Definition of Clad Coin
A clad coin is a coin that has multiple layers of metal in it; most current U.S. clad coins consist of an inner core of pure copper, with outer layers of a silver-colored nickel-copper alloy. Examples of this type of clad coin are the U.S. Dime, Quarter, and Half Dollar. The "golden dollar" coins, including the Sacagawea Dollar and the Presidential Dollars, are also clad. They have a pure copper core with clad layers made from a zinc, manganese, and nickel combination.
Clad is different than bimetallic coins. While clad coins have a different metals sandwiched in between two or more layers, bimetallic coins use two or more different metals but are positioned in the coin differently. For example, the two dollar Canadian coin (1996-2011) has an outer ring of 99% nickel and an inner core of aluminum bronze (92% Cu, 6% Al, 2% Ni).
History of Clad Coinage in the United States
Throughout the history of United States coinage, there has been times when the intrinsic value of the metal began to exceed the face value of the coin. One of the most prominent examples was the introduction of the small cent in 1856. Because of the rising cost of copper, the United States Mint was forced to reduce the weight of copper pennies from 10.886 grams of pure copper to 4.670 grams of a copper alloy. If they did not, people would remove the large cents from circulation and melt them for their copper value.
This would have caused a coin shortage of small change.
It was not only copper coins that felt the pressure of external market forces. In the mid-1800s, silver coins also experienced a reduction in weight in order to discourage people from melting coins for their silver content. The same market forces led to a complete overhaul of silver coinage in the United States in the mid-1960s.
Beginning in 1963 and lasting until 1965, there was a severe coin shortage in the United States. At the same time the price of silver bullion was going up while the supply was going down. The United States Treasury Department blamed coin collectors for the coin shortage. In reality, it was common every-day people who realized that the intrinsic value of the silver was exceeding the face value of the coin. This led to people removing the coins from circulation and melting them for their silver bullion value.
Unlike the coins of the mid-1800s, modern coins had to pass counterfeit rejection devices in vending machines. Therefore, the United States Mint had to come up with a alternate metal composition that would have the same properties of a 90% silver coin but would be much cheaper to make. Without accomplishing this key component, the vending machine industry estimated that the conversion of millions of vending machines would take at least five years to handle a new coin composition.
The Treasury Department, consulted with the Battelle Institute which recommended the adoption of a clad metal composition (also known as sandwich metal) that consisted of a thin copper-nickel alloy outer layer bonded to a core of pure copper.
The Coinage Act of July 23, 1965 made this change in metal composition a reality for dimes, quarters and eventually half dollars.
Since the half dollar design was recently changed to memorialize John F. Kennedy the silver composition was reduced by using clad outer layers of 80% silver bonded to an inner core of 21% silver and 79% copper. This led to an overall composition of 40% pure silver in silver half dollars dated 1965 through 1970. Beginning in 1970 one half dollars use the same clad composition as the dime and quarter.
On most U.S. clad coins, if you look at the edge of the coin, you can see the copper core sandwiched between the outer layers of metal.
Edited by: James Bucki