By Harvey Stack – Founder, Stack’s Bowers ……
The United States Mint has announced that they are considering stopping the issuance of cents, often called pennies, because of the cost to make them. Since that announcement, the cost of copper has dropped on the world metal markets and it led me to think that the one-cent piece will continue its long career and people will go on getting the correct change when they purchase goods and services.
If you write a check, or use a credit card, you can be sure that the exact amount of your purchase will be charged. Yet, should you be like many who pay for small purchases in cash, you will be either short changed or overcharged if no cents are available or to be found in daily commerce.
This came to my attention this week, when I visited my local post office, and was behind two ladies, each with a different need for postage.
The first lady wanted to buy a stamp for a letter at a cost of 49 cents. She gave the postal clerk two 25-cent coins, and received a stamp and one cent in change. If the post office did not have a single cent she would have had to pay one cent more than the stamp cost. The other lady was sending a weighty package to Canada, and the cost was $41.23. She gave the clerk $45 and got back three $1 bills, three 25-cent pieces, and two one-cent pieces. She remarked to the clerk that this was quite expensive, and the post office had not been able to give her the total $3.77 in change, I am sure she would have complained as well.
The one-cent piece was among the first coins struck by the U.S. Mint in 1793. Because of the need for small change in commerce, it has continued to be struck in virtually every year since and has been an essential part of circulation in our daily change.
The critical nature of small change was obvious by mid-1793. Because some things like bread sold at the rate of two loaves for one cent, if someone wanted to buy just one loaf he needed a way to pay an amount that was less than one cent. So the Mint struck half-cent pieces to expedite daily commerce. While the half cent was discontinued, the one-cent piece still plays a major role in our commerce as it has for over two centuries. I believe it would be very confusing if we did not have cents in circulation to satisfy the daily needs of commerce.
Most states, cities, and towns have sales taxes. Nobody likes to pay sales tax, but it is one way that various governments fund the goods and services we receive. Now consider, if you buy something, and with the tax the price is $18.72 and there are no one-cent pieces to use to pay or make change, you will have to pay $18.75 or get the merchant to accept $18.70. In the latter case, the merchant will have to pay the extra two cents from his or her profit, for he or she will still be responsible to pay the correct amount the government agency that requires the sales tax.
Either way, the result will be unacceptable to one of the parties involved.
In addition, some vending machines still use cents for products such as gum and candy. So if the smallest coin you could use were a five-cent “nickel”, these products would have to cost more.
These are two, perhaps somewhat silly, results if all cents leave circulation. Of course that will take many years to happen, for their are billions upon billions of one-cent pieces presently in circulation, plus all that are sitting in piggy banks or cookie jars. These will have to be placed into circulation before the Treasury would be able to remove them.
I feel virtually every American has an unfavorable opinion of the idea of having no more one-cent pieces in circulation. For some the idea causes vast dismay and will result in great outcries against it. I believe that the public will reject the idea. For nearly 225 years people have grown up with the cent or “penny” in daily commerce and this long-term relationship will not easily be given up.
Students of numismatic history can look back at times when the cost of producing one-cent pieces ran high. We can also recall when the need for metal for arms and armament during World War II caused cents to be struck in a different composition in order to aid in the war effort. I think that the current situation calls for a fresh look at how the cent can be preserved in daily commerce, instead of being removed from circulation.
I am certain that some other solution will be offered to counter this unnecessary idea.
While the Mint has stated that they lose money with the production of one-cent pieces, it has also been revealed how much profit is made on other coins. For example, each 25-cent piece (quarter) made in the current clad composition (the coinage of silver quarters for circulation having ended in 1964) has had an unofficial production cost published of 17-1/2 cents. If you consider all the dimes, quarters and half dollars that the Mint produces and take into account the profit returned by the clad coinage, it would seem that there would be some extra money to continue making one-cent pieces.
In this way we could continue a tradition that has been in place since the beginning of American coinage.
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