Q&A: What does the term “racketeer nickel” mean?

The following is excerpted from Clifford Mishler’s Coins: Questions & Answers

Q: What does the term “racketeer nickel” mean?

A: The only indication of value on the first Liberty Head nickels minted in early 1883 was a large letter “V” on the reverse. The coin’s relatively close similarity in size and weight (21.2 mm diameter vs. 21.6 mm; 5 grams weight vs. 8.359 grams) to a five-dollar gold piece prompted some opportunists to reed the edge with a private tooling device, gold plate the coin and pass it as a new type five-dollar gold piece. These gold-plated nickels became known to collectors as “racketeer nickels.” Later in 1883, the reverse design of the coin was altered by adding the word “CENTS” below the wreath on the reverse to eliminate the confusion. While only about 5.5 million of the “without cents” version was produced, in contrast to slightly over 16 million “with cents,” the latter are worth roughly three times as much as the former in all grades, except that “without cents” Proofs are slightly more valuable than those “with,” the respective mintages being 5,219 examples of the former and 6,783 examples of the latter.

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