Dick Johnson submitted these thoughts on the fate of the U.S. one-cent piece.
Canadians, it appears, are more intelligent than Americans. In viewing, at least, the solution to the rising cost of minting a cent coin and its drastically declining value in purchasing power as a circulating coin. The majority of Canadians want to stop using their cent coin. It can still remain a money of account, as all prices remain in cents. It is only the final transaction amount -- Canadians colorfully call this the "tally amount" that will be rounded off to the nearest five cents -- the lowest coin still to circulate.
In a recent poll -- the Angus Reid poll -- 55 per cent of Canadians are ready to "put a nail in the penny's coffin." This mirrors a legislative report earlier last year that recommended abolishing the cent. Only 15 percent think it should be retained. Looks like 2011 will be the last year the Canadian Royal Mint will strike the least useful coin.
Why can't the United States emulate the Canadians in this wise decision? In the latest move the 110th Congress ordered the Treasury Department to find a new composition to make the American cent. Cardboard coins anyone?
The Congressional order came as a result of an American poll that revealed more Americans want to retain the cent. For nostalgia mostly, but for a few other reasons as well: for incidental charity donations, for the belief that rounding off increases prices, and for the very strong zinc industry lobby wishing to retain supplying the copper coated zinc blanks shipped to the mints for striking the low value coin. The Congress action is following, not leading, that's not good management.
Wake up America! That nostalgia is costing you millions of dollars every year. Charities should recognize their incidental donations would increase if the lowest coin available is greater than one cent. A university study revealed the increase cost by rounding off the price at the cash register for an average family is less than a dollar a year. And the zinc industry should lobby to make a higher denomination blank than one cent -- the buggy whip of the 21st century.
Coin collectors who feel the loss of the cent coin would lessen the number of coins to collect need only look at the U.S. Mint's recent marketing of the increasing number of coins issued in recent years. Or the Mint could continue striking the cent just for collectors, like Great Britain has struck the silver one penny for Maundy Coins for centuries. Don't think the Mint will abandon the popularity of the Lincoln cent if they can still market some form to collectors.
Lincoln collectors who feel their idol will be slighted, perhaps fade into oblivion need only to look at the recent increased interest in Lincoln, as exemplified by Fred Reed's blockbuster book on Lincoln. My own firm, Signature Art Medals, is pledged to issue a new Lincoln medal every year. Three of these have already been created and issued. And you should see what is in the pipeline! Look for a stunning Lincoln Inauguration Sesquicentennial Medal in March.
Collectors will not be disappointed if the Lincoln Cent is abolished.
The time is ripe, as Canadians cut the cord on the cent, for the American Treasury to do likewise. Stop minting cents. Listen to the chief economist at the Chicago Federal Reserve Bank, Françoise Velde. He wrote the book on low value coins throughout history and around the world. He recommends "rebasing" the cent. By fiat, order every cent to be revalued to five cents. This eliminates recalling, remelting, and recoining all those cent coins. They remain in active circulation serving their intended purpose. That's intelligent!
Or, as I have proposed: Rebase both the cent and the nickel to ten cents at the same time. Who would benefit from that windfall of revaluation? Savers, penny savers! Coin collectors. Retail stores with a stock of cents and nickels on hand. And banks, also with an inventory of low value coins. All great candidates for a little monetary windfall!
Banks, perhaps most of all, from the beating they have taken from the policies of the 110th Congress in the last two years. Perhaps the new Congress will have a little more collective intelligence.
For a report on the Canadian poll click on:
More than half of Canadians want to see the penny gone
Or for more on that Angus Reid poll:
Half of Canadians Ready to Wave Goodbye to the Penny
Wayne Homren, Editor
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