Dick Johnson submitted these thoughts on the latest opinion regarding the elimination of the cent in Canada.
Financial columns in Canadian newspapers across the country carried articles this week about the dialog Wednesday in Canadian Parliament to abolish the cent as a circulating coin.
Some of the best language has been written about the pros and cons. The strongest reason in favor is the $100 million savings in not minting 500 million new cents each year. Plus the labor and transportation costs of placing these coins in circulation. Also the explanation of rounding off to the nearest five cents was published in crystal clear language.
One of the reasons against is the one-time cost of inaugurating such a plan. I presume this would be the cost of a publicity program informing the citizens they no longer had to carry cent coins in their pockets and purses. Plus the fact any inherent cost for all their cash purchases would balance out overall, were they might lose a cent in one transaction and make it up in another.
One quote stated: "There are an estimated 30 billion pennies in circulation in Canada, more than 600 for every man, woman and child in the country."
The cent coins would be retired, ultimately to be melted for the value of the metal, now worth more than $1.50 for every 100 coins. All Canadian cents dated 1999 and prior are a copper and zinc composition. These coins, when melted, could easily be reformulated into BRASS. Perhaps this would flood the market for brass causing a dip in the price for that metal for a brief time. So the retirement of the coins should be casual -- perhaps stretched out over ten years -- rather than an immediate recall of all cent coins.
All Canadian cents dated 2000 and later are a copper coated steel. This will prove to be an interesting scrap technology. I am certain, however, Canadians are ingenious to devise the methodology of separating the metals from the alloy of melted coins.
Long run: benefit to all Canadians, with tremendous cost savings.
One Canadian Senator summed it up: "The penny has outlived its usefulness. It is, in fact, a piece of currency that lacks currency."
The same savings multiplied many fold could be applied to United States as well, by eliminating its cent coins. Are you listening U.S.Treasury and Mint officials? Don't make a plastic or aluminum penny. Abolish the cent!
The best -- among dozens of the articles this week -- is by Philip Lang of Canwest News:
A more lengthy, but highly informative article was written by Kim Covert:
Here is the table of Canadian Cent composition from Wikipedia:
Composition throughout history
Years Mass Diameter/Shape Composition
2000present * 2.35 g 19.05 mm, round 94% steel, 1.5% nickel, 4.5% copper plated zinc
19971999 * 2.25 g 19.05 mm, round 98.4% zinc, 1.6% copper plating
19821996 2.5 g 19.1 mm, 12-sided 98% copper, 1.75% tin, 0.25% zinc
19801981 2.8 g 19.0 mm, round 98% copper, 1.75% tin, 0.25% zinc
19781979 3.24 g 19.05 mm, round 98% copper, 1.75% tin, 0.25% zinc
19421977 3.24 g 19.05 mm, round 98% copper, 0.5% tin, 1.5% zinc
19201941 3.24 g 19.05 mm, round 95.5% copper, 3% tin, 1.5% zinc
18761920 5.67 g 25.4 mm, round 95.5% copper, 3% tin, 1.5% zinc
18581859 4.54 g 25.4 mm, round 95% copper, 4% tin, 1% zinc
Although the RCM states 2000 as the year of transition from zinc to steel, collectors have reported finding zinc cents dated as late as 2006 in circulation, while steel cents dated before 2002 are rare in circulation.
From May 2006 to October 2008, all circulation Canadian pennies from 1942 to 1996 had an intrinsic value of over $0.02 CAD based on the increasing spot price of copper in the commodity markets. The break-even price for a 2.8 g solid copper penny is $1.61 USD/lb, with prices during this period reaching as high as $4 USD/lb.
Wayne Homren, Editor
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