Why don't we use steel in our coins?

Run a magnet over a bucket of world coins, you will find many will stick to a magnet, and many countries use steel in their coins.

As of posting, the metal content of a nickel is 4.5 cents. I doubt the mint is making much at all after costs of minting, transportation, etc.

So I'm surprised the US has not considered switching to a steel nickel with a nickel plating.

 

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One answer - the vending machine industry is completely against it. Steel coins would be magnetic - which is what they use to reject Canadian coins.

 

Then how did vending machines in other countries manage to get by, or is the vending machine industry in the US too lazy to change stuff out?

If not steel, I guess zinc would work. Much cheaper than nickel by the pound.

 

You'd be amazed - the vending machine industry has lobbyists in Washington - it is a huge business when you consider how many of them there are. We have zinc in our cents thanks to the lobbying efforts on behalf of Jarden Zinc.

 

Steel rusts.

/thread

 

Honestly, it doesn't matter if raw materials of a coin cost 110% of the face value of the coin, so long as there isn't en masse hoarding of the coins. Nickel is a great material for coins, if you're able to generate necessary pressure to impress a design upon them. Due to the hardness of the metal, it takes a while to wear them to the point where you won't recognize _what_ the coin is (denomination and country). The reality is that seigniorage will always make the business of making money profitable. The Mint issues a nickel at a cost of, say, 8-cents. The nickel adds about 48-cents of value to the economy. Net cost minus-40-cents; face value 5-cents; net profit to government: 35-cents.

And, yeah, steel rusts. It was a failure for pennies. This is essentially the same reason we don't have pure aluminum coinage: aluminum corrodes at high rates.

 

Zinc is too soft, too chemically reactive, and even a bit too toxic.

 

Do you have any idea of how many changers are out there or what the cost would be to do something like this?

 

A modern vending machine can use all kinds of sophisticated criteria - from size and weight to electric conductivity and surface structure. Problem is, what do you do with machines which are older and not that clever?

In the UK they went from Cu-Ni to nickel-plated steel (using their aRMour technology - PDF) for the 5p and 10p coins in early 2012. Saved money in terms of production cost but apparently caused some trouble in the vending industry in the first phase ...

Christian

 

In the EU they knew that changes were coming and what the specifics of the coins were going to be well in advance. It seems as though the RCM in Canada acts with a lot more autonomy to just change coins around - look at their cents and five cents coins and how many different shapes, sizes, metal compositions etc they have had over the last 60+ years.

But the bigger factor that the vending industry should just consider - just eliminate taking cents and nickels in vending machines. Frankly I can only think of one machine( a horsey ride for small kids) in a grocery store that even takes pennies. A lot of the time with vending machines quarters are the name of the game since practically everything is priced in factors of quarters.

 

Well, the UK currently still is an EU member, but they were not involved in those changes. Or take Sweden where, in October 2016, new 1 krona and 5 kronor coins will be introduced, each with specifications that are different from the current ones. I'm sure there are more examples ...

But it's not that the US Mint has not had any plans to reduce production cost. This is an AP article from December 2012: http://bigstory.ap.org/article/us-mint-testing-new-metals-make-coins-cheaper Or see this topic: http://www.cointalk.com/threads/mint-reports-on-alternative-coin-materials.219018/

Christian

 

Drill a hole in them to make cheap washers ???

 

Christian - you note that the USM has approached this task - that is true. But the main problem is not the mint, but industry lobbyists in Washington that buy off US Senators - ie Crane and Company with paper production(from now deceased US Senator Ted Kennedy's district) and Jarden Zinc for cent blanks.

All changes to USA coins must be legislated through the US Congress - and we all know they are more concerned with personal enrichment and nothing really meaningful for the betterment of the American economy these days. It is the US Congress that mandated the stupid Sackie bucks and Prexibux that sit around in bank vaults - without eliminating the $1 bill - read Crane and Company.

 

In my opinion it does make sense that it is not simply up to a mint to change the specifications of coins. You do want others - from the vending industry to blind people - to be involved. But if that leads to what you described, something is wrong ...

Christian

 

Christian - many of the problems with American monetary policy lie squarely in Congress' hands - and guess what? They are currently on a long holiday in their home districts. In no other time in American history have we possessed such a meaningless, uncompromising, and wasteful legislative branch of government.

 

Tut tut. Politics.

Christian

 

The constipation of the economy me thinks.

 

I'm not sure I buy the argument that changing coin composition would be too costly for the vending machine industry. It seems that about every six months the machines where I work are replaced with ones that have latest innovation to keep people from getting free stuff. Considering that, in many cases, it would require a simple switch-out of old coin mechanisms for new ones (not the whole machine), it can't be much more costly than constantly implementing new anti-theft designs.

Also, keep in mind that the old coinage would still be around for years. Think about how many ~50 year old clad quarters you see and how long it will be before the currently circulating are no longer the vast majority of circulating quarters. This is especially true given that, for the foreseeable future, these coins really do not have enough intrinsic value to justify hoarding. So all of the machines would not have to be replaced at once. The older ones just wouldn't accept the new coinage. Keep in mind that it wasn't too awful long ago that you had to have coins to get anything out of a machine. If all you had was paper, you were out of luck. In fact, this is still the case in many places. So having money that won't work in a vending machine would not be a new experience.

All in all, I think the vending machine industry would probably survive a switch to new coin composition.

 

Hmm - I can remember slipping dollar bills into vending machines at work back in the late 1980s. Frankly I don't know why they even bother tooling the machines for nickels and dimes since practically nothing is priced in other than quarter multiples these days. I can even use Ukrainian hryven bills to buy small cups of coffee or tea, since hryvnia coins are very unpopular like the US dollar coin.

The tech is there, but the vending machine industry would lead you to believe that it would be the ruin of them.