Dick Johnson submitted these thoughts in response to the David Ganz article quoted last week. Thanks.
David L. Ganz had a long article in New York Times last week proffering his idea in solution to the cent problem. It cost more than a cent for the Mint to make a cent in copper coated zinc, the cent's current composition. His solution -- strike the cent in aluminum coated steel.
This is impractical for four reasons.
But he overlooks the most important factor of all. The cent is no longer a viable denomination in the economic scheme of current commerce. The world's economies have advanced beyond the need for a coin of this low demonization. We no longer strike a half cent coin -- or need a plastic mill (Dave mentioned in his Times article) -- because these coin denominations are unfeasible. Like it or not, Dave, we no longer need a cent, for the same reasons of these abolished denominations.
The best evidence to refute Dave's insistence to retain the cent, but strike it in a cheaper alloy, is an article that also appeared this week. Entitled "The Priest and the Unloved Coins," this article reports that Italians, as well as other Europeans, no longer use cent coins. If citizens don't throw them away, they put them in the church collection boxes. But Priests don't want the coins either.
It is estimated five billion Euros in low value coins are idle -- no one wants them. European merchants are rounding, up and down, to prohibit having to use the coins.
Dave states eliminating the cent would result in higher prices. But this has not proved the case in countries that have already eliminated the cent.
Here are the four reasons:
1) Australia and New Zealand were the first to eliminate their cent coin. Prices were rounded off, up or down, to nearest available coin. No problem. Australians abolished their two lowest denominations and are now considering the elimination of the third!
2) Not all merchants always round up. A drug chain in Israel always rounded down, advertised this as their policy, and gained a competitive advantage over their competitors.
3) Even if merchants didn't round down, it would cost the average family less than $100 a year, a Pennsylvania university study revealed.
4) But if the Mint struck coins in Dave's suggested alloy it would create a scrap nightmare! Dave overlooked the fact that at the end of a coin's life as a circulating coin its metal must be reused, converted into a useable form. Separating the aluminum from iron is costly to yield metals not worth the cost of such processing. In contrast, the present copper-coated zinc is easily converted to brass in a cost-effective process.
Believe me, I am not anti-cent, anti-Lincoln, anti-Brenner or against the cent for any reason. I have written in praise of all three, but I recognize the cent denomination is doomed. At least in American like it has been eliminated in other countries. Americans who want to retain the cent do so for sentimental reasons. But that is costing us millions. Abolish the cent coin, don't strike it in a cheaper alloy.
The Priest's article:
To read the earlier E-Sylum article, see:
ALTERNATIVE COMPOSITIONS FOR U.S. COINS SOUGHT
Wayne Homren, Editor
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