Does Fed melt bronze for profit?

The Federal Reserve does not handle policies regarding coins. They only handle recirculation of current coins. The US Treasury handles policy regarding coins.

 

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but if you go to site all the rules are there
Even the the rules for damaged coins are there they tell you(banks) to send them back to the mint
Mutilated Coin Procedures
Coins that are chipped, fused, melted, distorted, or not machine-countable are considered mutilated. Only the United States Mint redeems mutilated coins at the value of their metal content. Mutilated coin should be forwarded via 'Registered Mail, Return Receipt Requested' to the address below with documentation of the circumstances:
Superintendent
United States Mint
P.O. Box 400
Philadelphia, PA 19105
(215) 408-0203
Any badly soiled, dirty, defaced, disintegrated, limp, torn, or worn out currency note that is clearly more than one-half of the original note, and does not require special examination to determine its value is not considered mutilated. These notes should be exchanged through a depository institution and processed by the Federal Reserve Bank.

 

um... any gunk found on pennies will be incinerated when they are melted.

 

During the 1964 to 1970 period the governments official line was that there was no reason to withdraw the silver coins from circulation and that silver and clad would circulate side by side for many many years to come. The whole time they were saying this the had two machines at two of the larger Federal Reserve Banks that had all of the dimes, quarters, an half dollar s that came back into the Fed from the banks run through it and it separate out the silver fom the clad. The clad was shiped back out to the banks. The silver wasn't. Those machines stayed in operation until 71 or 72 (cladking would know more exactly) by which time the declining amount of silver being recovered made it no longer worthwhile to run them.

Yes the Public got the lions share of the silver but the government made sure they could get as much as they could, while trying to encourage the public not to so they could get it.

 

I wasn't aware that they operated these in only two locations.

They operated at least from mid-'68 to mid-'69 but the official line was still that silver would circulate for years.

 

Technically silver is still circulating, so I guess they weren't lying (in the dictionary sense of the word).

Of course using that same logic, one could also argue that canadian coins circulate side by side with american coins.

 

I'm just going from memory here, but I don't think the Fed would be permitted to melt coins, although they could collect them and return them to the Treasury to melt if so instructed. I believe that by charter, the only assets the Fed can hold are US Treasury securities and loans to member banks. They can request and return coins to the Treasury as needed, but going into the smelting business would be beyond the scope of their operations.