Why is the US nickel larger than the dime?

Actually, the first five-cent coin in U.S. history was made of silver and was smaller than today’s dime. That’s because when coins were first produced by the U.S.

TIM FACTS! – Why are dimes so small?

Why Are Dimes Smaller Than Pennies?

Things get even more confusing when you consider the dime. Worth ten cents, the dime is not ten times bigger than the penny. In fact, its actually smaller! What kind of sense does that make? Why in the world would the dime be smaller than the penny if its worth ten times as much?

Eventually, other coins, such as nickels and pennies, were needed to make transactions easier. However, the dime was already so small that it made designing these new coins difficult. After all, could you imagine a nickel half the size of a dime? Worse yet, how would you ever keep track of pennies that were one-tenth the size of a dime?

Over time, other coins were created in smaller units, including half-dollars, quarters, and dimes. Each of these new coins was created so that it would contain the correct amount of silver relative to the dollar coin. Thus, the dime had to be rather small, since it only had one-tenth the amount of silver that the dollar coin had.

Why is the dime smaller than the nickel?

Today the size relationship between United States coins still exists but for reasons of tradition only. Also, none of our current coins are legal tender and no one is obligated to accept them as money. Money’s definition has changed radically over the years and now only paper money in the form of Federal Reserve Notes are considered legal tender.

For money to be intrinsic, a dime had to have virtually 10 cents worth of silver, a quarter had to have virtually 25 cents worth of silver, etc. In the early days of the country the precious metal content of U.S. gold and silver coins was too high in relationship to precious metal prices in Europe and massive amounts of coins were melted, sold in Europe and resold back to the United States. The U.S. reduced the precious metal content in 1834 and then in silver coins in 1853 and then was able to keep coins in circulation. Half dimes, dimes, quarters, half dollars and dollars were struck in .900 fine silver and their value, size and weight were proportional (less a small amount of seigniorige to help defray the Mint’s cost of producing the coin).

The copper-nickel 5 cent was introduced as a token coinage in 1866 as was made larger for practical reasons. Though tiny, silver half dimes continued to be produced until 1873 the larger copper-nickel coin was easier to handle and less likely to be lost. (Note that only precious metal coins had reeded edges. Base metal coins had plain edges)

The United States used to have an intrinsic monetary system that relied on circulating precious metal coins for commerce. Coins were “the money”. The United States really didn’t have a national paper money system until 1861 and that was controversial because they were “Legal Tender” notes, not redeemable for coins. This fiat money was one way the United States raised funds to carry on the Civil War. Paper money redeemable for gold and silver coins were restored after the war but the paper was only a receipt for coins.

After 1964 virtually all precious metals were removed from the U.S. coinage system (a lower content, 40% silver half dollars continued to be produced until 1970) and the entire coinage system became tokenized. Coins were produced that mimicked the look of the old precious metal coins by the clever use of a copper-nickel sandwich with a pure copper core and a reeded edge. This composition is known as copper-nickel “Clad” coinage. The cent and nickel remained the same composition as before. The cent was further debased in 1982 by replacing copper planchets with zinc and then plating them with copper.

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