U.S. Mint Bans Melting Pennies, Nickels
Cladiator
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U.S. Mint Bans Melting Pennies, Nickels
By MARTIN CRUTSINGER (AP Economics Writer)
From Associated Press
December 14, 2006 12:26 AM EST
WASHINGTON - Given rising metal prices, the pennies and nickels in your pocket are worth more melted down than their face value - and that has the government worried.
U.S. Mint officials said Wednesday they were putting into place rules prohibiting the melting down of 1-cent and 5-cent coins. The rules also limit the number of coins that can be shipped out of the country.
"We are taking this action because the nation needs its coinage for commerce. We don't want to see our pennies and nickels melted down so a few individuals can take advantage of the American taxpayer," Mint Director Edmund Moy said in a statement.
Officials said they had received a number of inquiries from the public in recent months concerning the value of the metal in the coins and whether it was legal to melt them.
The new regulations prohibit the melting of 1-cent and 5-cent coins, with a penalty of up to five years in prison and a fine of up to $10,000 for people convicted of violating the rule.
The rules also require that shipments of the coins out of the country be for legitimate coinage and numismatic purposes and cap the size of any one shipment to $100 worth of the coins.
Because of the prevailing prices of copper, zinc and nickel, the cost of producing pennies and nickels exceeds the face value of the coins.
A nickel is 25 percent nickel and 75 percent copper. The metal in one coin costs 6.99 cents for each 5-cent coin. When the Mint's cost of producing the coins is added, the total cost for each nickel is 8.34 cents.
Modern pennies have 2.5 percent copper content with zinc making up the rest of the coin. The current copper and zinc in a penny are worth 1.12 cents. The cost of production drives the cost of each penny up to 1.73 cents.
Pennies made before 1982, which are still in circulation, would be even more lucrative to melt down because they contain 95 percent copper and only 5 percent zinc. The metal value in those coins is 2.13 cents per coin, Mint officials said.
The new regulations are being published in the Federal Register and will go into effect as interim rules which will not become final until the government has a chance to consider possible modifications based on public comments.
By MARTIN CRUTSINGER (AP Economics Writer)
From Associated Press
December 14, 2006 12:26 AM EST
WASHINGTON - Given rising metal prices, the pennies and nickels in your pocket are worth more melted down than their face value - and that has the government worried.
U.S. Mint officials said Wednesday they were putting into place rules prohibiting the melting down of 1-cent and 5-cent coins. The rules also limit the number of coins that can be shipped out of the country.
"We are taking this action because the nation needs its coinage for commerce. We don't want to see our pennies and nickels melted down so a few individuals can take advantage of the American taxpayer," Mint Director Edmund Moy said in a statement.
Officials said they had received a number of inquiries from the public in recent months concerning the value of the metal in the coins and whether it was legal to melt them.
The new regulations prohibit the melting of 1-cent and 5-cent coins, with a penalty of up to five years in prison and a fine of up to $10,000 for people convicted of violating the rule.
The rules also require that shipments of the coins out of the country be for legitimate coinage and numismatic purposes and cap the size of any one shipment to $100 worth of the coins.
Because of the prevailing prices of copper, zinc and nickel, the cost of producing pennies and nickels exceeds the face value of the coins.
A nickel is 25 percent nickel and 75 percent copper. The metal in one coin costs 6.99 cents for each 5-cent coin. When the Mint's cost of producing the coins is added, the total cost for each nickel is 8.34 cents.
Modern pennies have 2.5 percent copper content with zinc making up the rest of the coin. The current copper and zinc in a penny are worth 1.12 cents. The cost of production drives the cost of each penny up to 1.73 cents.
Pennies made before 1982, which are still in circulation, would be even more lucrative to melt down because they contain 95 percent copper and only 5 percent zinc. The metal value in those coins is 2.13 cents per coin, Mint officials said.
The new regulations are being published in the Federal Register and will go into effect as interim rules which will not become final until the government has a chance to consider possible modifications based on public comments.
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Comments
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<< <i>Which will only encourage others who haven't considered this to start hoarding. This could get interesting. >>
Newb, you beat me to the punch. That was my first thought upon reading the thread title. I guess great minds think alike.
An authorized PCGS dealer, and a contributor to the Red Book.
7c worth of perfectly good metal into a coin that's worth only 5c. This is straining
supplies of nickel on which the LME has already gone into default. This extra cost
for five cent coins is coming out of tax payers pockets and is evaporating as the gov-
ernment works to pretend that we need cents in change and that there is no inflation
affecting the nickel. Anyone who wants to actually obtain full value for the metal in his
own coins now can spend five years in prison at taxpayer expense.
Meanwhile coin collectors are no longer allowed to ship something like a bag of 1982-P
nickels out of the country because it is double the allowed amount. I suppose this ap-
plies to indian cents as well. How long until Morgan dollars are affected? How long
until coins can't be imported? Bought? Sold?
Go figure.
<< <i>How long until Morgan dollars are affected? How long until coins can't be imported? Bought? Sold? >>
I doubt Morgan dollars would be affected with this line of reasoning:
<< <i>We are taking this action because the nation needs its coinage for commerce >>
No one uses dollar coins so they can't claim Morgans are needed for commerce. Of course, they may pass a different bill saying silver is needed and illegal to export.
I assuming of course the mint was given such authority by the legistative body that created it.
<< <i> so a few individuals can take advantage of the American taxpayer," >>
I'm thinking the advantage of the taxpayer that was taken, happened somewhere else entirely so that the pittance of metal in the coin now does exceed the face value.
<< <i> to $100 worth of the coins >>
I sincerely hope that means face value and not numismatic value. Of course, if that's the case, then the precedent would be set for reimbursment at face value should any other 'government actions' occur, so maybe I shouldn't hope for that.
Man, I'm starting to sound like a conspiracy theorist. Excuse me while I retreat back to the darkside and look at some cool coins (that may actually have some metal content as well...maybe a bag of Canadian silver and/or pennies is interesting after all....)
What really doesn't make sense is that there is even a need for this discussion or concern. Inflation had dictated the demise of the second decimal place decades ago. The dime should be our lowest denomination and the quarter replaced by a more resonably sized half dollar. We only need 10c and 50c minor coins and should scrap the rest. I could see making that a 2009 goal to enable the close out of the state quarter series and the Lincoln cent centennial.
Anyone else have a problem with the ignorance of a Mint Diretor referring to US cents as pennies, or am I just too anal on that point?
<< <i>"...We don't want to see our pennies and nickels melted down so a few individuals can take advantage of the American taxpayer," Mint Director Edmund Moy said in a statement." >>
Hmm, also I suppose only the government should be taking advantage of the American taxpayer.
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<< <i>I've been holding back all of the pre-82 cents I've seen for quite some time now. The mountain of copper in my closet is scary. LOL >>
I'll admit, I've got 34 rolls of pre-1982 Lincolns in my room as well. I started accumulating them about a year ago, but really to melt them, although the thought passed my mind a few times.
-YN Currently Collecting & Researching Colonial World Coins, Especially Spanish Coins, With a Great Interest in WWII Militaria.
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Liberty: Parent of Science & Industry
I figured the mint would start to become greedy, oh wait, they already have!!!
<< <i>My question is does the mint even have constitutional authority to create such a "rule" (the term they seem to be using instead of "law", which is what it is since it carries a fine and jail time)?
and
That is precisely what I was thinking when I read it. The US Mint is not a governing body, but a division of the BEP under the Treasury Dept in the Executive branch -- the one branch that is least in a position to define legislation.
>>
There are a couple aspects of this I find really funny. First, I think you're both right, this isn't a law, and as far as I know, they'd have to get legislation passed if they are to prosecute anyone. Second, if this becomes widely publicized, don't you think it will promote even more hoarding of these low-end, but apparently high cost coins, forcing them to produce even more?
Leave it to the beaurocrats at the mint....and I was astonished at the mint deliving SF gold commems with cheap capsules that pop open during shipping! They're getting more and more out of touch than I can ever recall.
We have the power to write them and tell them what we think. Why don't we tell them to can the production of any coin that costs more to produce than its face value? After all, it is your taxpayer money being wasted here. If you were in business, would you sell a manufactured product at less than cost? Yet the mint does this daily (hell, its not their money being wasted)!
From the mint press release, they are taking comments from the public for thirty days:
Those interested in providing comments to the United States Mint regarding this interim rule must submit them in writing to the Office of Chief Counsel, United States Mint, 801 9th Street, N.W., Washington D.C. 20220, by January 14, 2007. The interim rule appears on the United States Mint website at www.usmint.gov. The United States Mint will make public all comments it receives regarding this interim rule, and may not consider confidential any information contained in comments
Maybe the members of this forum can agree to write, stuff the ballot box and bring about the demise of the cent and the nickel. I know its a painful thought, but think of the value increase when these long running series end.
Proud recipient of two "You Suck" awards
Who the heck needs nameless, faceless judges? I assume Congress has adjourned for the holidays.
that was really only worth the two cents it cost to manufacture.
All of this done is the 'fiat' system of money we a being inflated
out of. Then when the coin that we were told to accept as being
five cents became worth seven cents we are told we can't have
them to do with as we please. Basically, we are told to give them
back or keep them moving. What's next? My 90% or 40% half
dollars keep them in commerce.
Yeah, this law is gonna work. I'm sure it will be policed well, 5 year
prison terms, yep this is gonna work just fine. The coin police are
knocking at the door. I fear posting this.
Has the US Congress previously passed legislation that would allow this draconian measure?
From the US Mint press release:
Those interested in providing comments to the United States Mint regarding this interim rule must submit them in writing to the Office of Chief Counsel, United States Mint, 801 9th Street, N.W., Washington D.C. 20220, by January 14, 2007. The interim rule appears on the United States Mint website at www.usmint.gov. The United States Mint will make public all comments it receives regarding this interim rule, and may not consider confidential any information contained in comments
I think the forum members should get together and let the Mint know how we feel about it....this IS the chance to do it
Proud recipient of two "You Suck" awards
<< <i>Time to suspend minting either one of these unless this major problem is solved..... >>
They've gotten themselves in huge trouble through inaction. Sure the penny can be
dropped quite easily, but the nickel is needed to make change since a dime and quar-
ter can not meet all needs. Now by creating law to protect this coin they are highlight-
ing the fact that it is valuable which is likely to drive it from circulation. I've been saying
for months now that we are nearing the day that retailers have to cut dimes in half to
make change. There really isn't an alternative. The beauty of cutting dimes is that the
mint will redeem the "half dimes" by weight if anyone ever fixes the mess we call currency.
No one loses any money, the economy moves on and we don't have to go look for three
hundred million caves for Americans to move into.
If they don't want only a few individuals to profit at the expense of the masses, it should be legal to melt the coins, not illegal. Everyone should be allowed to feed at the trough. Just ask any bootlegger!
Doggedly collecting coins of the Central American Republic.
Visit the Society of US Pattern Collectors at USPatterns.com.
<< <i>Anyone else have a problem with the ignorance of a Mint Diretor referring to US cents as pennies, or am I just too anal on that point? >>
huh?
what are you talking about.
they ARE pennies.
very anal.
hi, i'm tom.
i do not doctor coins like some who post in here.
First, an authorized agency--such as EPA--decides that a regulation may be needed. The agency researches it and, if necessary, proposes a regulation. The proposal is listed in the Federal Register so that members of the public can consider it and send their comments to the agency. The agency considers all the comments, revises the regulation accordingly, and issues a final rule. At each stage in the process, the agency publishes a notice in the Federal Register. These notices include the original proposal, requests for public comment, notices about meetings where the proposal will be discussed (open to the public), and the text of the final regulation. (The Federal Register also includes other types of notices, too.)
Once a regulation is completed and has been printed in the Federal Register as a final rule, it is "codified" by being published in the Code of Federal Regulations (CFR). The CFR is the official record of all regulations created by the federal government. It is divided into 50 volumes, called titles, each of which focuses on a particular area. Almost all environmental regulations appear in Title 40. The CFR is revised yearly, with one fourth of the volumes updated every three months.
(from epa.gov) I didn't want to type a whole bunch of junk. And I am not a lawyer.
I can't imagine all those costs being so minimal that anyone could make any kind of profit worth talking about....unless they were doing this by the truckload.
Just my thoughts!
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Finest Toned Ike I've Ever Seen, been looking since 1986
<< <i>Anyone else have a problem with the ignorance of a Mint Diretor referring to US cents as pennies, or am I just too anal on that point? >>
I took notice of that as well. It's a bit annoying. Next the mint will come out and say you can't melt the US shillings either.
that's exactly what they said in 1965.. and by 1971 there was virtually NO silver in circulation.
Liberty: Parent of Science & Industry
<< <i>No rocket scientist here, but how many pennies or nickels would you really have to melt to make a decent profit. Last I thought about it, there is a cost to melt, a cost to form ingots or what ever form the metal needs to be in, and a cost to transport to the buyer.
I can't imagine all those costs being so minimal that anyone could make any kind of profit worth talking about....unless they were doing this by the truckload.
Just my thoughts! >>
Most coin is just used as alloy or chill scrap in the production of other metals. Stainless steel for
instance often uses cu/ ni in a three to one ratio which is the same as the nickel coin. Whatever
metal is used it will have to be melted anyway so there is no cost to using coin except for trans-
portation. This is what has happened already to vast numbers of modern coin. Now it's happening
to US coin.
Ironically other countries have tried the ame tactic as the mint; rather than employ common sense
and produce usable coin, they pass laws against melting the coin and lock up those they catch
breaking it. India has been playing this game for years even with their aluminum coins. These
sorts of laws won't protect the coins and will concentrate the profit into a few hands. Mint produc-
tion of cents and nickels will soar while a few get rich and the old coins disappear. Then we'll have
a coin shortage and have to find other alternatives for making change.
TD
$4 worth of nickels for $8.95
$20 worth of quarters for $32
$25 worth of Sac dollars for $35.
Maybe we can get a two fer on a Constitutional Amendment with all this rampent flag burning and coin melting .
Hey, maybe these Buffalo nickels will actually be worth something after all.
<< <i>Well then can I start melting dimes and quarters? >>
They haven't banned that so I think you can start now
<< <i>can't imagine all those costs being so minimal that anyone could make any kind of profit worth talking about....unless they were doing this by the truckload
that's exactly what they said in 1965.. and by 1971 there was virtually NO silver in circulation. >>
As Baley said. When President Lyndon Johnson signed the bill to change to clad coinage in July 1965, he stated that there would be no profit going to people who decided to hold onto the 90% silver coins. Then the government spent the next few years pulling out of circulation as many silver coins as they could.
An authorized PCGS dealer, and a contributor to the Red Book.
<< <i>
<< <i>can't imagine all those costs being so minimal that anyone could make any kind of profit worth talking about....unless they were doing this by the truckload
that's exactly what they said in 1965.. and by 1971 there was virtually NO silver in circulation. >>
As Baley said. When President Lyndon Johnson signed the bill to change to clad coinage in July 1965, he stated that there would be no profit going to people who decided to hold onto the 90% silver coins. Then the government spent the next few years pulling out of circulation as many silver coins as they could. >>
.....and those private citizens who did hold onto the 90% silver coins made a good profit.
<< <i>Which will only encourage others who haven't considered this to start hoarding. This could get interesting. >>
Agreed. We might be forced into dime-rounding due to the lack of pennies and nickels. Sometimes progress must be dragged in, kicking and screaming.
And for those "anal" folk claiming the US doesn't have pennies -- well, technically we don't have "nickels" either; we have five cent pieces. There's nothing wrong with using the colloquial terms for refering to a one cent or five cent piece. Only anal numismatists get their panties in a wad about it; the rest of the country just understands what's being talked about and gets on with it.
An authorized PCGS dealer, and a contributor to the Red Book.
<< <i>With the prices rising, soon dateless Buffalo nickels will be worth more for their metal content than as dateless Buffaloes! >>
What are dateless buffalos going for now? I understand they are in demand for jewelry and native crafts.
Worry is the interest you pay on a debt you may not owe.
"Paper money eventually returns to its intrinsic value---zero."----Voltaire
"Everything you say should be true, but not everything true should be said."----Voltaire
<< <i>So why doesn't the mint change the composition of the two coins to put production costs back in line and save the tax payers some $$$. >>
It's probable that fabrication costs for any material would be over 1c so the worthless
penny can be made out of no material. It will be a drain on the economy until it is elim-
inated. Fabrication costs plus material cost for a nickel size coins could probably be kept
under 5c until the aluminum price about doubles. This would make a good stop-gap meas-
ure but what's needed are long term solutions or the end of inflation. We relly don't need
the nickel anymore either since it's so low value but it's needed to make change until the
dime or quarter is eliminated.
What a mess. This is what you get when you're afraid of change. But we keep voting for
more of the same and that's what we're going to get.
<< <i>
<< <i>With the prices rising, soon dateless Buffalo nickels will be worth more for their metal content than as dateless Buffaloes! >>
What are dateless buffalos going for now? I understand they are in demand for jewelry and native crafts. >>
15c but buyers are scarce. Nickels are worth 7c and five years.
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ANA - Pay As I Go Member
As if the US mint can control the world copper market.
As if by banning their melting, the mint will in any way keep them from being Gresham'ed out of circulation.
and if they can tell you you can't melt copper cents, what of pre-64 silver coins? What about gold and silver eagles? Kruggerrands suffered for years vs. other gold bullion coins, and I think they still sell at a discount over the Maple Leaf, Eagle, etc. because of the politics of apartheid.
So why would anyone pick Eagles when the mint can outlaw their melting? That's Gresham's law, too. If 300,000,000 Americans can't melt their eagles, but there is no equivalent law or possible law regarding Pandas or Maple Leafs, which one do you want to own?
--Severian the Lame
Coin's for sale/trade.
Tom Pilitowski
US Rare Coin Investments
800-624-1870
As much as I hate to say it, the cent and nickel have their uses at least as placeholders, and aren't going away until we go 100% electronic with our money.
-- Adam Duritz, of Counting Crows
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Menomonee Falls Wisconsin USA
http://www.pcgs.com/SetRegistr...dset.aspx?s=68269&ac=1">Musky 1861 Mint Set