Featured Opinion/Editorial - United States Coinage Needs Overhaul Now!!!

I was not old enough to live through it, but from readings have heard these reasons given. Yes, the fact it was a memorial coin was a very large factor, (try to find a circulated 64 half, I dare you, the only one you may find would be a pocket piece), but also the silver hoarding disproportionately affected halves. I read an article from 65 or 66 telling people to concentrate on halves since you get more "silver profit" per coin, and that dimes were really not worth it. Of course it doesn't make sense, a dollar face is a dollar face, but at least some people were concentrating on getting the "big silver coins" first.

 

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That was a good article, and I appreciate the topic, so I will offer up another perspective. I think what you are seeing with our coinage is the perfect example of Gresham's Law. The problem isn't that metal in coins is getting too expensive, but rather the fiat currency that it is denominated in, is being reduced in purchasing power. Coinage is always a problem in fiat money schemes and eventually coins are either re-denominated, or they disappear all together. The USA is entering the phase where this becomes necessary else the metal value of coinage prevents them from further devaluations.

First they remove gold, then they remove the silver, then we go to full fiat, and less than 10 years later they have to remove 95% of the copper from pennies, now even clad coinage is too expensive. The Mint has been ordered to look at even cheaper alternatives. It won't matter. As fiat continues to go deeper and deeper into the abyss, anything becomes too expensive and the coins will be eliminated. When Zimbabwe was printing $100 Trillion notes in 2009, a coin made of real metal, made absolutely no sense at all. What we are seeing in the USA isn't anything new. The good news for coin lovers is that when the fiat system eventually collapses, coins will make a return. The next generation will promise that it won't be allowed to happen again. This has been going on for longer than when Gresham observed it in the 1500s.

In regards to the 1/2 dollar, I think it disappeared more due to this issue rather than the death of JFK. in 1950, the average salary was ~$3000/year. Or rather $57/week. So at that time a 1/2 dollar and dollar coins represented a good bit of buying power. A 50 cent coin would purchase a bag of groceries and this is why people carried them. By the 1970s, inflation had gotten so bad that 50 cents didn't buy much at all and the large coins became too cumbersome to buy anything useful. I think you have the same issue today with the dollar coin. I bought a $3 transit ticket for the train at a ticketing machine and paid with a $20 bill. The machine returned 17 one dollar coins. What does one do with 17 coins while standing on a train platform? Exactly. This is why people don't use them. They don't buy enough to be worth the inconvenience of carrying them.

 

well, a half dollar face is a half dollar face... The Half Dollar has the same amount of silver (12.5 grams) as 2 quarter dollars (2 x 6.25 grams), but a standard silver dollar (26.73 grams) actually has more silver than a dollar's worth of lower denomination coins.

 

I don't know if anyone has considered this in their Half Dollar coin demise theory, but don't forget, vending machines don't accept Half Dollars, and they never have. Machines handle the new dollar coins because it makes sense to, but it also makes sense for them to accept Half Dollars which they still don't. If there's no use for the Half Dollar coin, they will lose all utility and fade into the sunset as well as into the history books.

 

Well, regarding that point, what is sad is the only reason that our bullion is attractive is that they stole old designs. How sad is it that even the Treasury recognizes they cannot come up with an attractive design, so to try to generate sales has to reuse century old designs.

We have had this discussion before, but to tie it to Mike's OP, I would say for a new coinage system we should invite our nations greatest sculptures to design the coins like Teddy Roosevelt did. All of these panels and committees really dilutes the art. I bet if two committees added their "input" a century ago we would not be looking back as fondly at the coins produced then.

We also need, (in my perfect little world in my mind), to put relief back into coins. If they redo the coinage system so they are making seignorage again, they can afford to strike coins with relief. I was rearranging some stuff the other day, and happened to open up my washington quarter book. I pulled out of my pocket a modern washington quarter. DANG! Our modern coins look like monopoly money! Was a sick little joke they are compared to how we used to strike coins 3 dimensionally. The extreme lack of relief is a lot to blame for ugly coins as well, as no design can look very good struck that way. If you eve want to get mad at the mint, pull out a coin from the 60's and compare it with a modern one and see what I mean.

Just my opinion of course.

 

Of all the people here to say that, it surprises me to see it's you, Chris. Being the ancient coin guy you are, surely you've noticed that most ancients do the same thing...no denomination ot statement of value whatsoever. The bearer and receiver just had to know what the piece was worth and business was conducted.
Guy

 

True, and its probably the greatest shortfall of ancient coinage. However, most ancient coins were bullion, so always worth their weight in PM at least if a foreigner didn't know the monetary structure.

You are vey right, though. denomination was probably the last part of what we think of as a coin to be added regularly to coinage. Many think dates, but the Romans and some Greeks dated their coins in regnal years, (which was the only date that matter back then, they didn't know they were living in 100bc), so dates predated denominations by quite a while.

Btw sir, my comment was more comparing modern US coins versus the rest of the world's modern coins.

 

Don't get mad at the mint. The reason for that flat relief is the same problem. The falling value of the dollar means the coins are worth less and less and more and more of them have to be made. That means the presses have to run faster and faster. That cuts down on the time for the striking of each coin. The metal can't flow fast enough to fill the die in the time allowed so the relief is lowered. Down time on the press needs to be reduced so die life needs to be extended. Lowering the relief even more extends the die life. It becomes a vicious cycle resulting in lower and lower relief.

 

I understand they are under cost pressure sir, all companies are. However, are they under such cost pressures for commemoratives? That is what leads me to think that they believe low relief is an acceptable type of coinage. If a coin is a commemorative, surely half a cent greater cost per unit is not a major concern. Why then do they take pretty designs like the 88 Olympic $5 and make it less attractive by being low relief? Looking at classic commemoratives versus modern show a pretty stark contrast.

For circulating coinage, one would hope if they are making positive seignorage again, they could afford to make our coins more attractive both from a design and relief point of view.

 

Oh, I know that. I just had to be a wise guy for a second.
Guy

 

I personally like the new One Cent reverse. It's the best new design since the bicentennial quarter dollar.

 

As with everything else in government,anything which needs to be done right away will take 5 decades.

 

It was inflation that was the primary killer of the half dollar. In the early '60's and right up till around 1968 you needed nickels and dimes for vending machines. Even a pack of cigarettes was only 20c. Now days you'd get carpal tunnel syndrome trying to feed enough quarters to buy a pack of smokes. But the vending machines were never converted to take half dollars. When prices started higher in the late-'60's people who used machines needed quarters so would often hand back any half dollars in change and request quarters.

Half dollars never did circulate as fast as quarters. If you had 50c coming back you were more likely to get two quarters than a half dollar. In those days coins actually "circulated" meaning people spent them as they had real value. When people paid 50c they were more likely to use two quarters than a half. Of course the half dollars did circulate but it was only at about half the velocity of quarters. When the Kennedy was issued the country was in the middle of a vast coin shortage and people were hoarding these coins not only because they depicted Kennedy but because they were silver.

There really wasn't very much hoarding of the 40% coins. The mintages were high which might lead one to believe there was but in actuality the mintage was only high so that the FED could maintain inventories of half dollars even as the old Franklin ansd walking halfs were being removed by the general public for their silver. Most people (even Kennedy fans) held the 40% coins in disdain. There were very few 40% coins being melted in 1979 because most of these had already been destroyed by the FED. Half dollar circulation plunged in 1964 and simply never recovered. Everytime someone handed back a half dollar in favor of two quarters it was another straw on the camel's back.

Even though the 40% coins were fairly well made it is difficult today to find nice gemmy coins. While all of these are actually common in MS-60 there was a brief spike in the price back in 1980 when people realized just how few of these survive.

The half dollar continued to circulate all through the 1970's albeit at extremely low velocity. Getting three or four a year was typical by the end of the decade which was half of at the start. After 1980 the half dollars were almost strictly made for casinos and most of these show that distinctive wear. I often wonder where all those billions of cu/ ni Kennedys are now. It's hard to believe the FED stores so many coins and most branches report zero on premises. Where is the huge warehouse full of half dollars? Of course there are many millions in sock drawers and change jars but there are a great number seemingly unaccounted for.

 

Nice post Cladking. As for where they are, I would not underestimate sock drawers, etc. My great aunt passed away and she had coins like this, (some silver, but bicentennial halves, etc). My aunt got them. When she passed away her daughter got them, along with all of the halves SHE had "collected". My cousin has a few hundred halves just from two lady's worth of getting them in change and putting them aside because they are "different". I am no different, even though I know they are not worth anything if I get a half or $2 bill it usually goes into a change jar instead of getting spent.

I would say there are billions and billions of these cumulatively in jars across america.

 

You may well be right but enough were made that everybody could have eight of them and relatively few people I know have any at all. A lot will have been lost or destroyed in fires and floods and some people have more than their share (I certainly do), but I'm just not seeing the numbers necessary to account for them all. Obviously everything has to be somewhere. Perhaps they are in sockdrawers.

The coins in storage provide a lot of clues about where they are because their condition tells you where they've been. They seem to be saying that there must be a significant storage of them somewhere or that some have been melted and not reported.

 

I think the penny should go the way of the rotary phone. Besides making the denomination more collectible it is practical. Vending machines don't take them, you can't purchase anything for less than a dime it most places, and if people do multiple transactions the law of averages will treat everyone fairly enough even if they do calculate price to the penny.

Now for the more important issue of the 5 cent piece (at least from my perspective ). I think the "nickel" in recent years sometimes cost more to produce than face value and there was a law preventing its export and melt to stop the destruction of this beautiful coin. Perhaps they could alter the weight or composition so seignorage could be assured. I'd certainly favor the consideration of Felix Schlag's original 3/4 view of Monticello even if the coin were shrunk a bit. Ultimately though, I think Ni should be retained as an appropriate base metal; otherwise I'll have to change my collecting focus.

 

I'm unlike the rest of the U.S. population. I love to ask for $2 bills and half dollars at the bank and go spend them everywhere I can to **** people off, while the dumb American sheeple keep these denominations out of circulation really for no good or logical reason. Vending machines prove the laziness and stupidity of the American public as they don't accept legal tender $2 bills or 50 cent pieces (mind you the only lawful legal tender in the United States is gold and silver coinage). Americans are simply dumb, lazy, mindless people. It depresses me to live here and if I want to leave I have to first be harassed by the TSA and Department of State.

 

Well Said Mike. Hopefully, our government will wake up to this fact.

 

Click on the “get involved” link and send a message to your Representative and Senators to replace the rag-dollar with the dollar coin and save us 4 to 10 Billion Dollars.

http://dollarcoinalliance.org/

http://tinyurl.com/7nerv6w

http://tinyurl.com/7xzhg7b


http://tinyurl.com/7rvjlrc



http://dollarcoinalliance.org/2012/...-office-again-advocates-transition-to-1-coin/

The above article has links to all of the GAO reports, including the newest reports that address questions that Senator Brown from MA (where Crane Paper Company is located) asked. If you read it, you will see that the GAO folks were flabbergasted by at least one of the questions (I’m not sure if they felt it was illogical, silly or irrational).

One of the most interesting things the pro-dollar coin forces have done to cling to the rag-dollar is the investment in millions of dollars of new equipment that is used to determine currency fitness at the Federal Reserve. Yes, the new goal is at least 50 months of life, up from the old 18 month life of a dollar bill. Of course, the impact to citizens and business of this new fitness standard is yet to be felt. You see, these old notes will be in much worse condition than before and the new equipment has just started to be used. You are not yet seeing 50 month old dollar bills, but you WILL. And they will be a massive problem for self-check stands, vending machines, and businesses that use currency counter and sorters. They will be rejected and jam in much greater numbers and the cost to the economy is going to be fantastic.

Imagine not being able to buy your lunch food from the vending machine in your lunch room because the machines keep rejecting your tattered old bills? How about not being able to pay for parking when you leave a garage with an automated pay station because it rejects your bills? Not being able to get your train or bus ticket/pass?

And, of course, the refusal to acknowledge that seigniorage is a real thing is one of the ways they pro-dollar bill folks attempt to discredit the GAO reports. Gee, who know the reality of the budget and the way the money supply works? The GAO or the pro-dollar bill people?

The Federal Reserve and the Crane Paper Company make a lot of profit from dollar bills at the taxpayers expense. The anti-dollar coin campaign is getting worse and the facts are being twisted and becoming outright lies. And the anti-dollar coin attack dogs are also engaging in personal attacks against anyone who dares to speak up in favor of the facts and the dollar coin.

Another argument for the dollar bill is that production of the paper at Crane Paper Company creates jobs. Let’s see….$146,000,000.00 per year savings for the taxpayers vs. how many jobs? Let’s say it is 200 jobs. That is $730,000.00 per job!! What an insane waste of taxpayer money! Yes, I know that the employees are not paid $730,000.00 salary, but the cost to the taxpayer to keep the dollar bill in production is that much.

And businesses have already testified that they would save money year round using dollar coins instead of dollar bills. It costs less to handle and process dollar coins than dollar bills. As with any other efficiency improvement, there will be some initial capital investment – such as buying new cassettes for automated change dispensers at checkstands – but those investments are always made and business does this because they know they will get a positive return on that initial investment. They will save time and money on each transaction and on handling the money in the cash room. AND I already mentioned the problems that will cost business money when the older dollar bills flood the money supply and rejection rates and jams increase.

http://dollarcoinalliance.org/endorsements/

 

I tend to agree with this. We so very rarely get a half that when we do we keep them. It's probably the same with many people. I think the rest are tied up by roll searchers LOL!