Pique the Geek 20091122. US Coin Facts

(9 am. – promoted by ek hornbeck)

United States coins have traditionally been forged and minted with gold, silver, and copper.  Very small amounts of other metals have also been added to improve the wearing properties of the coins.

Gold, silver, and copper, in their pure states, are actually too soft to make good coins, in that they wear must too fast.  The chemistry of good alloys is a fascinating part of numismatics, the study of coins.

When the Union was formed, Alexander Hamilton was named Secretary of the Treasury.  He was very hard core about having real currency, backed by precious metals.  He had seen the reduction in value of the paper notes issued by the Continental Congress, and was intent on having a real source of value in the money supply.  By the way, the phrase “not worth a Continental” is directly a result of the close to worthless paper notes that the Nation issued at the time.

However, there was no choice than other to issue promissory notes during the Revolutionary war, because the stocks of gold, silver, and even copper were next to nothing.  Hamilton was vehement that those notes be paid off within a few years after the end of the war, and they were.  He was an extraordinary example of a public servant, and I hope that his image stays on the $10 bill, even though he would be violently ill that a set of private banks issue it now.  But that is a topic for a different essay.

So, here we go into minting coins.  Hamilton was very rigid about using the dollar standard, and cleved it into milles (1/1000 of a dollar, still in use as the “millage” rate for real estate taxes), half cents, cents, dismes (we call the dimes now) and half dismes.  In addition, multiples of the dollar including a quarter eagle ($2.50), half eagle, and eagle were commenced.

In 1792, the first half dismes were minted, the first US coins after the Union was formed.  George Washington provided silver bullion or dinnerware (it is not clear which or some of each).  They were smaller than the current dime at 16.5 mm, and were 89.24% silver and 10.76% copper, to harden the silver and improve wearing properties, and weighed 1.35 grams.  A modern dime, for comparison, has no silver in it with a weight of 2.27 g and a diameter of 17.9 mm.  These were pattern pieces, not intended for circulation.  The mint issued coins for general circulation starting in 1793, and were pure copper half cents and cents.  Cents were big then, weighing 13.48 grams with a diameter of 26 or 27 mm.  For contrast, a modern half dollar weighs 11.34g with a diameter of 30.6 mm.  It is no wonder why these were called large cents.

Thus in the early days coins were all copper or gold or silver alloyed with copper.  Large cents and half cents were minted through 1857, when the cost of the copper in them became too high for such a large coin.  Keep this in mind, because it happens over and over.

The original idea was for the public to turn in gold and silver, in whatever form, and for the mint to refine it and return coins to the donors, with the government absorbing the costs of refining and minting.  The government decided to buy copper on the open market for half cents and cents.

The half cent was struck on the insistence of Hamilton.  He was adamant that subsidiary coins be available to poor folks, to keep them from trying to use pieces of Spanish dollars or tokens locally minted.  Before the US mint, either British coins or especially Spanish ones were used.  We still use the term “penny” for cents, although the United States never minted a coin called a penny.  Likewise, we still use the term “two bits” for a quarter, because of the old practice of cutting up Spanish dollars into eight pieces, each worth 12 1/2 cents.  A quarter was two “pieces of eight”, or two bits of the coin.

Copper and the gold and silver alloys are pretty good coin metals (although pure copper is a little too soft), because they do not corrode readily, are fairly hard so that they wear pretty well (except for the pure copper), but are soft enough to strike an image readily onto the surface.  About the only thing that will harm these alloys is concentrated acid, and gold coins are even resistant to that.

It is interesting that the copper coins had plain edges whilst the silver and gold ones had (and still do, even there is no silver of gold in them any more) ridges, called reeding, on the edges.  This was to prevent folks from filing or scraping tiny bits of precious metals off of coins.  Before reeding (not a US invention) was introduced, coins became progressively smaller and lighter as people shaved them.  Reeding is still in place now just for historical reasons.  It also is a tactile way for those with poor vision to tell their coins apart.

Only minor changes in alloys occurred until 1857.  Silver and gold were standardized at 90% precious metal and 10% copper, and this had very little effect on how the alloys performed.  In 1857 the half cent was eliminated and the cent was reduced in size to the diameter of the coin today, although it was a little thicker.  The interesting thing is that these new cents were 88% copper and 12% nickel, and were yellowish rather than the deep red to which we are accustomed.  That lasted only a few years, and the bronze alloy of 95% copper, 3% tin, and 2% zinc were adopted in 1864.  Except for disturbances during World War II, this allow was used through 1962.  In 1963 the cost of tin was too high to use it in a coin, so it was dropped and the zinc content increased to 5%.

During World War II the cents minted in 1943 were all zinc plated steel (except for a few very rare ones that were struck on bronze).  This marked the first time in US history that a coin was struck without any copper in it.  It also marked the first time in US history that the interior of a coin was different from the exterior.  In 1944 there were enough spent shell casings to use for cents, with the addition of some extra copper to obtain a 95/5 copper to zinc ratio.  The tin was added back in starting in 1947 until 1963.  Silver coinage was not affected.  As a matter of fact, the US had lots of silver, so much that some of the silver reserves were made into electrical wire and loaned to industry for motors needed for the war effort to free up copper for munitions.  After the end of the war the silver was returned to the government.

The five cent piece began with a silver half disme, as stated before, but 1866 a new five cent piece was introduced.  It was composed of 75% copper and 25% nickel and this is the alloy still used today.  The nickel hardens the alloy very well, so the nickel has a very long circulation life.  It is not unusual at all to find nickels over 50 years old in general circulation.

Because nickel was needed to make armor, it was eliminated during the period between 1942 and 1945.  Instead, the alloy was 56% copper, 35% silver, and 9% manganese.  This alloy was softer and darkened badly.  You can tell the war time nickels because they have a very large mint mark over the dome on the reverse.  This series also marked the first time that a “P” was put on a coin for the Philadelphia mint.  The reason was that after the war they would be easy for the Mint to spot them and take them out of circulation to get the silver back.  In 1946 the 74/25 copper nickel alloy was resumed.  More about the nickel in a bit.

The real change in US coins came in 1965, when silver was removed completely from dimes and quarters, and greatly reduced in half dollars.  Instead, a core of pure copper was clad with the same 75/25 copper nickel alloy that nickels have.  At first the cladding was attached by the process of explosive bonding, where a sheet of copper was sandwiched between two thin sheets of the alloy and both outer surfaces were coated with high explosives and detonated, producing a strong bond.  Then the sheets were rolled to the desired thickness and the blanks cut out of them.  Half dollars from 1965 through 1970 were made with an outer cladding of 80% silver and 20% copper, bonded to to a core of 20.9% silver and 79.1% copper.  In 1971 they changed the composition to be like the quarter and dime.

The reason for this change was the high cost of silver, making coins more valuable as metal than as money.  When the clad coinage was introduced in 1965, it did not take long for the silver ones to disappear from circulation.  The Mint collected as many as they could, and speculators took care of most of the rest.  Now it is very unusual to find real silver in circulation, but it happens now and then.  Most people do not know that 1965 through 1970 halves are 40% silver overall, so you can still find them if you go to the bank and buy up rolls and search them.

The Mint operators knew that it would be extremely difficult to keep up with demand for the clad coins because of people pulling silver out of circulation, so they did a few things to compensate.  First, in 1964 the output of nickels went from 453 million to almost three billion.  Second, the output of cents went from about 2.5 billion in 1963 to almost around 6.5 billion in 1964.  For the next three years, 1965 through 1967, production of the new clad quarters spiked.  From 1965 through 1967 no mint marks were put on any coin to discourage collecting until the change supply stabilized.  Mint marks, except “P”, reappeared in 1968.

The next big change in coins happened in 1982.  The composition of the cent, due to the high cost of copper was changed from 95% copper and 5% zinc to 97.5% zinc and 2.5% copper, mostly in the form of plating over the zinc core.  The were sneakier this time, by plating the entire surface of the coin so the edges did not show.  Chemically, the zinc cents are not very good.  As soon as the copper plating (about as thick as kitchen aluminum foil), the very reactive zinc is exposed to the elements.  If they get wet for very long they corrode, and their appearance becomes poor rapidly in circulation.  I often find the old formulation coins from the 1950s through the 1970s that look just like they came from the Mint.  On the other hand, finding nice circulated zinc ones even from the 1980s is unusual.  The pure copper coating as softer than the old alloy and wears badly.

Dollar coins, never very popular, were at first minted with the same cladding as dimes and quarters, but beginning in 2000 the Sacagawea dollar replaced them.  These coins (and the Presidential ones) have a core of pure copper with all external surfaces clad in a brass of 77% copper, 12% zinc, 7% manganese, and 4% nickel.  This allow tarnishes fairly readily, but makes a pretty coin when they are new.  For some reason, Americans have never liked dollar coins (the silver dollar was very unpopular in its day because it is so heavy), so they do not see much general circulation.

Remember when I said that I would have a little more to say about the nickel?  The five cent piece is now the only coin minted in the United States that is the same composition all the way through.  All other circulation coins (called “business strikes” in numismatics jargon) have a relatively inexpensive core overlaid with another metal or alloy, when the first clad coin in US history was introduced by extreme war effort demands in 1943 and lasted only a year.  It makes me wonder about whether or not coins have much of a future.  They are tokens, just like paper money or electronic records, but they are expensive.  It will be interesting to see if in a couple of decades business strike coins will even still exist.

The Mint still strikes silver and gold coins, but not for circulation.  These are the bullion coins, and unlike “collectible” coins are eligible for tax-sheltered retirement investments.  It is the metal content rather than the rarity that makes these coins valuable.

The silver bullion is 99.93 % silver and 0.07% copper (not enough to harden it significantly, but since they are not meant for circulation it does not matter).  The Mint makes two different formulations of gold bullion coins.  The one with the walking Liberty on it is 91.67% gold, 3% silver, and 5.33% copper.  This is close to the old 90/10 formula for circulation gold coins, and the color is excellent.  However, there was demand for a pure gold coin.  Canada has been producing the Maple Leaf of 99.99% gold for years, and a couple of years ago the Mint started up the American Buffalo one at 99.99% purity.  These coins are very soft and have to be protected or they will scratch.

Likewise, the Mint also produces 99.95% pure platinum coins, once again for its bullion content.  Most people who are familiar with jewelry grade platinum think of it as extremely hard, but that is because it is normally alloyed with 10% iridium, which makes the alloy extremely hard.  Pure platinum is soft, like pure gold, and must be handled carefully.  But they do not tarnish.

I should mention that the Mint still strikes dimes, quarters, and halves out of 90% silver and 10% copper, just like the old circulation alloy.  These come in the Silver Proof Mint sets that are available annually.  I have heard rumors that they plan to mint a 95% copper 5% zinc cent for those sets, but have not confirmed it.

Well, you have done it again.  You have wasted another perfectly good set of photons reading this minutiae.  And even though Republicans stop advocating tax cuts when they read me say it, I always learn much more than I could possibly hope to teach writing this series, so please keep questions, corrections, comments, and other remarks coming.  Remember, no technical or scientific issue is off topic here.

Warmest regards,

Doc

Crossposted at Dailykos.com