The Bust coinages saw their reign in U.S. coinage end in 1839, with
the minting of the last Capped Bust half dollar and the beginning of
production of the Seated Liberty silver coinages.
Still, despite continued production of U.S. silver coins, foreign
silver coinage, much of it from Spain’s American colonies, maintained
legal tender status in the United States. However, less than 20 years
later, the Coinage Act of 1857 took effect. As a result, the legacy of
Spanish Colonial silver coins in circulation was about to end. In
addition, the 1857 act brought about significant change to the pure
copper large cent.
Much like today, the metallic content of the cent exceeded the
face value of the coin in 1857. Government officials, to stem the
monetary loss from minting the cent, decided to reduce the size and
change the composition to reduce costs and restore profitability to
our basic denomination. We today know the resulting coin as the Flying
The Coinage Act of 1857 also provided for finally removing the
worn Spanish Colonial silver coins still circulating in commerce to
the tune of an estimated $3 million dollars in value.
The Mint set artificially high rates on the redemption of these
pieces to assure recalling as many examples as possible. They were to
be exchanged for new Flying Eagle cents only. The increased profit
from the new cents would offset the premium being paid for the worn
out silver coins.
The new Flying Eagle cents were actually our first “nickels”! They
quickly gained the nickname “nickel” because of the 88 percent copper
and 12 percent nickel alloy used to mint them. They also were not
legal tender, a fact that would soon hurt their popularity.
When they were first issued, the new cents carried a small
premium. People who did not want to stand in long lines to exchange
their silver paid a premium to purchase some of the “new” cents either
for souvenirs or novelty.
Soon the marketplace became inundated with the new small cents,
and because they were not legal tender, stores and banks soon refused
to accept the coins as the overabundance became a nuisance. The cents
ended up trading at a discount of up to 5 percent. Ironically, just a
few years later, all these cents would disappear from circulation
during the Civil War, necessitating issuance of the cent-size Civil
War tokens to keep the economy functional during the war.
The Flying Eagle cents brought much needed silver into the coffers
of the U.S. Treasury Department, as was expected. This silver was then
minted into Seated Liberty coins.
Brad Karoleff is president of the John Reich Collectors Society
and editor of the club’s journal. He can be reached via email at email@example.com.