1863-S

San Francisco produced 100,000 half dimes in 1863, the first year of branch mint half dime production since the 1860-O and the first S-mintmark half dime in the series. The San Francisco Mint had opened in 1854, primarily to handle the gold from the California mines, but by 1863 it was also producing silver coinage to serve the western economy. Unlike the eastern states, where silver hoarding had become universal by 1862, California remained on a gold and silver standard throughout the Civil War. Paper money was distrusted in the West, and silver coins continued to circulate normally.

The 1863-S is the first of a long run of San Francisco half dimes that would continue through 1873. It is significantly more common than the Philadelphia 1863 (100,000 versus 18,000 coins) and is typically found in circulated grades. The S mintmark on the reverse identifies the coin as San Francisco-struck.

The coin illustrates the geographic split in Civil War monetary conditions. In the East, greenbacks and fractional currency were replacing silver coinage in daily commerce. In the West, silver half dimes continued to circulate freely because the hoarding phenomenon never took hold in the same way. California's preference for hard money kept the San Francisco Mint productive through the war years.