Dick Johnson submitted these thoughts on the future of coinage, triggered by the news that South Africa is the latest country to eliminate their lowest-value coin denominations.
South Africa announced this week that it is abolishing its 5-cent coin. It is also changing the composition of its 10-cent coins (slightly).
Here's the government news release:
This is a very smart move by South Africa. It is the latest progressive country among about a dozen others that have recognized that world economics has advanced so far to make the cent and nickel obsolete coins of commerce because of their low value. The 10-cent coin will be the lowest coin in circulation in this country as in the others. Prices will still be quoted in cents, it is only the final transaction amount to be rounded off to the nearest 10-cent increment.
How long will the United States drag its feet to recognize this fact? It should revamp its entire coinage system at one time instead of attacking separate problems, say, for each denomination.
The U.S. Treasury lost $42 million last year making cents and nickels of metal alloys that cost more than the face value of the coins produced. We are on track to spend $5 million more for a study to find a metal to replace these compositions. Numismatist David L. Ganz suggested an aluminum alloy in such a study in a New York Times article (reported here in E-Sylum vol 14, no 36, art 13, August 28, 2011).
To find compositions in which to strike cents and nickels -- which no longer have an economic justification to exist -- is dumb, dumber and dumbest. Both the cent and the nickel as a circulating denomination should be abolished. (Prices can still be quoted in cents, or any decimal fraction thereof, it is only the "transaction price" -- what the Canadians call the "tally price" -- that is rounded off. This balances out overall. To criticize for the reason everyone will raise to the higher increment is insignificant. Such criticism is also dumb.
The nickel should be rebased (revalued) to 10 cents and continue to circulate. The cents need to be melted and recoined into a higher denomination. These are just two suggestions in my 42-page plan "Future Coins."
I outline not only what coins should be abolished, what denominations should be retained, what new denominations should be added -- instead of 1c, 5c, 10c, 25c, 50c -- we should have 10c, 50c, $1. $5, $10. There are six compartments in current cash registers. They would easily accommodate these new denominations once the lower denominations are eliminated.
The vending machine industry, largest user of coins, would surely endorse this plan because 90% of the industry's problems are the use of paper dollars in their machines. Higher denomination coins would eliminate that.
My plan spells out the size of all future coins -- diameter and thickness -- plus what composition each should be struck in (eliminating problems from inevitable rise of metal costs).
It calls for what mints should do what, plus a new mint to be established just for the striking of one denomination -- guess which! -- and where it should be located (and why).
It calls for design suggestions for each new future coin.
It also suggests embedding a microchip in high value coins for a number of reasons. Hey, we have serial numbers on currency, why shouldn't we have serial numbers for each coin?
I have sent the manuscript on "Future Coins" to numerous publishers. Each has rejected it. It appears the plan is too practical -- it is not political -- and it is politicians who will make the final decisions to implement such actions.
In spite of this, I am willing to send a copy of this plan to any U.S. Treasury official, Congressman, or Congressional aide who requests it. (At: firstname.lastname@example.org).
Dick suggested the following list of tags to help anyone searching the Internet for information on the topic: "cent alloy", "cent composition", "cent metal", "new alloy for cents", "replacement cent alloy"; "penny alloy", "new penny composition", "new penny metal", "new alloy for pennies", "replacement penny alloy"; "nickel coin alloy", "nickel coin composition", "nickel coin metal", "new alloy for nickels", "replacement nickel alloy".
Wayne Homren, Editor
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