Arcanum

Americans had better learn to like $1 coins. Minting coins saves the government a lot of money compared to printing bills because coins last so much longer. That's one of the reasons we switched to a $1 coin in Canada, and it was so successful they did the same thing with our $2 notes a few years later.

To be fair, a $1 coin today doesn't buy as much as a $1 bill did 25 years ago. I don't think the number of coins I carry has increased over time, just the mean denomination.

As for the Canadian penny law, the article was a tad inaccurate. It's not illegal to pay with more than 25 pennies, but the merchant is not obliged to take more than 25 pennies.

hfly

and what coin based countries miss is that while there is a "savings" in making coins rather than notes, there is a complex vlaue mentality which values notes more, and helps people understand "the value of a dollar (or Euro or GBP or whatever)" once you get rid of it mentally the value is lost.

cepheid

And yet both the Euro and the GBP are doing much better than the dollar, so... I don't really buy this argument. The "value of a dollar" can be taught, and people need to learn to think in numbers, not whether something is a bill or a coin. Because they may value notes more than coins is not an argument to stick with notes... it's an argument to educate the public.

tjl

In the discussion about US money, no one seems to have found it odd that, at first glance, the US 5¢ coin is larger (diameter and thickness) than the US 10¢ coin, even though both are made of apparently similar material. Also, the $1 coin is smaller than the 50¢ coin, although both are uncommonly seen in circulation (postage vending machines do give $1 coins in change).

The reason is historical. US coins in denominations of 5¢, 10¢, 25¢, 50¢, and $1 were once made of 90% silver, and sized in proportion to their denomination. They also had reeded edges, a way of making it easy to detect if someone were shaving precious metal off of the coin.

In the mid to late 1800s, the 5¢ silver coin was replaced by a 5¢ nickel (actually copper-nickel, with more copper than nickel) coin, due to the inconveniently small size of the silver coin. The new coin was larger and thicker than a 10¢ silver coin and had a smooth edge.

In 1965, the rising price of silver relative to the US dollar meant that the silver coins' face value was less than the value of the silver. That year, the 10¢ and 25¢ coins were changed to a "copper-nickel clad" composition, with copper in the center and copper-nickel on the outside, but otherwise retaining the size and designs (with Franklin D. Roosevelt and George Washington respectively), including the reeded edge. The 50¢ coin was changed to a "silver clad" composition, with 20.9% silver center and 80% silver outside; in 1971, this was changed to the copper-nickel clad composition like the 10¢ and 25¢ coins. The $1 coin, which had not been minted since 1935, was minted again for circulation in 1971 with the copper-nickel clad composition (and a new design with Dwight D. Eisenhower).

The $1 coins were not popular in the 1970s; a smaller $1 coin with the same copper-nickel clad composition was introduced in 1979 (with a new design with Susan B. Anthony). This was also unpopular, being only slightly larger than the 25¢ coin.

Starting in 2000, dollar coins with a brass color were minted for circulation. The brass color was intended to reduce confusion with 25¢ coins. These dollars came with new designs with Sacagawea and a series of US presidents starting with George Washington.

Dodge DeBoulet

The problem with the above is that it doesn't reflect the true "value of the dollar." The dollar buys a lot more in the US than its relative counterparts in foreign currencies (i.e. while vacationing in England a few years ago, 1 GBP coins disappeared at the same rate as dollars in the US, for similar items).

My feeling is that the "folding money" nature of the current US dollar has a significant positive effect in keeping consumer prices down . . . once we switch to coins, they'll become much more "disposable" (as in "disposable income").

IMOA

Can't agree with that, I'm from a dollar coin country and the first thing you notice is the amazing speed in which americans hand out dollar bills. In fact I'd say americans hand out dollar bills at a greater rate than any other country in the world. For a nation that claims to value your dollar bills so highly you certainly give them away for the flimsiest of reasons.

cepheid

Yeah, I don't buy that (pun intended) one bit. The problem here isn't whether a dollar is a coin or a bill, it's that people don't know how to spend wisely. Most "disposable" spending occurs with credit cards, anyway, so the bill/coin debate is moot there. I still contend that switching to coins will have zero effect on how people treat money.

tfar

Well, given the stupid external tax prices, having dollar coins would lead to even more chump change and heavier pockets. Not a good idea. Come up with a decent tax and pricing system like other developed countries (change the measurements to metric while you're at it), then we can talk.

Till

neuron

I can live with dollar/euro/pound coins if it saves money and reduces the incidence of fake bills. I am surprised at the resistance in the US to dollar coins. For a nation that likes to give on how the government can save money, here is one, but by and large people are against it.

tfar

So bills are more expensive to produce than coins, even with the increased metal prices we have now?

And wouldn't coins be much easier to fake?

Till

cepheid

In the long-run, yes, because they must be replaced much more often. The lifespan of a dollar bill is something like 1-3 years. The lifespan of a coin is decades or more.

Sure, but nobody really cares about fake dollar coins. The big problem with bills is that dollar bills are used to make counterfeit $100 bills... the ink is washed off and the fake $100s are printed on the old $1 paper. Even if someone cared to fake a few millions dollar coins, it wouldn't do nearly as much economic damage as faking a few million $100 bills... not to mention that the cost of making fake coins would eat into much of their "value."

tjl

A security thread was added in 1990 to US notes of $5 and higher denominations to try to combat this method of counterfeiting large notes on paper from washed small notes. Apparently, there is less concern about counterfeit $1 notes, since the $1 note did not get this security thread, nor did it get the 1996 and 2004 redesigns that the larger notes did.

http://www.secretservice.gov/money_d...ures1990.shtml

Regarding counterfeiting coins, oddly enough, someone in 1954 went to the trouble of counterfeiting US 5¢ coins. 5¢ in 1954 is equivalent to 40¢ today using the Consumer Price Index. The counterfeits were detected because some dated 1944 were missing the large mint mark found above the Monticello building on the reverse of genuine 1944 5¢ coins.

http://www.numismaticenquirer.com/TN...it Nickel.html

tfar

Thanks cepheid and tjl for your informative and educational replies. Highly appreciated! ^

Till

jpatokal

Which is one more reason why the rest of the world has different-sized and different-colored bills.

cepheid

The U.S. will need to go in that direction, too... at least size-wise. The current format is not accessible for the visually-impaired, and I believe the BoP&E has been charged with coming up with an accessible format within the next few years... though I could be wrong. I suppose they could do something like emboss braille into the paper somehow, but I suspect they'll just go with size changes.