The Shield Nickel was designed by James B. Longacre and was entirely produced at the Philadelphia Mint. Its original purpose was to replace the five-cent fractional notes nicknamed “shinplasters” and silver five-cent (half-dime) coins which, because of hoarding and melting, had virtually disappeared from circulation during the Civil War.
Once again, after creating the Three-cent nickel a year before, the government forged a business relationship with Joseph Wharton, a Philadelphia industrialist who gave his name to the famous business school located in that city. Wharton who owned nickel mines in Canada. His political influence again allowed for a quick passage by Congress, and the Act of May 16, 1866 decreed that the five-cent coin should be minted immediately, much to the frustration of mint officials who found the metal very difficult to work with.
Although the nickel five-cent piece weighed more than twice the nickel three-cent piece, Mint officials approved of its production with the understanding that the nickel would be phased out once specie payments were resumed. Instead, silver five-cent pieces (half dimes) were discontinued entirely after 1873, and the Shield Nickel became our official five-cent piece. Shield Nickels were struck in two distinct Varieties. These include:
- 1866-1867 Shield, Rays on Reverse Type
- 1867-1883 Shield, Without Rays Type
The entire issue of 1866 and part of 1867 have rays around the 5 on the reverse. The rays were later removed with the intention of reducing die breakage and the rest of the series was struck without them. The Mint had considerable difficulty working with the new hard copper-nickel alloy, as exemplified by the many planchet defects, die cracks, and weakly struck pieces that survive today.
Every one of the 18 dates in the series was minted in proof condition, however, with 1877 and 1878 being proof-only years. Oftentimes, complete sets are traded or assembled in Proof condition and can be superlative investments when purchased correctly. Perhaps one of the dozen or so most sought-after five-cent pieces is the 1867 Rays nickel in Proof condition. Mint records show that only 25 coins were originally minted and delivered on February 5, 1867. Of this mintage, perhaps 12 coins survive. When the coin appears for sale at public auction it commands a minimum of five-figures no matter what the grade.