The below article is an opinion piece and does not neccesarily represent the the views of the American Numismatic Association or the editorial staff.
As a coin designer, you might assume I have some sentimental attachment to our lovely Lincoln Head cent…but you would be wrong. I love coins and have been making them for over 35 years. However, even I recognize it is way past time America stops hemorrhaging money to pay for coins no one uses. In fact, the U.S. Mint has been loudly advocating on deaf ears to stop the production of the cent (sometimes informally called a “penny”) since before I was appointed to an advisory board there in 2010. Pennies are literally tossed onto the street as a pocket nuisance. You can’t buy more than a wish in a wishing well (and not even a cheap gumball) with a penny.
The Coinage Act of 1857 is when the United States, with the stroke of a pen, decided to drop half cents. Surprisingly, after 168 years of inflation, we stubbornly refuse to let go of the penny. According to an online inflation calculator, a single penny in 1857 is equivalent to 36 cents today. By that logic, we could stop producing all coins smaller than a quarter.
As you may know, it costs 3.7 cents to manufacture one cent now. This loss is known as negative seigniorage. For all other circulating coins, the manufacturing cost is less than the face value. When the federal bank orders coins, the mint receives positive seigniorage, which goes directly into the national treasury.
Obvious Savings
President Donald Trump’s recent executive order to stop cent production is just one in a flurry of political moves this month. The savings to taxpayers, measured in mere hundreds of millions of dollars instead of billions, are still worthy of our support. With so few things bipartisan these days, this should appeal to both sides.
So, why has it not been done sooner? It is mostly due to well-paid lobbyists for metal suppliers and a lack of will among our leaders to make a firm decision. Canada stopped producing its penny over a decade ago, in 2012. It was not necessarily popular with the public at the time, but I would be willing to bet that they would not vote to bring it back now.
Dropping the penny is a good start—but still the bare minimum—to cut wasteful spending on circulating cash. We should not stop there. I suggest we push to drop the paper dollar in favor of dollar coins. They are already manufactured and are sitting in massive warehouses. However, they aren’t circulating because our congress has not let go of the less cost-efficient paper dollar. Canada, again as an example, swapped out their paper dollar for the beloved “Loonies” in 1987 and has been enjoying the collective economic benefits all these years. The UK introduced the 1-pound coin to replace their bank note in 1983, while Australia did the same just one year later.
We Americans like to think of ourselves as a world leader. So, let’s act like it and make the change.
Heidi Wastweet is an American medalist and coin designer. You can learn more about her by visiting her Reading Room profile here.