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Message:: [QUOTE="lincolncent, post: 1161751, member: 22506"]This was my final English research paper for my English 1102 class. Figured y'all would like to read it. I think its pretty good but I could have used more sources I think, especially for the counterfeiting thing. Anyways, its my first paper about coins so... enjoy!  [FONT=&quot]Tyler Penland[/FONT]   [FONT=&quot]The Change Debate[/FONT]   [FONT=&quot]Ever since the 1484, people have been using dollar coins. The term dollar is derived from the German word thaler, which was the name given to an early large European silver coin. On April 2, 1792, Congress approved a bill that set up the monetary system of the United States. This bill stated “that the money of account of the United States should be expressed in dollars or unites, dismes or tenths, cents or hundredths, and milles or thousandths” (Yeoman 205).  Two years later, the first official United States silver dollar coin was minted. The first dollar coins were widely circulated. Even into the early 1900’s, people were paid in silver dollar coins. After 1935, the production of dollar coins was stopped mostly due to the depression. This ceasing of minting dollar coins introduced America to a new age of circulating paper money. Prior to the 1900’s, paper money wasn’t nearly as common as it is now. But, between 1935 and 1971, Americans began using dollar bills in replacement of dollar coins. The dollar coin was reinstated in 1971 but, because of its bulky size, was very unpopular. In 1979, the first small dollar coin was released. This coin was extremely unpopular as well because it looked like and was the same size as a quarter. The latest attempt at dollar coins came in 2000 and 2009, as the United States Mint introduced the gold dollar. This coin is small, but is golden colored instead of silver colored. Unfortunately, these coins have also been mostly unpopular due to the huge amounts of dollar bills being printed, and many Americans do not even recognize a dollar coin when they see one. In the past few years, however, a major push has been made to circulate dollar coins more widely. This push has been made for several reasons. Among these are that dollar coins are cheaper and tend to last longer and that coins are harder to counterfeit. Along with the good, though, are problems that would need to be addressed.[/FONT]   [FONT=&quot]First, let’s begin with the problems of switching. Most, if not all, of these problems occur when or shortly after the switch is made. During the most recent attempts to circulate dollar coins, the biggest problem the United States Mint has faced has been popularity issues. Most people simply do not want to carry dollar coins around in their pockets. The current metallic content of dollar coins causes them to weigh 8.1 grams so they can become quite heavy in large quantities (Yeoman 226). Another problem is businesses. Many businesses do not like to see dollar coins because very few people want them back in change so the business has to go through the trouble of sending them to the bank. Also problematic are vending machines. Most new model vending machines are formatted to accept modern dollar coins, however older ones are not. This would cost the vending machine industry tens, if not hundreds of millions of dollars to upgrade their machinery. In addition, if the metallic content of the coins was changed to make them lighter, even new vending machines would have to be reformatted, adding more to the cost. Another cost oriented problem is getting enough coins made to replace current dollar bills. According to the US Treasury, there are “billions” of dollar notes in circulation. According to the Dollar Coin Alliance there are approximately 2 billion dollar coins in circulation with another 1 billion sitting in Federal Reserve vaults due to lack of demand, with more being minted each day. The initial cost of phasing out bills would be more expensive than current procedures, but in the long term this would change.  [/FONT]   [FONT=&quot]Undoubtedly one of the biggest concerns is that sometime in the next thirty to forty years, well within the lifespan of the average dollar coin, cash will become obsolete. Just in the last decade cash has been becoming increasingly rare. As recent as 1999 cash and check sales equated for nearly 60% of total sales in the US, with debit and credit cards sales making up the other 40%. In 2005 these numbers had been reversed and the credit/debit train has been advancing ever since (Simon). Skeptics of the dollar coin transition argue that in the next few decades, no one will be carrying paper money, much less coinage. Ultimately though, the amount of money potentially saved during the next few decades outweighs the possibility of cash becoming obsolete. [/FONT]   [FONT=&quot]            The problems mentioned may seem large, however they have simple solutions. To see this, we need to look at what one of our neighboring countries did 25 years ago. In 1987 the Canadian government announced that over the next two years, it would phase out the dollar bill and replace it with the dollar coin. In 1989, the dollar bill was officially withdrawn from circulation and they have been using coins ever since. They overcame the popularity issue by not giving people a choice. This may seem harsh, but the public was surprisingly willing to make the switch. The lead time they gave the public also allowed vending machine companies to spread their upgrades out over the two years, greatly reducing costs and creating temporary jobs. The only problem they did not directly assess was the weight problem of the $1 coins but they did come up with an effective solution: a $2 coin. In 1996, the Canadian government issued a $2 coin. This helps with the weight problem because it makes change for a $5 much easier. Instead of having to carry 4 dollar coins, they now can carry only 2 two dollar coins. The creation of this two dollar coin greatly pleased the public and both these coins circulate easily in Canada. If the United States were to adopt a similar program, we could easily and effectively overcome the cons of changing to a dollar coin. [/FONT]   [FONT=&quot]            Now that we know the cons and how to overcome them, let’s take a look at why we would want to switch to coins in the first place. The first and biggest argument for dollar coins is that they, in the long run, are much cheaper to make. According to a study by the Congressional Budget Office, it currently takes 3.8 cents to make a dollar bill, whereas a dollar coin costs 8 cents to make.  However, a dollar bill lasts only around 12-36 months compared to a dollar coin’s average life span of thirty or more years. Using these numbers, the Congressional Budget Office calculated that the average annual production cost of making a dollar bill is 2.5 cents. However, the CBO also states that[/FONT]  [FONT=&quot]y contrast, if the government meets the public's need for one-dollar currency through coins,  average annual production cost is only 0.27 cents (8 cents divided by 30 years) for each dollar in circulation. In addition, the more frequent and higher processing cost of notes adds to the cost of keeping a dollar note in circulation. Therefore, the government saves between 2 cents and 3 cents per year for each dollar coin that replaces a dollar note. That would add up to a savings of $120 million to $180 million a year if $6 billion in notes were replaced by an equal amount in coins (Blum).[/FONT]  [FONT=&quot]Needless to say, $180 million dollars a year is a lot of money. Multiply this by ten years and you have saved $1.8 billion dollars. Considering our current economic situation and recent government discussions about budget, $1.8 billion saved dollars could help to alleviate many budget problems. Coins can also save money in another way. It is estimated that around $3 billion dollar bills are shredded each year by the Bureau of Engraving and Printing. This means that of the average 4 billion dollar bills printed each year, 75% of these are used to replace shredded ones. This problem can be virtually eliminated with coins because, as coins are pulled out of circulation, they can be melted down and used to make new coins. There is no way to know exactly how many new coins could be minted from old ones, but one can imagine that this could potentially save billions of more dollars. According to an article by the Dollar Coin Alliance (DCA), which is an alliance of small businesses, market watchers, trade associations, and private companies, when Canada switched from one dollar bills to one dollar coins, they realized government savings of ten times the initial estimate. The DCA also presented a pole in which, after the potential government savings were explained, Americans favored one dollar coins over bills by a two to one ratio (Perry). [/FONT]   [FONT=&quot]            A second reason for switching from dollar bills to dollar coins is the fact that coins are harder to counterfeit. Historically and excluding the counterfeiting of valuable coins, bills have been counterfeited much more often. The biggest reason for this is that coins are much more expensive to counterfeit. With bills, all a counterfeiter must do is create a paper that closely resembles United States currency, run a real bill through a scanner or copier, and print them. The most recent counterfeit bills were made out of genuine US currency paper that had been washed out and reprinted with a higher denomination. Modern security features help to make this harder to do, but if someone printed old bills, they could be virtually indistinguishable from real bills. Granted this can take a lot of time and effort, but it is much cheaper than counterfeiting coins.  To counterfeit a coin, one must be able to accurately redraw the design in order to copy it onto a die. Then, the coin must be the correct size, color, and thickness as a real coin. The final step would be to transfer the design off the die onto the coin blank accurately. Doing all this runs up a high cost for materials and can take a lot of time. It also is not very lucrative because the highest modern coin design is $1, and making counterfeit coins simply would not be worth the effort. [/FONT]   [FONT=&quot]            One other not well popularized benefit of dollar coins has to deal with the blind. Currently, it is virtually impossible for a blind person to tell the difference between a 1, 5, 10, 20, 50, and 100 dollar bill. If we made the switch over to coins however, the blind would be able to tell the difference between a one dollar coin and bills. The European Union has done this by designing their coins and currency in different sizes ranging from small to large based on value. The smallest value has the smallest size and the largest value has the largest size. This applies to both bills and coins in their currency system. If the United States were to switch to a one dollar coin, this would be the first step towards possibly making our currency system more geared towards all citizens.[/FONT]   [FONT=&quot]And so, as we move into an age where budget cuts are necessary, we must decide whether or not to make the switch from dollar bills to dollar coins. Using the information available and the examples of other countries, the choice seems not so much like a choice at all but instead a necessity. If we want to save money as well as create a longer lasting currency, we must make the switch. But how can we as citizens let our government know we want this change? Simply write a letter to your congressional representative stating your opinion. If we as Americans decide to make the switch, it can occur smoothly and without problems. [/FONT]       [FONT=&quot]Works Cited[/FONT]     [FONT=&quot]Blum, James L. "Congressional Budget Office - Testimony on Creating a New One-Dollar Coin." Congressional Budget Office - Home Page. 13 July 1995. Web. 08 Apr. 2011. <http://www.cbo.gov/doc.cfm?index=5499>.[/FONT]  [FONT=&quot]Dollar Coin Alliance[/FONT][FONT=&quot]. Web. 11 Apr. 2011. <http://dollarcoinalliance.org/>.[/FONT]  [FONT=&quot]Perry, Mark. "Switching To A Dollar Coin: Seems Like A No-Brainer." Save Smart, Invest Smart | DailyMarkets.com. 8 Mar. 2011. Web. 18 Apr. 2011. <http://www.dailymarkets.com/economy/2011/03/07/switching-to-a-dollar-coin-seems-like-a-no-brainer/>.[/FONT]  [FONT=&quot]Simon, Jeremy. "Debit Card and Credit Card Usage Rise as Primary Payment Choice." Credit Cards - Compare Credit Card Offers at CreditCards.com. Web. 18 Apr. 2011. <http://www.creditcards.com/credit-card-news/debit-credit-card-preferred-payment-1271.php>.[/FONT]  [FONT=&quot]Yeoman, R. S., and Kenneth Bressett. A Guide Book of United States Coins. Atlanta, GA: Whitman Pub., 2011. Print.[/FONT][/QUOTE]

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