When the Buffalo nickel had been struck for 25 years and could be replaced without an act of Congress, the Mint moved quickly to replace it. Although the Fraser design is popular today among numismatists, it did not enjoy that status in 1938, and there was no public outcry at the decision. In January 1938, the Mint announced an open competition for the new nickel design, with the winner to receive a prize of $1,000, equal to $ today. Anticipating the 1943 bicentennial of
Jefferson's birth, competitors were to place his portrait on the obverse, and a depiction of his house
Monticello on the reverse. On April 24,
Felix Schlag was announced as the winner. His design featured the portrayal of Jefferson which would be used on the nickel until 2004, closely conforming to the former president's bust by sculptor
Jean-Antoine Houdon, which is to be found in
Boston's Museum of Fine Arts. However, the model differs from the nickel that was struck for circulation because it featured a view of Monticello from an angle, and a style of lettering officials did not like; Schlag was required to change both. Either through a misunderstanding or an oversight, Schlag did not include his initials in the design; they would not be added until 1966. Production began on October 3, 1938; they were released into circulation on November 15. According to contemporary accounts, the Jefferson nickel was initially hoarded, and it was not until 1940 that it was commonly seen in circulation. With the entry of the United States into
World War II, nickel became a critical war material, and the Mint sought to reduce its use of the metal. On March 27, 1942, Congress authorized a nickel made of 50% copper and 50% silver, but gave the Mint the authority to vary the proportions, or add other metals, in the public interest. The Mint's greatest concern was in finding an alloy that would use no nickel, but still satisfy counterfeit detectors in vending machines. An alloy of 56% copper, 35% silver and 9% manganese proved suitable, and this alloy began to be coined into nickels from October 1942. In the hope of making them easy to sort out and withdraw after the war, the Mint struck all "war nickels" with a large mint mark appearing above Monticello. The mint mark P for Philadelphia was the first time that mint's mark had appeared on a U.S. coin. The pre-war composition returned in 1946; all nickels struck since then have been in 75% copper and 25% nickel. In 1966, a small change was made to the design to add the initials of the designer (FS) to the obverse, underneath Jefferson's portrait. In commemoration of that change, two specimen 1966 nickels with the initials were struck and presented to him. Coins struck at any mint between 1965 and 1967 lack mint marks, which were omitted as the Mint replaced the silver circulating coins with copper-nickel. Beginning in 1968, mint marks were again used, and on the nickel were moved to the lower part of the obverse, to the right of Jefferson's bust. From 1971, no nickels were struck for circulation in San Francisco—the 1971-S was the first nickel struck in proof only since 1878.
Westward Journey commemoratives (2004–2005) The Mint had struck circulating commemorative coins
for the United States Bicentennial, giving quarters, half dollars, and dollars struck in 1975 and 1976 a dual date, "1776–1976". After
Canada issued a successful series of
quarters in 1992 honoring
its provinces and territories, the Mint obtained congressional permission to issue a series of US quarters honoring American states; they began to be issued in 1999. In 2002, the Mint began to consider redesigning the nickel in honor of the upcoming bicentennial of the
Lewis and Clark Expedition. Representative
Eric Cantor (
R-
VA) did not wish to see Monticello (located in his home state) moved permanently off the nickel. The resultant "American 5-Cent Coin Design Continuity Act of 2003", was signed into law by President
George W. Bush on April 23, 2003. Under its terms, the Treasury Secretary could vary the nickel's designs in honor of the 200th anniversary of the Expedition and of the
Louisiana Purchase, but the nickel would again feature Jefferson and Monticello beginning in 2006. Unless Congress acts again, every future five-cent coin will feature Jefferson and Monticello. The Mint used Schlag's obverse in 2004, with two new reverse designs. Mint sculptor-engraver Norman E. Nemeth's adaptation of an
Indian Peace Medal struck for Jefferson was the first new design, followed by a depiction by Mint sculptor-engraver Al Maletsky of a
keelboat like that used by the Expedition. The 2005 obverse was struck during that year only, with a design by sculptor Joe Fitzgerald based on Houdon's bust of Jefferson. The legend "LIBERTY" on the obverse was traced from Jefferson's handwriting in drafting the
Declaration of Independence; as the word is never capitalized in that document, Fitzgerald borrowed a capital L from Jefferson's other writings. The reverse for the first half of the year depicted an
American bison, recalling the Buffalo nickel and designed by Jamie Franki. The reverse for the second half showed a coastline and the words "Ocean in view! O! The Joy!", from a journal entry by
William Clark, co-leader of the Expedition. Clark had actually written the word as "ocian", but the Mint modernized the spelling. Another Franki design has, since 2006, been used for the obverse, depicting a view of Jefferson from the front (rather than in profile) based on an 1800 study by
Rembrandt Peale, and includes "Liberty" in Jefferson's script. According to Acting Mint Director
David Lebryk, "The image of a forward-facing Jefferson is a fitting tribute to [his] vision." The reverse beginning in 2006 was again Schlag's Monticello design, but newly sharpened by Mint engravers. As Schlag's obverse design, on which his initials were placed in 1966, is no longer used, his initials were placed on the reverse to the right of Monticello.
Increase in metal values In the first decade of the 21st century, commodity prices for copper and nickel, which make up the five-cent coin,
rose dramatically, pushing the cost of manufacturing a nickel from 3.46 cents in fiscal year 2003 to 10.09 cents in fiscal year 2012. By comparison, a
Canadian nickel (which is primarily made of steel) still costs less than its face value to produce as of 2019. In response, Mint Director
Henrietta Fore in 2004 asked Congress to fund research into lower-cost alternatives to present coinage metals. Although the initiative lapsed when she left office in 2005, in 2010, Congress passed the Coin Modernization, Oversight, and Continuity Act (CMOCA), directing the Mint to explore alternatives to the present compositions of the six denominations, from cent to dollar. In 2011, the Mint awarded a contract to study the issue to Concurrent Technologies Corporation of Johnstown, Pennsylvania. The report in response to the legislation declared that there is no material that would reduce the one-cent coin's manufacturing cost to below one cent, so it was removed from consideration. The report requested additional time to study the issue, ensuring the continuation, for the present, of the existing coinage metals. The Mint expected demand for nickels in commerce to increase from 840 million needed in Fiscal Year 2011 to 1.08 billion in 2015. Meanwhile, in an attempt to avoid losing large quantities of circulating nickels to melting, the United States Mint introduced new interim rules on December 14, 2006, that criminalized the melting and export of pennies (which as of 2013 cost 1.83 cents to produce) and nickels. Violators of these rules can be punished with a fine of up to $10,000, five years imprisonment, or both. The rules were finalized on April 17, 2007. The melt value of a nickel for some time was more than five cents, including nearing over one-and-a-half times its face value in May 2007. Since then, the supply and demand of the coin's composition metals have stabilized. A nickel's melt value fell below its face value from late 2008 through mid-2010, and more recently again from late mid-2012. In February 2014, it was reported that the Mint was conducting experiments to use copper-plated zinc (the same composition used for the United States 1 cent coin) for the nickel. In December 2014, the Mint released its next Biennial report in response to the CMOCA. In it, the Mint declared that plated zinc products did not hold up to steam/wear tests and were rejected for U.S. coins other than the penny. Materials considered "feasible" for the 5-cent coin were nickel-plated steel, multi-ply-plated steel, and potentially another copper/nickel alloy, this time with ~77% copper, ~20% nickel, and ~3% manganese. Further testing was recommended to explore even less expensive alloys that would not require changes to vending machines (as the steel-based materials would require). In February 2023, the melt value of a nickel coin exceeded 135% of its face value. == Proposals for abolition ==