News flash: Treasury says cents/nickels too expensive!

PhillyJoe

Like an old man with a cart picking up junk on Ridge Avenue (in Phila.), Treasury Secretary Timothy Geithner is trying to turn scraps of metal into cash.

Geithner wants to strip copper and other valuable metals from the Philadelphia and Denver coining lines that mint America's small change. "Currently, the costs of making the penny and the nickel are more than twice the face value of each of those coins," he told a House Appropriations Committee panel Wednesday.

Treasury wants a law that would give it the freedom "to change the composition of coins to utilize more cost-effective materials" without having to ask Congress for permission every time it dilutes the content of the national coinage.

Geithner didn't specify in his testimony whether that means using plastic, aluminum, or other materials associated with carnival tokens. Or the old proverbial wooden nickel.

The U.S. Mint is researching alternative materials for all small change, said spokesman Mike White. "We're in the early stages, with a variety of metallic materials," he told me. Research on nonmetals would need congressional permission. "We have to deliver a report to Congress by the end of this year," White said.

The Mint says nickels are currently 75 percent copper, 25 percent nickel. Pennies are copper-covered zinc. Metals prices are volatile, but they have been generally rising in U.S.-dollar terms as China, India, and other fast-growing countries use more, drawing speculators who bid prices still higher.

Geithner hopes that Mint manufacturing and administrative changes "will save more than $75 million" a year, starting next year. That follows December's decision to stop making dollar coins after 1.4 billion of them piled up, unused, in Federal Reserve vaults.



Read more: http://www.philly.com/philly/business/20120329_Philly_Deals__Geithner_sees_cash_in_coins__metal.html#ixzz1qW2jSST7
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joeykoins

Interesting article! Thanks for posting,So what, back to the "Wooden Nickle" ?It would save the government a whole lot of money. but you know what? The collector would benefit on this. All those old copper,nickle and even zinc,of course the silver and gold would be even more supply in demand!Than probably,good-bye to the paper money as well.

RichieURich

Well, that is mostly good news. But, wouldn't it save a lot more if we just DISCONTINUED MAKING THE ONE-CENT COIN?

It's not just a money-loser to make it, it is also a big loss in productivity making change with cents, putting them into rolls, counting them, etc.

If you paid with electronic money (credit/debit card, etc.), they could still use cents for the bookkeeping, but if you paid cash, the merchant would round down or up to the nearest nickel. Over the course of a year, most people would probably break even. Even if you didn't, and you lost a penny or two a week, wouldn't it be worth it from a productivity standpoint?

Same as with gasoline, which is priced to 9/10th of a cent. (Another idea whose time has come, and should now go!)

Half cents were used in this country until they were discontinued in 1857. Somehow we didn't miss them in daily commerce. Now it is time for the cent to go.

ricko

This has been the case for a long time, strange how it now becomes a priority. Cheers, RickO

hammered54

that's just great..lets take any remaining value from our coinage and sell it to China...lets not work on making our dollar stronger so a penny is a penny.
lets use marbles instead there cheap enough and sand is pretty much worthless, and there are many sizes to take the place of cents, nickels, dimes ect.
what the hell....

keyman64

If they got RID OF the CENT and DOLLAR BILL (replaced by dollar coin...and then stopped paying money to store the stupid coins) and changed the composition of the nickel to something cheaper..........ALL IN ONE SWEEPING CHANGE then I would be impressed. If the gov't wants to save money then this is what needs to happen. Instead of falling further behind world economies...I think we should stop the bleeding and catch up!

earlyrarecoins

Or maybe the problem is a state of economic condition that has caused the cent to become too costly?

fishcooker

Make the coins face value 10x higher. Round to the nearest penny, which would be 10 cents. Then coins would actually buy something. A $10 Sac would be worth carrying.

hammered54

<< <i>Or maybe the problem is a state of economic condition that has caused the cent to become too costly? >>



this.

jmski52

Oh, the irony! Maybe a whole bunch of government programs are too expensive.

edix2001

Some stats from a recent article (linked below) showing the 2012 purchasing value of circulating coins in 1857 (i.e., the current dollar has the equivalent value of 3 cents.) The article stresses that the mint had a workable plan back then in eliminating the half cent and moving to a smaller cent. Also worthy of note is that the 1857 purchasing value of silver coins was greater than the melt value of 90% silver coins today (but gold had much less purchasing value than today, meltwise):

1857 Coin Denominations/Value compared to 2012:
1857 Circulating Coins
Half Cent $0.17
Cent $0.34
Trime $1.04
Half Dime $1.74
Dime $3.48
Quarter $8.71
Half Dollar $17.43
Dollar (Silver/Gold) $34.87
Quarter Eagle $87.19
Three Dollar Gold $104.63
Half Eagle $174.39
Eagle $348.79
Double Eagle $697.58

Congressional Inaction, Not Inflation, Is to Blame for the Diminishing Role of U.S. Coinage

JamesMurray

<< <i>This has been the case for a long time, strange how it now becomes a priority. Cheers, RickO >>



Every once in a while these windbags spout off so it looks like they are doing something.

mingot

<< <i>
Congressional Inaction, Not Inflation, Is to Blame for the Diminishing Role of U.S. Coinage >>



I always wonder about the two dollar bill.

It seems like if you eliminated the one dollar bill it might actually make sense to, for the near term, start circulating two dollar bills again.

In theory it would get rid of a lot of the complaining about having to carry a pocket full of change. You'd never HAVE to have more than a single dollar coin. It would ease the hit to the crane paper company and maybe they wouldn't lobby/astroturf quite as hard against these changes. And it could pave the way towards the introduction of a two dollar coin.

19Lyds

Hmmmm. It sounds to me like he's starting to try and do his job.

Too bad its in the wrong direction as it is obviously politically based.

Stopping the production of one dollar bills would save 180 million a year and actually makes the "most" economic sense.

rmpsrpms

They're just getting ready to inflate some more and to have a stupid excuse for it.

LindeDad

Does one really think rational decisions are made by them anymore?

Coinsponge

Why does he want to cut Congress out? I will hold back my vitriol here but it is not like this kind of decision has to be made on the fly.

TwoSides2aCoin

News Flash :
It costs twice as much to produce coinage when only half the people are working. EBT cards are less costly. Let's all collect benefits, instead of coins.

Coinsponge

I hope they never go to aluminum coins. Reminds me of third world coinage. Not that we aren't headed there anyway.

MsMorrisine

no surprise,

I like the author's writing style.




If the Treasury wants Congressional Authority to change compositions, then I want Congress to mandate some kind of "respectable materials" law for the change.

Plastic notes? I'd consider it.

Plastic cents? never.

MsMorrisine

<< <i>I hope they never go to aluminum coins. Reminds me of third world coinage. Not that we aren't headed there anyway. >>



Copper, Silver, Aluminum corrode similarly the outer layer becomes protective of what's underneath. Steel is a slow degenerative corrosion. However, corroded Aluminum is ugly and doesn't have that smooth outher surface that corroded copper or silver has.


So, I'm not a big fan or aluminum nor steel (even zinc coated) as material choices.


Here is a non third world country using aluminum: 100% Aluminum 1 Yen coins that, more than 15 years ago I put on the ground outside a Japanese/Tokyo system subway station and no one bothered to pick them up. (didn't try a 100yen coin though)



Mass 1 gram

Floats on water due to surface tension of the water:

57loaded

How much zinc is in those copper cents does Timmy want?

mrearlygold

<< <i>I hope they never go to aluminum coins. Reminds me of third world coinage. Not that we aren't headed there anyway. >>




Deservedly so

MsMorrisine

<< <i>How much zinc is in those copper cents does Timmy want? >>




we can't go to 100% and make them cost effective....


so, we're looking at a "radically different solution." (whatever that will be)

MsMorrisine

<< <i>Or maybe the problem is a state of economic condition that has caused the cent to become too costly? >>




heh


falling dollar, rising commodity prices.


to some extent that is true, but the rise of Russia, especially the recent rise of China, and the continued slow rise of India, will also drive demand for commodities up and up.

LindeDad

I'm still wondering what one can buy with a cent coin? Even when they are in change for larger purchases most just leave them on the counter anymore.
Another answer of just don't do it maybe like making rag bucks.

PCGSPhoto

Interestingly enough, it's just been revealed that Canada had decided to eliminate the penny. CBC Link

Barndog

<< <i>Interestingly enough, it's just been revealed that Canada had decided to eliminate the penny. CBC Link >>





I hope the USA follows suit.

TwoSides2aCoin

It's a good thing people are willing to pay double for those presidential dollars Me included.

cladking

<< <i>News flash: Treasury says cents/nickels too expensive!
>>



Wow!!! Now that's a shocker. Don't anyone tell them that you can't get a candy bar for
a nickel any longer and the cent is less than worthless. Don't tell them the calendar hasn't
said 1961 for half a century now or the sudden shock of awakening might be too much.

Let them sleep and we can watch them make pennies out of aluminum for 2c each that still
wast a cent every time they get used.

DBSTrader2

WOW!! That's MAJOR news about the Canadian cent!! They were the first non-US denomination I collected as a kid, and now the series comes to an end - - the first true end of a denomination in my lifetime. Mixed emotions there......

However, there is ONE benefit of no longer minting cents that nobody has mentioned......... my Whitman folder was quickly filling up with all the latest issues, and I was anticipating having to buy yet another folder for the series for each of my & my kids' collections.

This announcement has already "rounded-down" my collecting costs by close to $20!!!

- - Dave


Now I just need to make sure I fill all outstanding holes before they disappear!! Anyone have any tradeable extras of the following dates/mintmarks?:

2006 (1)
2006-P (4)
2006-RCM (1)
2007-RCM (1)
2008-RCM (1)
2009-RCM (4)
2010-RCM (4)
2011-RCM (4)
2012-RCM (4)

(are there both "magnetic" & "non-magnetic" versions of 2007 thru 2012?)

coinman23885

I think the public would be less resistant if the government proposed a plan like this: We will not produce cents for the next X years, but will produce them as needed; in other words, purchases do not necessarily need to be rounded to the nearest nickel.

cladking

<< <i>Interestingly enough, it's just been revealed that Canada had decided to eliminate the penny. CBC Link >>





<< <i>Indeed, the lowly penny has fallen so far that Ottawa described it as a "burden to the economy" in a pamphlet explaining the change on Thursday.
>>



Interesting. Not too many years ago the canadian penny was worth onlya bit more than half a cent.

But they make their changes earlier than we do and now their penny (which is a "burden to the economy") is actually worth more than a US cent. And it's not even toxic, eh.

Coinsponge

I wonder if they stopped making new cents if people would start hording the old ones? That makes me think, they should make 20 2013 cents and let me buy 10 of them. Yeah, thats the ticket.

mozin

I must admit, I did not read all the previous posts in this thread, because I feel what we think has little influence on what the Obama administration wil do. Personally, I would say do away with the penny certain, the nickel for sure, and the paper dollar for sure.

MrEureka

From 1793-1857, the half cent was the smallest denomination. In 1857, price levels had risen to the point that the half cent was considered unnecessary and was discontinued, and the size of the cent was reduced by more than 50%. Perfectly logical.

Today, with prices so much higher than in 1857, we still have the cent. It's almost like we're living in a different country.

edix2001

<< <i>From 1793-1857, the half cent was the smallest denomination. In 1857, price levels had risen to the point that the half cent was considered unnecessary and was discontinued, and the size of the cent was reduced by more than 50%. Perfectly logical.

Today, with prices so much higher than in 1857, we still have the cent. It's almost like we're living in a different country. >>



Yes, the cent itself has the value of a third of a mil.

Coinsponge

If they eliminate the penny then we may have to change our expression "that is my 2 cents on the matter". We will have to say "that is my 5 cents". And the other guy might respond "your 5 cents is not worth a plug dime". And they say inflation is under control.

joeykoins

<< <i>

<< <i>Interestingly enough, it's just been revealed that Canada had decided to eliminate the penny. CBC Link >>





I hope the USA follows suit. >>

NO!NO!NO! please! Dollar coins,yes,cents,no.

tahoe98

...link to OP's reference here

kiyote

People complain that everything will be rounded up yet those same people gladly pay $2.50 in banking fees to take out $20 from an ATM.

TwoSides2aCoin

When a copper cent is worth a nickel, it is too expensive to manufacture. That's a given. Enter zinc and we're wasting energy.
The opinions expressed here are not necessarily mine. Rumor has it politicians want to tax free thinking.

edix2001

<< <i>When a copper cent is worth a nickel, it is too expensive to manufacture. That's a given. Enter zinc and we're wasting energy.
The opinions expressed here are not necessarily mine. Rumor has it politicians want to tax free thinking. >>



I've already paid my thinking tax but haven't availed myself yet on using it.

tahoe98

<< <i>When a copper cent is worth a nickel, it is too expensive to manufacture. That's a given. Enter zinc and we're wasting energy.
The opinions expressed here are not necessarily mine. Rumor has it politicians want to tax free thinking. >>



...rumor

dpoole

They can't get rid of the cent. That'd imply that there's no inflation. And everyone knowns there's no inflation.

DBSTrader2

It's not only the wasted money to mint them & the wasted resources, but also the damage to the environment brought on by the mining and refining of zinc! That's one great advantage of moving from coins to a cashless society.

Besides, when we stop using up all that zinc for pennies, etc, I'm sure we can continue to line the pockets of the CEO, etc of that company which holds a monopoly on its production by using it to build a better bomber, warhead, etc......... or an aircraft carrier for Colorado (or whatever landlocked state was looking to buy one...)

cladking

<< <i>It's not only the wasted money to mint them & the wasted resources, but also the damage to the environment brought on by the mining and refining of zinc! That's one great advantage of moving from coins to a cashless society.

Besides, when we stop using up all that zinc for pennies, etc, I'm sure we can continue to line the pockets of the CEO, etc of that company which holds a monopoly on its production by using it to build a better bomber, warhead, etc......... or an aircraft carrier for Colorado (or whatever landlocked state was looking to buy one...) >>



Aty the current time electronic transactions still cost over a dime to make. A quarter costs
only about 4c and can be used thousands of times. Cash transactions also go much faster
than most electronic transactions.

Nobody can steal the date on your clad quarter and access your bank accounts.