The American Two Cent Coin

It was a coin much like the one you can see in the pictures below that first sparked my interest in collecting coins. It was in a tin cigar box that had come from my grandfather - there were all sorts of old coins in that box - large cents and half cents mostly, some nickels and this - a two cent piece. Just slightly smaller than a quarter dollar, I was impressed by its simple beauty and puzzled by its odd denomination. Two cents?

How odd that was. Why would anyone every think to make such a thing? The oversized large cents were interesting, but this was even more so. So, that's where I started. I bought books about coins, I scrounged the library - this was decades before the Internet, so ferreting out knowledge wasn't easy, but there were magazines I could subscribe to and some local coin dealers I could pester with questions. I learned what had caused these short-lived and very interesting coins.

It turns out that the large cents had a lot to do with how this two cent coin came to be. Those large one cent coins were unpopular, but not for the same reason that todays small cents are.

One cent was not an insignificant amount of money - an unskilled workman earned about 7 cents per hour in 1855 (see Measuring Worth) , so a "penny" was not something you were likely to throw away or leave unnoticed in a dresser drawer.

No, the problem was that the coins were clunky and heavy. It wouldn't take many to weigh down your purse or pocket significantly - a days pay in these coins took up quite a bit of space and would weigh as much as 33 dimes today.

Copper also attracts dirt easily, and although the germ theory of disease may not have been quite so well accepted then as it is now (indeed, it barely existed), complaints about these coins were common.

Merchants didn't like them either, as they were not legal tender and the banks did not want to take them in trade for gold or silver coins. Sometimes merchants had to sell bulk lots at a net loss!

So why didn't the U.S. Mint just make smaller coins?

The answer to that is that prevailing wisdom said that people would not accept money that was obviously worth far less than its nominal face value. These large cents did not contain enough copper to be worth melting down, but they did have real value as metal and the thought was that debasing them too much would cause people to reject the coinage outright.

The U.S. Civil War changed that, in two ways. First, the price of copper increased enough that, while it still would not be worthwhile to melt those coins for scrap, the cost of the ready to mint planchets (many of which were supplied by the Crocker Brothers of Taunton, Massachusetts - very near to where I live now) became perilously close to one cent. As the Mint had stamping and labor costs to add in, the full cost of production would now exceed one cent.

The war also caused a small change shortage. Hoarding, speculation and general worry and uncertainty were all responsible, but of course stores still had to make change for their customers. To solve that problem, many a store produced their own 1 cent tokens (sometimes marked "Not one cent" and the like, and some with political slogans) to be used for that purpose. These are called "Civil War tokens" today and are quite popular with collectors. There were some of those in that tin box also.

Those who assumed people would reject debased coinage must have been quite surprised by that. If the populace would accept these tokens from merchants, why wouldn't they accept a much smaller coin from the Mint? Well, of course they would, so in 1857, the first "small cents" were made for circulation.

These unfortunately did not solve the coin shortage problem and they didn't help the merchants either. It was thought that a two cent piece might help because basically twice as much value could be put into circulation for less than twice the cost. This turned out to be incorrect also and the two cent piece was generally disliked and its production dwindled away rather quickly.

The piece does have one major claim to fame. It was the very first coin to bear the motto "In God we trust". As I was an atheist even when a child, that bit of trivia also interested me. I am always ready to remind those who insist that things be "as the Founders intended" that those Founders never put religious mottos on our money. It was the Civil War that caused that.