The Shield Nickel was introduced in 1866, representing the first five cent denomination struck in nickel. After 1873, the coins became the sole representative of the denomination, following the discontinuation of the half dime. Shield Nickels used the same copper and nickel composition as the three-cent nickel piece introduced in 1865 and were struck in two major design varieties. The final year of the series was 1883, when the Liberty Nickel design would be adopted.
The nickel denomination was born out of the need for circulating small change. In the years before, during, and immediately following the American Civil War, citizens hoarded all circulating coinage for its intrinsic value. It was clear that a solution was needed, and shortly after the war, it was found in a copper-nickel composition.
On March 3, 1865 a bill passed authorizing the production of the 3 cent piece, with with a composition of 75% copper and 25% nickel and weight of 30 grains. Soon afterward, a 5 cent piece of the same metallic composition was suggested by United States Mint Director James Pollock. The House coinage subcommittee suggested a weight of 5 grams (77.16 grains), which was ultimately adopted. The bill was passed on May 16, without considerable debate and the new nickel 5 cent piece was born.
Several different designs were suggested, and a considerable number of patterns were created. The most interesting featured the busts of George Washington (two different varieties) or Abraham Lincoln on the obverse. Although very popular with numismatists today, James Barton Longacre, who designed most of the coinage of the era, decided to choose a simpler design.
The obverse of what would become known as the Shield Nickel, was similar to the 2 cent piece introduced in 1864 with some minor modifications. A large shield was prominent in the design, with horizontal lines on the upper portion and vertical lines beneath. A large cross was placed on top, and arrows were visible to both sides on the bottom. The motto IN GOD WE TRUST was placed above and the date below.
The reverse design featured a large numeral 5 within a circle of 13 stars. For pieces dated 1866 and some dated 1867, rays were placed between the stars, representing the initial design variety Shield Nickel with Rays. In production, the copper-nickel composition proved hard to strike, and the rays increased the metal that had to be flowed on the design, resulting in many weakly struck pieces. The rays were removed during 1867 creating the second design variety Shield Nickels without rays.