In 1851, a coin with the odd denomination of three cents was introduced. Originally minted in silver, the main purpose of these small coins was to facilitate the purchase of first-class postage stampswhich sold for three cents at the time. During the economic turmoil of the Civil War, silver coins were hoarded and melted down for their precious metal content. Congress countered this by issuing paper money in three-cent denominations, but the small slips of paper became ragged and dirty, and the public came to hate them.
The solution came in the form of a nickel-copper alloy three-cent coin. Larger than the original silver version, the new nickel-copper alloy coin was called the three-cent nickel. It was introduced by the United States Bureau of the
Mint in mid-1865, just after the North finally claimed victory over the South in the Civil War and President Lincoln was assassinated at Ford's Theater. Designed by James B. Longacre, one of the greatest coin designers in American history, the newly designed three-cent nickel featured an engraving of Lady Liberty wearing a coronet bearing the name LIBERTY and a ribbon binding her hair. For the reverse, Longacre placed the Roman numeral III within a laurel wreath. The three-cent nickel was very popular when it first entered circulation. The coin was only minted in Philadelphia and its design remained basically untouched for its entire run. But by 1889, postal rates had changed and the pretense for needing a three-cent coin ended. The denomination was discontinued and millions were returned to the Mint to be recoined into Liberty five-cent nickels.
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