Dick Johnson is making his own call to arms over the potential disappearance of coins from circulation altogether.
I have sounded the call to arms before but no one in authority at the American Numismatic Association seems to be listening. An action is needed that overshadows perhaps 90% of the activities in which the ANA is currently involved. A monster is lurking in the future that would severely curtail the field of numismatics.
The ABC network issued a report this week on the declining use of circulating coins in America. We all know we are in a soft economy. This has led to fewer purchases and less need for use of coins in making payment for small value transactions. The report reveals the government office -- the Cash Product Office -- that tracks the amount of coins in circulation. It also determines where and what coins are needed to be obtained from the Federal Reserve Banks (which obtains newly minted coins from the Mint.)
The rumbling behind closed doors is that circulating coins may be abandoned altogether Such action would end entirely with the current trend of increased payments online by phone. This is, in effect, Electronic Transfer of Payments.. That is the monster in the closet.
If such an action would occur it would severely damage coin collecting, let alone the entire numismatic field. Numismatists would be forced to study existing coins like scientists and archeologists study clay tablets.
The U.S. Mints would cease striking coins for circulation. Instead they would manufacture an even greater number of commemorative "coins" for sale to a gullible public. If they bore a demonetization it would be meaningless because they could not be spent -- they would not be a medium of exchange.
The ANA should lead the way to curtail the Electronic Transfer of Payment Monster. As a Congressional Chartered Institution the ANA should do everything possible to keep coins viable and useful for small value payments. Inaction would lead to the Monster becoming dominant and the possible death knell for circulating coins.
Here are my recommendations:
1. The ANA should join forces with the vending machine industry to determine best use of coins. Thus the organization with the greatest love of coins with the industry of the greatest use of coins could speak with one unified, specific, forceful voice.
2. Demand the U.S. Treasury issue coins of higher denomination -- five dollar, and ten dollar -- as circulating coins.
3. Prove to the Treasury the folly of continue striking coins of minor value -- the cent and the nickel -- plus eliminate the quarter.
4. Retain the dime, half dollar and dollar coin. Round off all transactions to the nearer 10 cents. Prices can still be quoted in cents as prices have been quoted in mills since the demise of the half cent coin in 1857. Its the final transaction price -- what the Canadians call the "tally price" that payment be made in a multiple of 10 cents.
5. These three denominations -- dime, half dollar and dollar -- combined with the two new coin denominations of five dollar, ten dollar -- could satisfy every possible small value transaction. This has been the prerogative of coins for 2600 years. The five denominations would occupy the five compartments in every cash register in the country.
6. Vending machines would eliminate all paper money transactions in their machines as the five denominations could accommodate every possible purchase. This would be to the delight of the vending machine industry as use of paper money is their greatest problem.
7. Aid the Treasury Department in a public relations campaign for the rounding off all transactions to 10 cents. The economic value of the cent and nickel are so small -- and become increasingly smaller -- as our economy returns and grows in the future.
Can you imagine 50 years in the future when, say, the minimum wage is $100 per hour, the economic value of one cent. It would be less than what we value a mill today. The sooner we effect the savings of eliminating the costly striking of cents and nickels the better. A coinage system based on 10 -- 10 cents -- would be efficient in a modern, advanced society.
The Treasury is wasting its time conducting studies and holding public hearings on what composition to make cent coins in the future.. Such inevitable result is going to be -- like the checkout clerk at the grocery store "paper or plastic/?"
The answer should be to eliminate the cent (and the nickel).
And the ANA should mount a project immediately to keep circulating coins viable or the Cookie Monster will take away all our cookies in the future!
Here is the ABC report:
Coin Use Decline Could Cost Fed a Pretty Penny
Also this week is a report that graphically illustrates the cent-nickel folly as revealed in a House Subcommittee meeting last week:
The penny debate: Should U.S. stop making pennies, nickels?
Wayne Homren, Editor
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