The stylish rims you might have noticed on U.S. dimes, quarters, half dollars and some dollar coins are called reeded edges. They’ve been on American currency almost since day one as a way of keeping people honest.
The United States Mint built its first minting facility in Philadelphia in 1792. The following March, it produced its first batch of circulating coins - 11,178 copper pennies. The silver coins that soon followed were linked to a silver standard, per the 1792 Mint and Coinage Act. This meant the “major” coins were at least partially made up of the precious metal (the first dollar coin, from 1794, was 89.25% silver and 10.75% copper). Silver dollars contained about a dollar’s worth of silver, give or take, and the others – half dollars, quarters and dimes – had a proportionate metallic content and size. Half-dollar coins contained ½ the amount of silver as a dollar and were half the size, quarters had ¼ the amount of silver, and so on.
Reeded edges served a two-fold security purpose for silver coins. One, they added an additional, intricate element to the coins that made them more difficult to counterfeit. Two, they prevented fraud.
For as long as coins have been made from precious metal, a fairly common way to make a quick, ill-gotten buck was coin clipping. Clippers would shave off a tiny amount of metal all the way around the rims of a bunch of coins, collect the shavings, then sell them. Working carefully, a coin clipper could trim enough off of coins to make a nice profit, but not so much as to make them noticeably lighter or smaller. A clipper could then still go out and spend his devalued coins as if they were unaltered. Reeded edges ruined this scheme, since a shaved edge would be immediately obvious and alert anyone who received one that something was wrong.
Why don't nickels and pennies have reeded edges? Nickels and pennies are mainly composed of inexpensive metals, so the chances that they would be tampered with are low.
Before their adoption by the U.S. Mint, reeded edges were also used in the UK. When the physicist Isaac Newton became warden of the Royal Mint in 1696, he used reeded edges, among other means, to combat clippers and counterfeiters. Other European coins from as far back as the early 1500s also feature reeded edges.
Due to the abandonment of the silver standard and a worldwide silver shortage in the mid-20th century, the Coinage Act of 1965 authorized a change in the composition of dimes, quarters, and half-dollars, gradually shrinking their silver content down to the present-day 0%. Coin clipping is no longer a problem, but reeded edges are still around, a centuries-old security measure hanging on in an age where people pay for things with their smart phones instead of digging out pocket change. The tenacity is admirable. But why are they still there?
Coins are made by stamping coin blanks with a metal tool called a die. The die is engraved with the negative of a coin’s design, and the positive image is transferred to the coin when stamped. When the coins are struck, a part of the die called the collar holds the blank in place and applies the edge. When the silverless coins were first produced, the government didn’t see any need to make or buy expensive new dies or collars. Keeping the reeding wouldn’t hurt anyone, they figured, so the new coins were struck from the same old dies as the old ones, and reeding continued to be used as a matter of tradition and backwards-compatibility. Newer coins with updated designs (state quarters, new portraits) also have reeded edges. The design element lived to see another day on the new dies because reeding is useful for distinguishing coins by feel as well as appearance, making them more user-friendly for the visually impaired.
If you gather up a bunch of coins, you'll see that not all reeded edges are created equal. The number and size of reeds on coins is not dictated by law, so individual U.S. Mints were long free to make their reeds to their own in-house specifications, leading to distinct style differences between coins from different mints and eras. Rare dimes from the now-defunct Carson City Mint’s 1871-74 runs, for example, have 89 broad, widely spaced reeds. The dimes made by the Philadelphia Mint in those same years have 113 thin, tightly-spaced reeds.
Things are a little more standardized now and the Mint lists its reeding specifications as follows: dimes, 118; quarters, 119; half dollars, 150; dollar, 198; Susan B. Anthony dollar, 133.