The 5-cent denomination has been with us for a long time, but the modern “nickel” really dates only from the time of the American Civil War. The steps leading up to the creation of this useful little coin are almost as interesting as the coin itself. It began, in some ways, during the years before the American Revolution.
Colonists were usually poor and had very little hard money (silver or gold), but some Spanish silver did come their way from time to time. The 2 reales (1/4 of the Spanish milled dollar of 8 reales) was relatively common, but the real and half real were also often seen. The half real, in modern terms, was worth 6.25 cents, which is why many items in America, up until the 1850s, were priced at 6-1/4 cents or 12-1/2 cents (the 1-real piece).
Because the half real was a convenient coin, the Congressional framers of the 1792 mint law included a dime and half dime as being the nearest decimal equivalents to the real and half real. Thus was born the American silver 5-cent piece, though it was then called a half dime.
From 1795 to 1805, there was an erratic coinage of half dimes but they were not all that popular because the Spanish half reals were in common use. After 1805, the Mint threw in the towel and struck
