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The E-Sylum:  Volume 9, Number 39, September 24, 2006, Article 13

DICK JOHNSON'S DRAMATIC SOLUTION TO THE RISING COST OF CENTS

Dick Johnson writes: "The fact it costs more than a cent to
manufacture a cent is causing problems not only in the U.S. but
in all dollar denominated countries across the world. It calls
for a dramatic solution.

Here is that dramatic solution! At 11:59 some Saturday evening
the government should proclaim all cents and nickels are revalued
at 10 cents. We would all wake up next morning to read in our Sunday
newspapers that we are all a little richer. All cents, nickels and
dimes are to be valued at 10 cents at 12:01 that Sunday AM and for
all time in the future.

Thereafter all final cash transactions are to be priced "rounded
down" or "rounded up" to multiples of 10 cents. Prices could still
be quoted in cents, it is just the final price to be rounded off.
Complaints that goods would cost more would be unsubstantiated. It
would virtually even out in the end for everyone, buyers and sellers.
A few cents different perhaps? So what! We all made a profit on
the increased value of the cents and nickels in our possession at
the time of reevaluation.

In a few weeks everything would all straighten out. The government
would immediately stop its loss in striking these coins. And the
efficiency to the overall economy would benefit everyone in the
long term. Millions of dollars in savings!

Our economy has advanced to the point the cent coin is indeed
unnecessary. It has become obsolete like the "mill" denomination
(we haven’t used mills since the depression of the 1930s). Our
economy has advanced many percent since Thomas Jefferson created
our coinage system and named these denominations in 1784. Yet,
we are still using 200-year old coin denominations!

But why revalue the nickel? Well, it is inevitable the same thing
would happen shortly to the nickel that happened to the cent if
it hasn’t already – the cost of making these coins is more than
their face value. Let’s get it over with right away! Revalue both
at the same time. All at once!

Who would it help? Coin collectors for one, savers with all those
piggy banks full of cents, regular citizens who religiously tossed
their small change on the top of the dresser every night until the
pile got so high they had to be scooped off into jars. Also retailers
who had a stock of coins on hand for their cashiers, banks with their
stock of coin rolls in their vaults, the Federal Reserve with their
vast holdings. Who else? Perhaps others.

But who would it hurt? The Japanese for one. They have two ships anchored
in the Delaware Bay anticipating that they could move in, buy up all
the U.S. cents at face for the scrap value of the zinc and copper in
all those coins returned to the Philadelphia Mint. They would have to
send those ships back to Japan empty of any coin cargo.

Who else? Well the manufacturers of the zinc strip who blank and
copper-coat those cent blanks would scream loudly – the companies
themselves, their trade associations, their lobbying group, Americans
for Common Cents. But they would be crying before they were hurt. If
they would calmly sit down with mint officials and help devise a new
coinage system, they could partake in a program that could result in
far more business than they have now making cent blanks. Would you
manufacturers be happy making the blanks for a new 50-cent piece?

How about vending machine companies with their millions of vending
machines? Not too many accept cents or nickels. They are too busy
retrofitting their machines for dollar coins – or worse yet – paper
currency.

Cashiers could put all cents, nickels and dimes in the same compartment
in their cash drawers. That would leave a couple compartments open for
dollar and half dollar coins. There will be more demand for these coins
than before for an active commerce of the future. The Mint should
cease manufacturing cents and nickels for circulation that Sunday.
Monday morning halt striking all cents and nickels. Withdraw all
cent and nickel dies. They could take their time striking dimes since
there is already in existence three times the current need for a
10-cent piece.

The coins would continue to circulate until they wear out (as intended)
and save billions and billions of dollars recalling, shipping, scraping,
melting, recasting, rollowing, blanking and recoining those old coins
into new coins! There would be NO coin shortage at any time under this
plan. Put those idle presses that used to strike cents, nickels and
dimes back to work striking halves and dollar coins.

They could proof polish those existing cent and nickel dies and use
these to strike proof coins for collectors. They could charge up to
thirty times face value for these coins – they already do that for
dollar coins anyway. The fact the dies were worn somewhat doesn’t
matter either. Regular proof coins look that worn today anyway. That
should satisfy collectors and halt their complaints.

The Treasury department should immediately form a think tank of the
best experts for analyzing the future of American coins. Consider:
what denominations, what size, what compositions, what designs,
what new innovations, how to cut costs, how to speed the distribution
system from mint to retail stores, incorporate new anti-counterfeiting
devices, and put coins to new uses. Give me a call at (860) 482-1103.
I already have 20 pages of these ideas.

Meanwhile, E-Syluminaries, you read it first here on E-Sylum. Start
setting aside rolls of cents and nickels. Smart money is on the cents,
of course, since they will increase in value tenfold, nickels only
double in value.

It is inevitable. We must abolish the cent AND the nickel -- at
one-cent and five-cent value! Just don’t abolish the existing coins."

  Wayne Homren, Editor

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