it be legal tender up to 30 cents. When the bill was debated in the House on January 13, 1851, New York Congressman William Duer indicated that he felt both coin and stamp should be denominated at 21⁄2 cents, and his fellow New Yorker, Orsamus Matteson, offered an amendment to that effect. The amendment failed, as did every other attempt to change the legislation, including Dickinson's plea, in the Senate, to restore the requirement that the new coin be used to retire some of the Spanish silver. The bill passed both houses, and became the Act of March 3, 1851 when President Millard Fillmore signed it.[5][6][7]

Carothers pointed out the precedent-setting nature of the legislation, the first to authorize an American silver coin containing an amount of metal worth considerably less than its face value:

This almost forgotten statute is one of the most significant measures in American currency history. After resisting for sixty years every attempt to introduce any form of fiduciary silver coinage, Congress adopted a subsidiary silver coin as an adjunct to the postal service, without realizing that the first step had been taken in the relegation of silver to the status of a subordinate monetary material. The new piece was the first silver coin in the history of the United States that was not legal tender for an unlimited amount. Subsidiary coinage had been established, but in a trivial way, by an unworkable law, and at a time when the entire silver currency was flowing out of the country.[8]

Pattern coin struck to Peale's design for the three-cent piece in silver

In addition to striking the pattern coins in 1849, officials at the Philadelphia Mint continued to experiment with three-cent silvers. The matter was caught up in ongoing conflict between Mint chief coiner Franklin Peale, and the chief engraver, James B. Longacre, who each prepared designs. Peale produced a coin depicting a Liberty cap, based on a design prepared by Longacre's late predecessor, Christian Gobrecht, in 1836. Longacre prepared a design similar to the coin that was eventually released.[4]

On March 2, 1851, the day before the legislation was passed, Longacre, with the reluctant permission of Patterson (a Peale ally) sent Treasury Secretary Thomas Corwin samples of his proposed three-cent piece, along with a letter explaining the symbology. Patterson preferred Peale's design, but recommended Longacre's for approval on the ground that it was in lower relief.[9] Patterson, writing to Corwin on March 7, indicated that if the three-cent were struck in .900 silver, it would be hoarded, but as the silver in the .750 pieces was worth only two and a half cents, the Mint would profit via seignorage from coining the new pieces. Patterson also suggested that the New Orleans Mint could be used to strike the new coin.[4]

Despite the provision of the Mint Act of 1837 entrusting Longacre, by virtue of his office, with responsibility for preparing dies, Peale prepared his own and ran off some sample three-cent pieces. Both types of pattern coin were sent by Patterson to Corwin on March 25, 1851, with the Mint director's recommendation that the chief engraver's design be selected. The next day, acting Treasury Secretary William L. Hodge approved Longacre's design.[10] Knowing there was a large demand for the new coins, Patterson thought it best to build up a stock of 500,000 before beginning distribution.[11]

Art historian Cornelius Vermeule, in his book on American coins and medals, considered the silver three-cent piece one of the ugliest U.S. coins, though it "has the redeeming feature of delicate workmanship".[12] Dennis Tucker, head of Whitman Publishing, in 2016 described the coin as "something of a 'Sarah plain and small'."[13] Congress had required, in the authorizing act for the three-cent silver, that the piece bear a design distinct from both the gold dollar and the other silver coins.[14] As Longacre wrote in his letter to Corwin of March 2, 1851,

On so small a coin it is impossible that the device can be at once conspicuous and striking unless it is simple—complexity would defeat the object. For the obverse I have therefore chosen a star (one of the heraldic elements of the National crest) bearing on its centre the shield of the Union, surrounded by the legal inscription and date. For the reverse I have devised an ornamental letter C embracing in its centre the Roman numeral III, the whole encircled by the thirteen stars.[15]

Longacre's original design for the reverse (type 1) was altered when the fineness of the coin was increased in 1854, to aid the public in distinguishing between them. For the type 2 and type 3, (the reverses of which are identical, the only differences between the two types are on the obverse) an olive sprig, a symbol of peace, was added over the III, and a bundle of three arrows, a symbol of war, below it. The arrows are bound by a ribbon.[16]

Large quantities of the three-cent silver, including much of the production from 1863 and later, were held by the treasury and were melted after the coin was deauthorized.[25] The three-cent nickel went the way of its silver counterpart. After years of low mintages and decreasing popularity, it was abolished by the Act of September 26, 1890 along with the gold dollar and three-dollar piece.[34]

The three-cent silver was confirmed as fully legal tender by the Coinage Act of 1965, which proclaimed all coin and currency of the United States good to any amount for payment of public and private debt. By then, that coin had long since disappeared from circulation.[35]

According to Kevin Flynn and Winston Zack in their book on the three-cent silver, "Lower interest [in that piece] means that it is the type of coin [on] which you can find great deals on pricing, even on dates in which rarity is high."[36] According to R. S. Yeoman's A Guide Book of United States Coins, published in 2017, the ones that catalog the highest are the proof issues from before 1858, with the 1854 issue leading the way, listed at $12,000.[29] Not listed is the 1851 proof three-cent silver, of which only one is known, which was last sold in 2012 for $172,500, and once formed part of the Louis Eliasberg collection. Flynn and Zack theorize that this was the specimen viewed by Hodge in approving Longacre's design, as there is no record of its return to the Philadelphia Mint.[37][38]

The 1873 coin, the final issue, was struck in proof only, and is listed at between $825 and $2,000, depending on condition. Most U.S. coins of that year were struck with a "close 3"[lower-alpha 3] in the date, and, following a complaint that the 3 too closely resembled an eight, an "open 3" variety. The three-cent silver exists only as a close 3. Of coins struck for circulation, Yeoman's highest listings are for the 1868, at $11,000 in near pristine MS-66 condition.[29][39]

Yeoman lists all three-cent pieces before 1863 at $40 in worn G-4 condition, except the 1851 through 1853 at Philadelphia ($25). All three-cent pieces from 1863 to 1872 are less valuable in proof than in uncirculated MS-63 condition.[29] Much of the mintage of later dates were melted by the Mint after the end of the series.[40]

The mint mark appears on the reverse, to the right of the III, in the opening of the C that encloses it.

• Blank (Philadelphia Mint in Philadelphia)
• O (New Orleans Mint in New Orleans, 1851 only)

Notes

Citations

Bibliography

Books

• Breen, Walter (1988). Walter Breen's Complete Encyclopedia of U.S. and Colonial Coins. New York, NY: Doubleday. ISBN 978-0-385-14207-6.
• Bureau of the Mint (1904). Laws of the United States Relating to the Coinage. Washington, D.C.: United States Government Printing Office. OCLC 8109299.
• Carothers, Neil (1930). Fractional Money: A History of Small Coins and Fractional Paper Currency of the United States. New York, NY: John Wiley & Sons, Inc. (reprinted 1988 by Bowers and Merena Galleries, Inc., Wolfeboro, NH). ISBN 0-943161-12-6.
• Flynn, Kevin & Zack, Winston (2010). The Authoritative Reference on Three Cent Silver Coins. Roswell, GA: Kyle Vick. OCLC 770720399.
• Taxay, Don (1983). The U.S. Mint and Coinage (reprint of 1966 ed.). New York, NY: Sanford J. Durst Numismatic Publications. ISBN 978-0-915262-68-7.
• Vermeule, Cornelius (1971). Numismatic Art in America. Cambridge, MA: The Belknap Press of Harvard University Press. ISBN 978-0-674-62840-3.
• Yeoman, R.S. (2017). A Guide Book of United States Coins (The Official Red Book) (71st ed.). Atlanta, Ga.: Whitman Publishing. ISBN 978-0-7948-4506-3.

Journals

• Goldstein, Bruce C. (June 6, 2011). "The Power of 3s". Coin World. Sidney, OH: Amos Press, Inc.: 4–5, 14–15, 18.
• Julian, R. W. (July 1998). "The Trime of Our Lives". Coins. Iola, WI: Krause Publications: 52–54.