First in an occasional series.
My article, A Platinum Coin to Pay Down the Debt, was written with tongue firmly in cheek, but the US Treasury has come up with some real coins almost as ridiculous. Our first example is the two-cent piece (1864-1873.)
Humans are very predictable. Every time there is some sort of disaster, the first thing that happens is coin hoarding, as people begin pulling all metal coins from circulation to be held against harder times to come later. The thinking is that coins will still be worth something, even if nothing else is.
On Friday, April 12, 1861, Confederate forces began shelling Fort Sumter, plunging the United States into Civil War. The war was to last until June 22, 1865, and, naturally, one of the side effects was to immediately drive all hard currency out of circulation. Gold and silver coins were withdrawn first, of course, but eventually, even the lowly penny was being hoarded, against the day that people would need hard assets in order to buy essentials.
By the beginning of 1863 virtually all US minted coins had disappeared. Resourceful entrepreneurs, however, came up with a replacement, known widely as Civil War tokens. These tokens were the same size as the new Indian Head penny, but were thinner and made from a cheaper bronze material. Many hundreds are known to exist, as dry goods stores, tobacconists, purveyors of spirits, butchers, grocers, and other merchants all issued tokens. Have a look.
The tokens’ success came as a surprise to government officials. Up to then, it had generally been assumed that Americans wouldn’t tolerate money (or money substitutes) whose stated value was greater than the material in them*, but the government soon discovered that far from rejecting the new tokens, the public embraced them, possibly because they were the only “coins” circulating.
* How things have changed — today’s coins contain less than 2 cents of actual metal, regardless of denomination.
Clearly, something had to be done, and leaping into the breach were James Pollack, Director of the Mint, and Salmon P. Chase, Secretary of the Treasury. They immediately applied governmental logic to the problem.
First they decided to change the composition of the penny from the more expensive copper-nickel alloy then in use, to the same bronze alloy as the tokens so pennies could be produced cheaper. Pollack also lobbied for a new two-cent coin, his reasoning being that this new coin would do double the work of the penny, and because of the change in composition, it would be cheaper to make and easier to produce, thereby allowing a higher number of coins to be produced.
The first year of production was 1864, and in response to the incredible demand that Pollack was sure to materialize, some 20 million shiny new two-cent pieces were minted.
Starved for coinage of any kind, Americans readily embraced the two-cent piece when it made its first appearance, however, demand plummeted after the war as other coins began to reappear in circulation. The two two-cent piece sputtered along, with decreasing mintages until 1873, when it disappeared for good.
The one thing notable about the two-cent piece, is that it was the first US coin to bear the motto, In God We Trust.
Up to then, no U.S. coinage had made reference to a supreme being. But that was about to change, thanks largely to the strong religious fervor born of the Civil War. (Naturally, both sides claimed God as an ally.) In 1861, a Baptist minister, the Rev. Mark R. Watkinson of Ridleyville, Pennsylvania, had written a letter to Secretary Chase urging that provision be made for “the recognition of the Almighty God in some form on our coins.” Said Watkinson: “This would relieve us from the ignominy of heathenism. This would place us openly under the Divine protection we have personally claimed.”
Chase took the appeal to heart, and specified the inclusion of some such inscription on the two-cent piece.
After some back and forth, the phrase In God We Trust was adopted. The original phrase was taken from stanza number four of the Star Spangled Banner, by Francis Scott Key: “And this be our motto, In God is Our Trust.”
Congress didn’t stipulate the motto in the legislation authorizing the two-cent piece, they simply gave Treasury officials the authority to go ahead with the inscription, or not. On March 3, 1865, this authority was extended to gold and silver coins and, for the first time, IN GOD WE TRUST was specifically mentioned. Use of the motto wasn’t mandated, until 1908; and even then, the order applied only to gold and silver coins. It wasn’t until 1955 that Congress enacted legislation requiring the inscription on all U.S. coins.
Today, an 1864 two-cent piece in Fine condition can be had for about $25.