Few coins have such an exciting and interesting history that the story even appeals to people with little interest in collecting coins. One of those few coins is undoubtedly the 1883 Liberty Nickel. Representing the first year of issue for the series, the coins were struck in two different varieties, “without cents” and “with cents.” The two varieties were created as a direct result of the public reception of the new design.
Under the Coinage Act of 1792, the Mint had previously struck five cent coins referred to as half dimes with a silver based composition. However, with the rising price of silver and the small size of the half dime, a substitute was favored. The new five cent denomination was introduced in 1866 as the Shield Nickel. These coins carried a composition of 75% copper and 25% nickel and would briefly be struck along side the half dime until 1873. After this date, only the nickel five cent piece was produced.
The Liberty Nickel design by Charles E. Barber was the second type for the nickel five-cent denomination. the obverse design features the head of Liberty, facing left with thirteen stars around. The reverse featured a wreath, with the Roman numeral V within, representing the denomination. E PLURIBUS UNUM, the motto (meaning “out of many one”) is below the wreath, while UNITED STATES OF AMERICA is above. The final design was the result of a number of test pieces (patterns) that were made of various designs and alloys in 1882, which included the design would be introduced in the following year. Except for the Roman numeral, no further indication of the denomination was given on either the 1882 pattern or the regular issue coins struck in 1883.
The lack of a clear indication of the denomination was noted by various individuals outside of the Mint after the coins had been released. Communication was not as widespread in the 19th century as nowadays, and the majority of the population did not read newspapers, or at least not regularly. As such, certain individuals could easily gold-plate the new nickels, sometimes adding edge reeding, and then spend them as if they were $5 gold pieces. This did occur soon after the coins were released, now recounted as the famous story of the “Racketeer Nickels.”
As early as March 1883, newspaper articles began to appear calling for the addition of the word “cents” to the reverse of the coins. This would eliminate the problem of gold-plating the new V-nickels and passing them off as coins of a much higher value. Before the new hubs and dies were ready, however, a large number of 1883 Without Cents Nickels were already released in circulation and people were told to be careful when accepting five dollar gold pieces in commerce. Over time the story of the “Racketeer Nickels” grew and this perhaps explains the popularity of this issue, although few (if any) genuine racketeer nickels survive up to this day.
Stories that have appeared in numismatic magazines include that of a Josh Tatum, a deaf mute who is said to have made at least $15,000 by passing gold-plated and reeded nickels as five dollar gold pieces while buying a cigar (five cents at the time). This story, however, is not supported by much evidence, and appears to be the result of 1960’s numismatic folklore, when it seems to have appeared for the first time.