What would happen to cent and five-cent coin values if the government decided to discontinue them?

A recent post on CoinForum gave the current cost to produce US coins. While down slightly from 2014, the cost of production and distribution is still more than face value for the cent and five-cent pieces. I'm very in touch with Norwegian coinage and over the past 45 years; they have done away with six lower-value denominations. Without trying to start a political conversation (not allowed, of course) the question is likely to be discussed by government officials under the new administration whether it would help the national debt to get rid of, at least, cent and five-cent coins.

What do you think the long-term effect would be on Lincoln Memorial cents and Jefferson five-cent pieces (thinking of higher grade coins only)?
Steve

 

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I don't see much movement in value, since they've been producing roughly between ten and thirty thousand tons of Cents a year for the last fifty years, and close to five thousand tons of Nickels. They're not exactly uncommon.

Of course, if there were a buyback and destroy program, populations would drop drastically and collectible value might just become relevant. That would probably be when those held longterm in collections and hoards would come out of the woodwork, and in my thinking high-end Populations would increase drastically because it would become cost-effective to have them graded.

 

As Dave said, the only way they could become rare is if they had a buyback program. They have made BILLIONS of pennies and nickels, so it would take a few hundred years for them to become somewhat scarce. Look at the 1944 wheat penny, they made a billion or two of them and can be found online for less than a dollar and even in pocket change. Perhaps they would be worth something in, say, 2000 years.

 

If the treasury discontinued production of any coins, their value wouldn't change at all. The coins produced in the past would still be legal tender at face value.

 

If they were demonetized then I would assume that it would become legal to melt them again. That would mean most would be melted. But there are still so many out there that if wouldn't effect the value of all but the top grade ones. If they simply stopped production but did not demonetize then it would make no difference whatsoever.

 

@rickmp, that is the interesting thing with Norway's cessation of lower denomination coins. There was an ingathering period, and after the expiration of that time frame the coins were no longer legal tender. It has happened with Norway's currency also. About every 20 years, plus or minus 10 years, they change currency designs and in the current case folks will have one year to exchange the old notes. After that, the notes have only collectible value and are not legal tender. Could the USA ever do this? Who knows?
Steve

 

The only money, coin or paper, that the US ever demonetized was the Trade Dollar. It was re-monetized with the enactment of the coinage act of 1965.

 

The US has never recalled any discontinued coinage other than gold coins in 1933. That recall wasn't very effective. The coinage act of 1965 ended that recall. I don't think that the US would recall older pennies if they were to stop producing them. The costs of a recall and demonetization would be tremendous.

 

@rickmp, thanks for the heads up about the re-monetized Trade Dollar. I was never aware of that. I wish someone would pass me one in trade, but not a CC (Chinese Copy). I was aware, of course, about gold coins.

Anyone ever hear of someone trying to pass a gold coin back in the 60's when gold was still $35/oz.? I was collecting back then, checked my parents' till in their café several times a day for good stuff, but never saw a gold coin.

Steve

 

My thoughts would be some dates may see a jump that people just didn't pay much attention to overall until it was too late but overall probably not much if any change. It might also depend on if they just naturally ween them from circulation leaving them in the wild for a while or if they actively start pulling them from banks drastically reducing the supply quickly. Pulling them could result in some run ups that may or may not be sustainable

 

The wise ones sent their gold to Europe, even a few years ago it was possible to find bags of $20s that had been sent there during the Roaring '20s. Think Rockefeller, Vanderbilts, Mellon etc.

 

Collectors would know gold coins were worth considerably more than their face value and wouldn't spend them. A great many non collectors were under the impression that gold coins were illegal to own and that they would get in trouble if they tried to spend them. I'm sure in many cases they probably thought they were no longer legally spendable. Gold coins pretty much disappeared from circulation by mid 1935. Especially after the official gold value was increased and the $20 gold coin had $35 in gold in it. If your SBA had $1.75 in metal value would you spend it for a dollar?

 

That depends. The copper ones are alloyed, and any scrap guy will have to separate out the zinc ones. This would have to result in a pretty substantial discount off the price paid for pure copper. How much, I really don't know. It might be more cost-effective to repurpose them as washers.

 

Melting gold (or silver) is one thing....copper/zinc/alloys...not so much interest.

So they want to discontinue $100 bills and pennies and nickels. The pennies make sense to me. The $100 bills make no sense.

 

Money laundering and criminal activity. The larger the bill the less they have to carry. That and it makes it easier for larger transactions to avoid being taxed

 

They are easily separated. I have a sorter I use to do it. I can get through a roll quickly. Industrial level machines would be much faster.

 

The highest graded coins will hold a premium in the future.
Not including wheaties, they have minted almost 1/2 trillion cents since 1959-date.
They need to bring back $500 and $1000 bills. It's a pain
carrying all these hundreds around.

 

They need to print more $2 bills. I always end up with too many $1 bills in my wallet. Only time I ever use $100 or $50 is when I go to a coin show.

 

I presently have about $36 worth of $2's in my wallet. They make great tips at restaurants etc.

 

@sakata, what type of sorter do you use? @scottishmoney, would you mind PMing me, if you feel so inclined?
Steve