Bills vs. Coins.. Let me get this right!

It' costs the U.S. Bureau of Engraving .06 cents to print a 1$ Bill, it costs the U.S. Mint .06 cents to mint a $1 coin.

A bill lasts 6 months, a coin 15 years.... so shouldn't the government be making 30x the amount of money manufacturing bills vs. coins?

Part 2.. The Federal Reserve orders money from the mint.. they pay $1 for $1 regardless plus a surcharge, so the same federal government that is making big money manufacturing bills and coins, is paying full value plus to distribute this currency.

So... how is the government loosing money making bills..it's paying itself say $2.05 a year for those two singles vs. $1.05 for that single sacagawea. In the long run the government is paying itself $2.05 x 15 years for the same amount of currency as a single $1 coin.

So am I daft, or missing some point?

 

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"The distribution of coins differs from that of currency in some respects. First, when the Fed receives currency from the Treasury, it pays only for the cost of printing the notes. However, coins are a direct obligation of the Treasury, so the Reserve Banks pay the Treasury the face value of the coins. "

Cut and pasted from the Federal Reserve website.

 

Yes it would be considerably cheaper to use coins rather than notes. However that decision is not one of simple economics. It's a political decision, and, as we all know, politics and common sense are often mutually exclusive.

 

there are real benefits to using bills over coins.

 

why do people not like dollar coins? if it were up to me i would make the cent, nickel, dime, quarter, half, dollar, two dollar piece, five dollar piece, ten dollar piece, twenty dollar piece, fifty dollar piece, and 100 dollar piece. if coins last 30 years why arn't they doing this. bills last only 16 months. i dont seem to understand why they made bills in the first place. but, the coins would start to get pretty heavy in our pockets.

 

Ok I will bite tell me why

 

It doesn't matter what the Fed pays or the Treasury charges for coinage or paper money since both are branches of the Federal Government. When you sale something to youself there is no real profit - it amounts to nothing but a bunch of accounting entrees moving revenue and expenditures from one department to another. Trading a newly printed US paper dollar for a mutilated US paper dollar does not increase the money supply and therefore does not create any real profit and actually increases expenditures for the US Government overall. Due to the intrinsic metal value of copper cents and silver coinage - replacing these with zinc cents and clad coinage does produce a profit.

 

"Bills vs. Coins.. Let me get this right!"

Actually it should be the Bills vs the Jets.

And the Jets win!

 

cheapies

 

justafarmer is basically correct in ascertations of where cost come from and go. Please note the cost of making coins or currency is ambiguous to say the least. The cost reported are lacking the basic expendatures that one would occur if in buisness to make anything. For example if you owned a business making bolts. You would have to have a building, machinery, personal, taxes on the building, building and office maintenace, washrooms, water bills, phone bills, gas bills, electric bills, desks, bookcases, filing cabinets, computers and on and on and on. Then there is insurances for the buisness, yourself, personal, etc. Then naturally there is the material to make the bolts, the shipping of the metal to you and the shipping of the bolts out. ALL of the above would have to come out of the profits of your sale of bolts.
Not so with our Mint. Almost all of the above is paid for with our tax dollars and not included in the cost of productions of coins or currency.
IF our government included all of the above in the cost of our monitary system, a cent would probably cost a few hundred dollars.

 

I would add that the Federal Reserve also receives no funding from taxpayers. FRS member banks receive a 6% annual return on their investment in the Fed, and the balance of the profits are returned to the Treasury. Significant profits for the Fed come from currency transactions with foreign central banks, so I don't believe it is correct to assert that it doesn't matter what the Treasury charges the Fed because a lot of the cost is passed on to other countries buying our currency. I believe I read someplace that requests for currency from foreign central banks now exceeds requests from domestic banks, so it is probably more than 50%.

 

Bills vs. Coins?

I thought they were playing the Jets this week.

 

well...for one I don’t carry a coin purse around, I carry a wallet which holds my bills just fine nor do I want to change that...to do like suggested above and turn ALL our money into coins would not be good for businesses that deal with a lot of money, changing just dollar to coins would be a lesser problem but still people in business would complain.

The obvious benefit of bills over coins is weight and ease. People who work in small / medium retail will often find themselves with many one dollar bills (and other bills)....my mother runs a snack shop at a race track and at the end of the day she has a huge amount of low denomination bills.

What do you think SHE would prefer...to be able to strap those lighter bills into a stack, throw them into a money bag and take that lighter bag to the bank? Or do you think she would rather deal with a large amount of heavier coins (more than she already does) into a sack and roll them or lug the much heavier sack/s to the bank. I can tell you that I KNOW what she would prefer.

Anyone who has worked in retail and had to prepare a drop off at the bank will know this and the more ones you end up getting at the end of the day...I would think the less coins you want.

Don’t get me wrong…I like the idea of dollar coins as a collector but the business side of me sees that there is a reason why bills are preferred by retailers and a bunch of collectors longing for circulated larger denomination coins wont change the fact that bills are lighter, take up less space, easy to handle, easy to carry, folds, etc…there are simply jobs that require a person to carry and deal with a lot of ones and if its between metal and paper…business, IMO, will choose paper.

 

Bills vs coins?

Credit card!

 

Please understand that I don't mean to offend anyone here, but your arguments against dollar coins are simply ,in reality, not valid.The arguments come from a rather emotional perspective without any real experience of using coins instead of bills.
Here in Canada we have had one dollar coins for 20 years and two dollar coins for 10. I have never been in any danger of having my pants fall down or my pockets burst. I have never heard a retailer( and I work in retail) complain about handling problems and most vending and change machines will accept both 1 and 2 dollar coins. I also don't remember hearing any great uproar from the vending companies.It is very common to see examples of both these coins from their first year of issue so I don't think anyone can argue that a coin will last many,many times longer in circulation than a paper note.
Most young clerks and cashiers have never seen a one or two dollar bill and wouldn't know what to do with it if one was presented.Once you get over the original emotional response you will find that in practice it is really a pretty good idea.

Bill

 

that what I do...credit and cash card...I dont use cash much these days at all.

 

It would also cause the cash register drawer's to have to be redesigned, and send the cashier's to retrained to count what is essentially change back, instead of note's and a little bit of change, then you would have to take into consideration who usally work's the register's, anymore your lucky if they have H.S. diploma.

If the note's are taken out of circulation ( wouldn't happen for year's ), we wouldn't have anymore radar's or star note's to look for anymore or any other combination of #'s that we try to find

JUst my take on it

John

 

It would also cause the cash register drawer's to have to be redesigned, and send the cashier's to retrained to count what is essentially change back, instead of note's and a little bit of change, then you would have to take into consideration who usally work's the register's, anymore your lucky if they have H.S. diploma.

Just 3 or 4 dollar's worth of change is heavy enough....couldn't imagine carrying 3 or 4 $10.00 coin's and 3 or 4 $20.00 coin's some $5.00 coin's and $1.00's.... I think that the $1.00's would start collecting in your pocket like the quarter's do know


If the note's are taken out of circulation ( wouldn't happen for year's ), we wouldn't have anymore radar's or star note's to look for anymore or any other combination of #'s that we try to find

Just my take on it

John

 

This thread has been very interesting and very informative, one of the best threads we have had in a long time. Sharing knowledge and opinions is why our site is the best on the web thanks to all.

 

Money sold to foreign banks is based on the exchange rate (trading value of the dollar) of the foreign currency received. Delivery costs may be charged but production cost has no impact on the exchange rate.

As to the mint selling coinage to the Federal Reserve these are intra-governmental transactions which in reality only push expenditures and revenue from one department to another but have no impact on the bottom line of the US Government viewed as a whole. There is no real gain in the above transaction because the US Mint and The Federal Reserve are both part of the US Government.