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Nov 3, 2009

War nickels should be in every coin collection!

We frequently think of the Jefferson nickel as not worth the bother. We ignore the design changes of 2004, 2005 and 2006 and move along our hobby road on autopilot. It's dull. It's boring. It isn't precious metal.

Having basically only one type for 65 years contributes to this. In fact, if you look at the nickel as a denomination, it has been remarkably stable since its introduction back in 1866 - no other denomination today is basically the same composition as it was just after the end of the Civil War. There was, however, a brief period when there was another type of nickel, and that period during World War II has left us with an interesting mini-group of very different Jefferson nickels that actually contain precious metal.

Moreover, as the change was a result of the concerns of officials about metals needed to conduct World War II, it can safely be suggested that the war-year Jefferson nickels are a souvenir of World War II. That makes them not only an interesting collection, but also a potential gift for the remaining veterans and families who lived through the period.

The story of the wartime nickels is one of the things that makes them so special and interesting today. Back on Dec. 7, 1941, when the first Japanese bomb fell at Pearl Harbor, the Jefferson nickel was still a fairly new design. Having been introduced in 1938, if you had a pocket full of coins on the infamous day in 1941, odds were good that the nickels in your pocket would have been Buffalo nickels and not the newer Jefferson design.

What those first bombs had to do with the nickels of the United States was probably not immediately clear. It was probably not even clear when a very angry President Franklin D. Roosevelt addressed the Congress asking for a declaration of war. At the time his words were tough, but an objective analysis of the situation might well have questioned whether the tough words of Roosevelt could actually be backed up by the armed forces of the United States.

Even though the United States had been drifting toward war against Germany and Italy or Japan, or a combination of all, the country was still not even close to being ready for a conflict that extended around the globe. Some Americans had gone off to fight anyway, and the industrial power of the nation was being used to supply England and other allies. But realistically on Dec. 7, 1941, the United States was a nation with half a foot of its industrial power planted in wartime preparations while the other was still firmly planted in peace-time activities. It all had to change, and change quickly.

There was no reason for optimism on Dec. 7, 1941. Much of the Pacific Fleet was damaged or sunk. In Europe, the German advance had seen country after country fall, to the point where England would stand alone in opposition to the German might. Certainly the United States would be an enormous help, even though at the time the American military was not considered to be among the top ten in the world. Other, higher-ranked militaries had fallen quickly and sometimes surprisingly easily. Of course, what the military ranking of the time could not measure was the courage and skill of the American military or the will of the American people and the potential of American industry to produce materials needed for a conflict around the globe.

American war planners immediately went to work attempting to project things that might be needed to fight an extended global conflict. It was not a small task. Today we see some of the steps they took. There were special bank notes created that could be easily identified if they were captured by the enemy. Such notes were produced for Hawaii, as there was a real fear that the island would fall to the Japanese and that they might well not stop there. There were considerations about an invasion of California and projections as to how far a Japanese invasion force might get into the heartland of America before it could be stopped. Other special bank notes were created to be carried by soldiers invading Africa, and tests were run on special replacement security paper for bank notes in the event that the supply of regular security paper was threatened.

Coins were another matter, and a serious one. To fight a war, large amounts of certain metals were required. A war so large and potentially lasting so long could potential produce a situation where the metals needed for ammunition, tanks, planes and a host of other things simply were exhausted. Conservation was required. One of the major peace-time uses for metals like copper and nickel was coins, and that saw officials turn immediately to the cent and nickel as coins that needed to be changed.

As it turned out, the copper-coated-steel cents produced in 1943 did not really work. They conserved copper but at the expensive of being unpopular with the public because the cents would corrode quickly. It's ironic to think that a public willing to sacrifice almost all their comforts without complaint was not happy with the 1943 cents.

To officials, the composition of the nickel was the worst of all worlds. The nickel used both copper and nickel, and both were potentially strategic needs. The alloy determined to be a temporary replacement was 56 percent copper which was a significant reduction, 35 percent silver and 9 percent manganese. Amazingly, the new composition of this "nickel" would actually include no nickel.

The decisions were being made in the first months of 1942, and while that was happening regular nickel production would continue. Officials made an interesting decision in that it was decided to have special features on the nickels, which were probably seen as ways of suggesting to the public the composition change. Historically, there had been the use of design elements to indicate composition changes. A reduction in the amount of gold in the gold coins in 1834 brought a completely new design, and there were considerations of other things such as adding the month to the issues to show the public that there was in fact a change. The amount of silver in silver coins had gone both down and up, and in 1853 when it went down and 1873 when it was increased there had been arrows added by the date briefly to mark the change. In 1853 there had also been rays added to the reverse. At other times, however, such as 1864 when the composition of the cent was changed, there were no design changes.

Precisely why officials saw a need to make the new-composition nickels different remains unclear, but the fact is that the mintmark was enlarged and moved to a position from the side of Monticello on the reverse to a place directly above it. In addition, coins made at Philadelphia would carry a "P" mintmark, the first time in history that a U.S. coin made at Philadelphia would have a mintmark.

With its special composition and change in mintmark location, the war-year nickel would take an immediate place along with the 1943 cents as one of very few issues of the United States that could actually be tied to a specific national crisis.

There were changes in composition for the cent, three-cent piece and five-cent piece back at the time of the Civil War although the three-cent and five-cent coins would also continue to be produced in their old silver composition as well. The period would also see the release of a two-cent piece, and as this denomination lasted less than a decade it can be suggested it was also a special crisis denomination. Moreover, the two-cent piece became the first coin to carry the motto IN GOD WE TRUST. This suggestion from Rev. M.R. Watkinson of Riddleyville, Pa., probably received more attention than it might have otherwise simply because of the troubled nature of the times, making it possible to make the case that the two-cent piece in a variety of ways reflected the national crisis at the time.

The crisis of the Mexican War was over but it could be said that the special 1848 quarter eagle with "CAL." on the reverse was a commemorative of that war. In theory the "CAL." was to designate the fact that the 1,389 coins produced with "CAL." in the design were made from the first gold to be received from California, but in fact there was a political message behind the coins. The "CAL." was also seen as showing the public that the war had been worthwhile. The Peace dollar, which made its debut in 1921, was also supposed to commemorate the end of hostilities in World War I. During both of these wars, however, there had been no emergency changes in compositions, so the commemoration was after the fact.

It all makes the wartime Jefferson nickels an interesting group, really a unique set within the larger Jefferson nickel set. For many years there was very little special attention for the war-year nickels because frankly they were available in virtually all grades.

The one exception was the one most did not include as part of a set, and that was the 1943/2-P, which some have suggested was a known error allowed to be released simply in the interests of time and reducing costs at the Mint in a time of crisis. Whatever the real story, the 1943/2-P is certainly better at $50 in G-4, $250 in MS-60, $650 in MS-65 and $1,000 in MS-65 with full steps. Professional Coin Grading Service had seen only 40 examples in MS-65 Full Steps.

The regular dates in a collection are relatively easy to obtain. The mintages ranged from 15,294,000 for the 1943-D to 271, 165,000 for the 1943-P, and those totals were more than enough to make any date possible to find fairly easily in circulation for many years. Supplies today are not as good as in the past. One reason for this is that large numbers were melted back around 1980 when the price of silver reached $50 an ounce. Even with a 35 percent silver in its composition, at that price a war nickel was worth far more than face value. To many, selling them seemed like money from the sky. They tended to darken quickly and with wear would be streaky in appearance or even have a green hue. Although the alloy was fine when newly minted, it really did not age well, and that meant circulated coins were generally not very attractive. That made selling them literally a "no brainer," especially when Mint State examples are available for very little money.

In MS-60 condition, a wartimenickel set is both easy to find and to afford. Prices of the dates, no matter how large or small their mintage, are basically bunched together. The most expensive date is not the lowest-mintage 1943-D, but rather the 1944-D listed at $14 while the 1944-P and 1942-D list at $10. Assembling a set in MS-60 is a possibility for roughly $80, and that's a great deal in a special holder as a present for someone who lived through World War II, and for their family. While not the best grade for a serious collector, the appearance of MS-60 examples will impress virtually everyone, making the set something that will interest everyone. It has a great story behind it, one in which every American of the time can take great pride. For the collector, with such reasonable prices it is almost pointless to settle for MS-60. The MS-65 prices of the wartime nickels seem to be constantly in a state of change, but even so they remain well within the budgets of most. Right now the 1942-P and 1944-P are the most expensive dates in MS-65 at $22.50 while the 1942-S is $20. All the other dates fall in the $13-$20 range. Admittedly that is up from a few years ago when a few dates were under $10, but for a group of coins now 60 years old, in a grade like MS-65, it still has to be seen as a great deal.

The price movements we have seen are generally ones that reflect a greater awareness of the availability of all the dates in top grade. In the past, prices basically followed mintages, but availability in grades like MS-65 does not always follow mintage patterns. We see that in almost every type of U.S. coin where a higher mintage date for one reason or another is much tougher than expected in MS-65. That is the case with the war-year nickels as well. A date like the 1944-P, which had a higher mintage of 119,150,000, has turned out to be a tougher date in MS-65. We have also seen a price increase in the 1943-P, which was $6.50 in 1998 but which is now $15 in the same grade. It makes sense as the 1943-P has appeared at PCGS less often in MS-65 than other lower-mintage dates like the 1944-D or 1944-S.

The situation with the 1944-P, however, remains especially interesting. It was a date with a large 119,150,000 mintage, but when you check on the number of times it has appeared in top grades at PCGS, you find the 1944-P had 196 appearances in MS-65, a figure lower than other top dates like the 1942-P and 1942-S which have been seen 203 and 204 times, respectively. Obviously the numbers are close, but it certainly suggests that, despite its high mintage, the 1944-P deserves to be among the most expensive dates in MS-65.

For those who want the very best, the wartime Jefferson nickels are still possible. In MS-65 with full steps all are available. The key in that condition is the 1945-S, which is ironic as it is one of the lower-priced dates in other grades. There is no mistake in its $250 listing in MS-65 with full steps as PCGS reports about 80 examples, safely below the other dates.

Some of the better MS-65 Full Steps war-year nickels include the 1944-S, now at $185, along with the 1942-S and 1945-P, which are both at $125, with the 1944-P rounding out the group at $100 more with a listing at $100.

Whatever the grade and whatever the purpose, whether to assemble a set as a gift, or for yourself, or as part of a regular Jefferson nickel set, it is safe to say that the wartime Jefferson nickels are a fascinating and historic group that should be in virtually every collection.

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