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Jefferson Design Stood Test of Time
By Tom LaMarre, Coins Magazine
May 15, 2013

This article was originally printed in Coins Magazine.
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Felix Schlag never forgot 1938. It was the year his first wife died, he became an American citizen and his prize-winning design appeared on the first of billions of Jefferson nickels.

Plans for the Jefferson nickel started rolling almost as soon as the Buffalo nickel reached the minimum statutory life of 25 years. The Buffalo nickel was an artistic masterpiece, but it was difficult to strike and portions of the design, especially the date, did not hold up in circulation.

George W. Williams, president of the Baltimore Coin Club, may have come up with the idea of placing Thomas Jefferson’s portrait on a coin. Writing to the Mint director in April 1937, Williams proposed a presidential coin series, beginning not with George Washington but with Jefferson. However, it’s highly unlikely Williams had the nickel in mind.

On Jan. 30, 1938, the Treasury Department announced plans for a Jefferson nickel, or, as the New York Times called it, a “Jeffersonian nickel.” By any name, it was exciting news and not just for coin collectors.

A competition was held for designs. The rules specified that the obverse had to have an “authentic” portrait of Thomas Jefferson, and the reverse a representation of Monticello, his home near Charlottesville, Va.

Entries were to be in the form of plaster models no larger than 8.5 inches in diameter and with a relief no greater than 5/32nds inch. The winner was to receive $1,000, and participants agreed to make revisions required by the Treasury secretary without additional compensation. The deadline for entries was April 20, 1938.

The competition attracted nearly 400 entrants. Among them was Chicago sculptor Felix O. Schlag. “One day in the mail arrived an official-looking letter announcing a design competition,” he later recalled. “That would change my life forever, bringing me undreamed achievement and to the brink of grief.”

Schlag was born in Germany and served in the German army during World War I. He came to the United States in 1929 after winning a dozen European art contests. Although Schlag claimed that he worked as an auto stylist for General Motors in Detroit, there doesn’t seem to be any information about cars he may have helped design.

During the Depression, Schlag worked as a window trimmer, busboy and laborer. According to his own recollection, he was always on the move—New York, Chicago, Detroit, New York and back to Chicago, where he finally opened his own studio.

Schlag made some Jefferson nickel pencil sketches but wasn’t satisfied with the portraits. One night, while browsing in a bookstore, he opened a magazine and found the portrait that ended his search and convinced him to enter the nickel design competition.

Schlag completed his plaster models one day before the deadline and rushed to the train station to get them off in time. On April 21, 1938, he received a telephone call informing him that he had won the competition.

The May 13, 1938, issue of the Cedar Rapids Tribune pictured Schlag’s plaster models. There was also a photo of Ed Bruce, chief of the Treasury Department’s division of painters and sculptors, examing long lines of plaster models submitted in the competition.

Schlag had to make some changes to the reverse before he received the $1,000 check. His original plaster model had a corner view of Monticello with a stylized tree in the foreground and sans serif inscriptions. President Franklin D. Roosevelt reportedly insisted that both wings of Monticello appear on the nickel. Mint Director Nellie Tayloe Ross requested the addition of “In God We Trust,” although it was not required by law and had not appeared on the nickel since 1883.

“Nine suggestions were offered,” Schlag wrote, “and I was advised to submit black and white drawings indicating the revisions. It meant starting all over again.”

The revised design passed inspection in July 1938. The Numismatist said that not a single feature of the original reverse had been retained. The editor called the changes an improvement and said he liked the Jefferson nickel. Lee F. Hewitt, editor of Numismatic Scrapbook Magazine, said the lettering on the reverse was too prominent.

The changes took time. On July 18, 1938, the Mint postponed the Jefferson nickel’s debut until mid-September. However, it wasn’t until Oct. 1, 1938 that Ross instructed the Philadelphia, Denver and San Francisco mints to begin striking Jefferson nickels.

The San Francisco Mint launched production on Oct. 12. The Ellensburg Daily Record said $150,000 worth of Jefferson nickels with the “S” mintmark would to be struck by Nov. 1, 1938.

The Oct. 8, 1938, issue of the Spartansburg, S.C. Herald-Journal pictured the first bags of Jefferson nickels. Also shown were large plaques depicting both sides of the new nickel, which the newspaper said had been “struck off in honor of the occasion.”

Ross resigned a few weeks before the Jefferson nickel went into circulation. The first examples were released Nov. 15, 1938, as reported by the Washington Post, which said there would be no more new Buffalo nickels.

The Nov. 15, 1938, issue of the Painesville, Ohio Telegraph said Jefferson nickels had not yet reached Painesville but would probably be available in two or three weeks. The Nov. 15 issue of the St. Petersburg, Fla., Evening Independent reported that local banks had ordered Jefferson nickels but none had arrived from Federal Reserve Banks.

The Nov. 25 issue of the Reno Evening Gazette said the public was accepting the Jefferson nickel without protest, although coin collectors believed it was not a work of art like the Buffalo nickel. According to one report, some storekeepers suspected the new nickels of being slugs or counterfeits.

On Nov. 24, Thanksgiving Day, a Treasury spokesperson said the department was giving thanks because the Jefferson nickel was a success.

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Many critics had wanted to keep the Indian Head on the nickel, but according to the Evening Independent, nobody had complained about the buffalo’s disappearance. As the Dec. 1, 1938, issue of the Lodi News-Sentinel said, the “vanishing redskin” and “doughty buffalo” were making their last stand on the nickel.

Officials at the government’s Office of Indian Affairs had expected Native Americans to protest the demise of the Buffalo nickel. Surprisingly, there were no complaints.

Meanwhile, rumors abounded about Jefferson nickel “flaws.” There were reports of the “pinkishness” of the new nickels or of Jefferson nickels turning red. A problem in the annealing process may have been responsible.

The depiction of Monticello on the nickel’s reverse was often mistaken for the White House, despite the identifying inscription. It was also said that Schlag had forgotten to put a flagpole and flag on the White House. Treasury officials issued a statement that the nickel pictured Monticello and it wasn’t supposed to have a flag.

According to another rumor, Jefferson nickels didn’t fit in coin-operated machines. Ironically, a similar claim had marred the Buffalo nickel’s debut in 1913.

“I hereby make a formal statement that the Jefferson nickel will not be withdrawn from circulation,” Morgenthau said. “I am aware of no defects.” He added that Jefferson nickels were worth only five cents, no more.

Although Jefferson nickel production began late in the year, the Philadelphia Mint struck more than 19 million in 1938. The Denver Mint turned out more than 5 million, and San Francisco in excess of 4 million. Even so, there weren’t enough Jefferson nickels to meet the demand.

In addition to business-strike nickels for circulation, the Philadelphia Mint struck proofs for collectors. Schlag acquired 150 proof 1938 Jefferson nickels and mounted them on notarized plaques with his autograph and photos of his original plaster models.

Jefferson nickels of any kind were hard to come by in 1939. Early in the year, Morgenthau said that 32 million had been minted, but many were being saved as souvenirs. The July 1939 issue of Numismatic Scrapbook Magazine said that in some parts of the country it was impossible to find a Jefferson nickel in circulation.

The 1939-D and 1939-S nickels proved to be worth saving. The Coins value guide lists them at $105 and $45 in Mint State-65. These values are for specimens having the reverse of 1940, distinguished by even steps instead of the wavy steps of 1939.

The Philadelphia Mint also struck some desirable Jefferson nickels in 1939. The 1939 doubled “Monticello” variety has doubling in the inscriptions “MONTICELLO” and “FIVE CENTS.” Boston dealer Malcolm O.E. Chell-Frost is sometimes credited with discovering the variety. Others say New York City subway token collectors discovered it in the early 1940s. The first published photos of the 1939 doubled “MONTICELLO” nickel appeared in Numismatic Scrapbook Magazine in 1947.

Collectors weren’t the only ones interested in Jefferson nickels. In January 1939, New York District Attorney Thomas Dewey said that at least 26 million nickels had been stolen from New York subway turnstiles. Eight men were arrested, but subway nickel thefts didn’t end until 1948 when the fare was raised to a dime.

The same month that Dewey spoke out, Loew’s Colonial Theater reported that it had counted only six Jefferson nickels so far. The Reading Street Railway, which took in thousands of nickels every day, said it had found only two Jefferson nickels.

In the summer of 1939, Cecil B. DeMille presented a freshly-minted Jefferson nickel to actress Barbara Stanwyck. It was in recognition of her outstanding performance in scenes of “Union Pacific,” the story of a crooked politician trying to stop construction of the first intercontinental railroad.

The movie also starred Robert Preston, Anthony Quinn and Brian Donlevy, but Stanwyck apparently was the only one to receive a presentation Jefferson nickel. The Delaware Sunday Morning Star said she was assembling a Jefferson nickel collection.

Although the Jefferson nickel was a success, it didn’t help Felix Schlag’s career as a sculptor. He was working on several projects when World War II broke out.

Commissions evaporated, materials became scarce, money went for other uses and interest in art was at a low, he later said.

After the Army rejected him because of his age, Schlag opened a photography studio in Owosso, Mich.

In May 1941, during National Coin Week, Ross said the Mint had struck nearly 500 million Jefferson nickels since Oct. 1, 1938, a reflection of the design’s popularity.

At the 1941 American Numismatic Association convention in Philadelphia, reeded-edge Jefferson nickels were available. Possibly they were forerunners of the wartime Jefferson nickels. The government needed nickel for armor plate, and copper for electrical wiring, shell cases and radar equipment. Popular Science said nickel and copper had more important work to do than feeding juke boxes. So the search began for substitute materials for five-cent pieces.

Research chemists recommended an alloy of 50 percent silver and 50 percent copper. They predicted it would save a million pounds of metal each year for defense. However, experimental five-cent pieces struck in the proposed alloy didn’t work well in vending machines.

Instead, Congress approved five-cent pieces composed of 56 percent copper, 35 percent silver and 9 percent manganese. The Bureau of Mines and an experimental manganese plant in Boulder City, Colo. helped the Mint develop the alloy.

A report described it as “the farthest advance in perfection of manganese alloys.” But it had its drawbacks. Five-cent pieces struck in the wartime alloy would tarnish more rapidly. The Mint would need new equipment to strike them, and some means would have to be found to distinguish wartime nickels when the time came to melt them.

Initially, officials considered a reeded edge. As a less drastic alternative, they settled for a large mintmark above Monticello’s dome, including for the first time a “P” for Philadelphia.

An article in the February 1943 issue of Popular Science explained how wartime nickels were made, from plaster models to electrotypes to master dies to working dies. A photograph of an electrotype of the reverse showed a “P” mintmark.

The metals used for wartime nickels were melted in a 1,750-degree furnace and cast into 52-pound ingots instead of the 5 3/4-pound ingots formerly used.

Production of five-cent pieces in the wartime alloy began in October 1942. Nearly 900 million had been minted by January 1946, when the nickel returned to its former alloy.

Demand for nickels surged in 1948. Baltimore led the way, ordering more nickels than any other city.

Years later, a 1948 nickel helped the FBI and CIA break up a spy ring. Soviet intelligence officer Vilyan Genrikhovich Fisher, alias Rudolph Ivanovich Abel, was working for the KGB as part of a spy ring based in New York City. His new assistant, Reino Hayhanen arrived in New York in October 1952.

Hayhanen found a hollowed-out nickel at a dead-drop location he had memorized. But he was a heavy drinker and misplaced it without opening it. He may have bought a newspaper or used it as a subway token.

The hollowed-out nickel circulated in New York City for seven months, until a 13-year-old newsboy dropped it and it broke, revealing a micrograph with a series of numbers.

A tiny hole had been drilled in the “R” in “TRUST” so a fine needle could be inserted to open the nickel. The reverse was taken from another nickel struck from 1942 to 1945.

New York detectives forwarded the hollowed-out nickel to the FBI. Specialists worked on the micrograph for four years but were unable to decipher it.

CIA agents took Hayhanen into custody in Paris in 1957 and were finally able to solve the mystery of the hollow nickel.

Convicted on several counts of espionage, Fisher was sentenced to 45 years in Atlanta Federal Penitentiary. In 1962 the United States government exchanged him for American U-2 pilot Gary Powers.

In 1950, the Denver Mint struck only 2,630,000 nickels. It was the lowest mintage of any nickel since the 1931-S. Speculators went wild. By 1964, uncirculated 1950-D nickel rolls were selling for more than $1,000. Today, a roll of Mint State-65 1950-D nickels would be valued at $800.

In 1954, counterfeit nickels flooded New Jersey, but they were oversize, overweight and poorly made. Although the counterfeits were dated 1944, they were composed of copper, nickel and iron and were missing the wartime mintmark.

Federal agents followed the trail of phony nickels to a clandestine “mint” in Erial, New Jersey. Its operator, Francis Leroy Henning, had already skipped town after dumping hundreds of thousands of counterfeit nickels into the river. Authorities caught up with Henning in October 1955 in Cleveland. He was tried, convicted, sentenced to three years in jail and fined $5,000.

In the late 1950s, Baltimore used more nickels than any other city. It received seven 15-ton shipments a year. Each tractor-trailer carried 670 bags of nickels.

Enjoying cult status even though it isn’t listed in value guides, the 1959 “Black Beauty” nickel was created when planchets were left in the furnace too long after the annealing process.

More than 2 billion 1964-dated nickels were struck, but not all of them were minted in 1964. A date-freeze law, aimed at easing a nationwide coin shortage, enabled production to continue into 1965 and beyond.

In the mid-1960s, the Flint, Mich. Coin Club launched a campaign to place Schlag’s initials on the Jefferson nickel. Schlag had often signed his sculptures with the initials “FOS” in a column, but the Jefferson nickel design competition rules specified that initials were not allowed.

In 1966, the Treasury secretary signed an order making it possible to place Schlag’s initials on the nickel. Mint Director Eva Adams said, “Our engraver at Philadelphia is now busy, getting ready to turn back a bit of the coat of Mr. Thomas Jefferson, so that Mr. Schlag’s initials can be placed on the 1966 and all future issues of this coin.”

At the 75th Anniversary ANA Convention in Chicago, Adams presented Schlag with a 1966 nickel bearing the letters “FS,” the first of its kind.

In 1994 and 1997, the Philadelphia Mint struck proof Jefferson nickels with a matte finish. The 1994-P proof was part of a special Thomas Jefferson commemorative set and had a mintage of only 167,703. The 1997-P proof was included in the Botanic Gardens commemorative set. Only 25,000 were made. In Proof-65 grade, the 1994-P is valued at $58. Coins lists the 1997-P at $160.

Design changes of 2004 to 2006 meant the end of the original Jefferson nickel, which the public had taken for granted for more than 60 years. Now that it’s obsolete, collectors might take a closer look at the nickel that reaffirmed the trend of presidential portraits on coins, helped win a war and rode a wave of popularity that crested in record production.

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