Dick Johnson submitted this note about a recent article advocating the eliminate of the one cent coin.
This week I just encountered the best article I have read in the decade I have been studying future coins. Of highest priority is the elimination of the cent in circulation. By not changing the composition, not striking cents in steel (or plastic, or cardboard, or whatever). Don't strike cents at all. Abolish the cent.
Writer Dana O. Crandell came up with 10 reasons why. I will paraphrase these:
1. Low purchasing power, you can't buy anything with a cent.
2. Costing taxpayers more than face value to mint cents.
3. Plastic replacing coins and paper money.
4. Cents dropping out of circulation.
5. More realistic pricing by rounding off.
6. Cents worth more as bullion (or collectors' items).
7. Conserve natural resources.
8. Half Cent good example, no body misses.
9. Other country's success in abolishing lowest value coin.
10. Step towards "cashless" commerce.
I responded with a lengthy reply, I liked the article so well. Here it is:
As a numismatic researcher-writer I have, for more than a decade, studied the usefulness of future coins. Denominations have changed over the years and centuries since mankind has enjoyed the utility of coins - since 640 B.C. Denominations have been created, when needed, and abolished when not.
Today we face the elimination of the cent, for the ten reasons mentioned in this article. I have saved articles on this subject, mostly editorials by writers who felt strongly enough to comment in print. The mood has reversed dramatically in that decade from about sixty percent to retain the cent, to currently more than eighty-five percent to abolish.
This change of opinion has been influenced by the rising cost of manufacturing cents - now costing 2.4 cents for each one cent coin minted - plus the fact that the purchasing power of one cent has diminished so low that most people consider pennies a nuisance.
Dana O. Crandell's article is the best I have observed in my decade of studying the subject. The ten reasons mentioned should be carved in stone and sent to every legislator who must make a Congressional decision. They need to make these ten reasons their commandments.
As society advances, prices rise gradually. A loaf of bread is no longer a dime, and a workman receives more than a dollar a day for his labors, prices evident in America's past. Also in that past we had a half-cent coin. It was abolished when its purchasing power was next to nil in 1857 (and the cost of its copper increased). Today, 150 years later, the American cent is in that same situation.
A useless coin, but what to do with over 400 billion cents in circulation? Chicago Federal Reserve Bank chief economist Francois Velde offered the best solution - call them nickels by revaluing them to five cents (he called that 'rebasing") - and let them stay in circulation.
Since the nickel coin faces the same indignity, my suggestion was to revalue both the cent and nickel to the next highest denomination. A Texas millionaire heard that and squirreled away 20 million nickels in a Dallas warehouse (a million dollars worth!) in hopes of doubling his investment.
I see a future where we will always need coins - bless the vending machine industry which thrives on coins (and hates changing paper money into coins). Further, of the five coin denominations we currently have circulating today, only the dime and 50-cent coin will survive. New coins of $1, $2 and $5 will replace those abolished to provide an adequate circulating medium in a revised coinage system.
Prices will be rounded off - if not for individual items - at least the price at the cash register(the 'transaction price" or what the Canadians call the 'tally price"). Rounding off to multiples of 10 cents will balance out in the end for both buyer and seller. And society advances by not being bothered by low value coins.
And perhaps 50, or 150 years from now, the dime will have to be abolished. Meanwhile thank you Dana Crandall. You said it better than I could, as well as 199 editorial writers. We have all come to the same conclusion.
-D. Wayne Johnson,
Medallic Art Company.
To read the complete article, see:
10 Reasons We No Longer Need the Penny
Wayne Homren, Editor
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