Modern Coin and Banking

I work for a major bank in something akin to a very VERY large vault.

There's one burning question that's been bugging me for a while.

At the bank, we have several washing-machine-sized coin sorters for processing incoming coin. If you've ever been to a supermarket that has one of those "CoinStar" machines that you can dump large amounts of loose change in and it prints a receipt for you to go get cash from customer service (minus a fee, of course), it's like an industrial version of one of those.

Now, when we dump coin into the machine, it passes under a magnet. Since U.S. coin is mostly zinc, it slides right by the magnet into the sorter. Most foreign coin (Canadian, British, Euros, several Latin American coins to name ones I've specifically seen), however, is mostly steel and will stick to the magnet and not go into the sorter.

What I'm wondering is, 1.) how did the United States mint swing that little gem? How come we get to use non-magnetic coin, while so many other countries are using magnetic coin???

and

2.) I'm all the way down in Florida, although we get a pretty remarkable amount of Canadian coin (yeah, tourists! ) . . . but c'mon . . . There's *gotta* be more U.S. coin winding up in Canadian bank vaults than vice versa . . . so how do their coin sorters separate large quantities of U.S. and Canadian coin? Bear in mind, these machines are expensive as-is, so an elaborate system of electromagnets and conveyor belts is just not practical, and the other approach--saying "heck with it" and sorting the U.S. coin with the Canadian coin could have some seriously negative effects on banking and currency exchanges.

Any thoughts would be greatly appreciated.

Thanks!

-OC

 

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You make a good point. The large banking systems have been using this equipment for quite some time. That is how we get so many 43 steel cents from our local bank. I have never heard the explanation for why the current metals are used in our coinage. My guess would be because of cost and the difference. To be able to quickly identify American coinage from its counterparts would seem to be a good thing.

 

One difference is that in America, American coins are legal tender. Coins are NOT legal tender in Canada. Coins come from the Royal Candian Mint. Banknotes come from the Royal Bank of Canada. Loonies and Twonies (and other coins) cannot be exchanged for paper money on demand. Only banknotes are legal tender. That is the way it is in most countries, actually. Coins are a convenience, tokens for money. One exception was the pre-euro money of Greece. Coins came from the national Mint and so were legal tender. Banknotes came from the Bank of Greece, a nominally "private" enterprise and were not legal tender.

Many nations have magnetic coins because they are sandwiches built around a steel core. The Winnepeg Mint has a patent on one way to do this and they make coins for other nations under contract.

Michael
ANA R-162953

 

And from the science perspective, only iron, nickel and cobalt (commonly) metals are magnetic. Zinc in the form the mint uses has no properties of these metals in the alloy, while most steel and other coinage outside of the US has some iron alloy based properties.

 

Most modern US and world coins are cu/ni. Nickel is highly magnetic and expensive but loses its magnetic properties with even a small amount of alloy. The cu/ni clad US coins are mostly copper which is very weakly magnetic. The only zinc US coin is the cent. There are several steel, iron, or steel clad coins which are current world wide. These are often avoided because they are magnetic and as such can be magnetized or because of the trouble with rusting. Stainless steel is sometimes used also but does not take a strike well and wears dies quickly.

 

Thanks GDJMSP. I had thought this site was defunct and deleted it from my favorites. Then I had trouble registering because I was still registered.

This is a great site and I hope to post more.

 

I don't think this is quite true. Canadian money is worth less than US, so it would be more, ummm, "profitable" to slip Canadian money into rolls here in the US. Since the US$ is worth more than the CDN$, any US change that crosses the border north would probably be quickly removed and redeemed for a profit.

 

Remember many Canadians love Florida vacations, so "us" Florida people see a lot more Canadian change than many other states do.
Nick

 

I'd seriously think that cities close to the border would see a lot more. Americans and Canadians will both be making day trips to the other country, go shopping, and wind up with much more of the other country's coin in their pockets and car seats than those who have to board a plane and fly to Orlando.

Seriously, how much loose change are you going to bring on an airplane ride--metal detectors notwithstanding.

-Nick

 

Agreed, border cities probably see as much or more than I do. I didn't think about that. But still I think we get more than most cities. Last year in Canadian coinage alone I bought/sold $15k or a bit more (Face Value).
Nick

 

I live on the Niagara river(Canadian border) and Canadian coins are a common site. But because they are so common everyone knows the value and they don't spend at face value. The Banks will not accept coins for exchange and check all rolls turned in with a magnet. The exception is the cents, They spend just like US cents. If you were to check a cash drawer anywhere around here you would find about 5-10% of the cents were canadian.