The Coinage Act of 1864 introduced a historic change to currency design and laid the groundwork for modern United States currency. The Coinage Act of 1864 was part of a complementary but distinct Civil War-era monetary reform in the 19th century. Banking and paper currency reform was the focus of the National Currency Act of 1863 and The National Banking Act of 1864.
Key Provisions of the Act
The primary purpose of the 1864 Coinage Act was to change the one-cent coin composition and authorize a two-cent coin for nationwide circulation. Through this act, small-denomination U.S. coinage was brought under federal regulation, discouraging the circulation of private tokens that had contributed to monetary instability during the Civil War.
During the Civil War, the public hoarded gold and silver coins, nearly ending circulation, which led to the widespread use of privately issued “Civil War tokens” and low-denomination paper notes known as “shinplasters.” By prohibiting private minting of one- and two-cent coins and substituting the outlawed currency with Treasury-issued fractional notes, the Coinage Act of 1864 helped to eliminate unauthorized currency. This was a process that also involved other laws and enforcement as well.
Shinplasters are fractional currency. These notes were most likely nicknamed “shinplasters” because the only “value” they held was that the thin paper note could be used for a simple bandage for a sore leg.
Additional legislation and enforcement efforts in the following years contributed to the decline and eventual disappearance of these alternative currencies. Under the US Constitution, Congress holds the exclusive authority to coin money and regulate its value, and it delegates this power to federal agencies such as the US Mint and the Bureau of Engraving and Printing. Both agencies still operate today under the US Department of the Treasury and remain under government control, with no independent authority to issue currency or change policy.
The Two-Cent Piece
The two-cent piece was introduced as a practical and affordable alternative to silver and gold currency. Two-cent pieces are made of copper and a mix of other metals and have a set weight of 6.22 grams. This coin was also the first coin minted with “In God We Trust” inscribed on the obverse.
The two-cent piece was minted in 1864, with the last coin struck in 1872, and discontinued by the Coinage Act of 1873. This coin was not as favored by the public when base-metal coins, such as the three-cent piece and the nickel, became more popular.
Impact on Coinage Design and National Symbols
Congress passed the Coinage Act of 1864 on April 22 during the height of the American Civil War. That same year, the US Mint produced the first coin to bear the inscription “In God We Trust” on the copper two-cent piece. This marked the first official appearance of the motto on United States coinage. “In God We Trust” was initially minted to increase religious sentiment and, in a way, provide moral comfort and unity during the Civil War.
The decision to include the phrase was initiated by Secretary of the Treasury Salmon P. Chase, who instructed James Pollock, Director of the US Mint, to incorporate “In God We Trust” into future coin designs, beginning with the two-cent coin. The Act of March 3, 1865, authorized the motto on coins “that shall admit the inscription,” but not all such coins immediately included it. On January 1, 1866, the motto was minted on gold and silver coins, except for the dime, which was too small for it to be struck at the time.
The Coinage Act of 1864 changed the composition of the one-cent coin and authorized the minting of the two-cent coin. The Director of the US Mint developed the designs for these coins for final approval by the Secretary of the Treasury. The motto was included only by the direction of the Treasury and was not mandated by the Coinage Act of 1864.
The Act’s Legacy and Modern Relevance
The Act of 1864 used the two-cent piece as a financial reform and as a way to express national ideology. Though the two-cent piece was short-lived, the act laid the foundation for future base-metal coinage, leading to the introduction and acceptance of nickels, dimes, and quarters made without precious metals.
