Small Change: Let's Put Pennies And Nickels To Rest - An Op-Ed

Stop printing the dollar and they will flood out from the vaults.

Do people give you a strange look and ask, "What the heck is this?" Especially if it's a young 'un. They don't use cash, let alone coins, so they've probably never seen one.

The Mint does not serve the States. Congress can pass the law, the Mint would have to oblige, and the States would have to suck it up. That is how a federal government works.

It is Congress, not the Mint that would be making this choice for the people. The Mint could try to get away with nixing the cent, but Congress would probably intervene. If we want to get rid of the cent, it is Congress that needs to take action.

Keep in mind, the Mint does not do anything directly to satisfy the demand for circulating coins (unless someone is foolish enough to buy them direct from the Mint at a premium). It is the Federal Reserve, which tries to satisfy demand from the banks, which tries to satisfy demand from their customers. The Mint is just the mint and they have to provide what the FR wants so long as the law allows it.

In the past I have joked that the Mint would just "lose the order" for cents from the Fed, or the Fed could tell the banks to beat it, but neither has the courage (or reason) to do so.

I am sorry, but that is not how it works. We have a federal system with a representative government. There is no direct democracy. The "American People" served by the Mint are the representatives of the people, not the people directly. And it is only the federal representatives in Congress, not those state legislatures or other local governments.

In European countries where the smaller denominations have been abolished, rounding rules have been published such that it comes out to a wash at the end of the day. But in my opinion, simply eliminating the 1¢ (and perhaps 5¢) coins is not a solution. We should have a complete reform of the coinage.

Acknowledging that the purchasing power of the money has declined drastically from the days of the 1792 Mint Act, and that the old Spanish Colonial "piece of 8" no longer means anything to anyone in economic terms, I propose to eliminate the "cent" denomination from circulation, leaving the "dime" or tenth of a dollar as the smallest denomination, and that the coins should be the following :

• Half dime


• One dime


• Two dimes


• Half dollar


• One dollar


• Two dollars


• Half eagle


• Eagle


• Two eagles

The denominations in italics, I think, and certainly the double-eagle, would for the time being be minted primarily as commemoratives, with only limited circulation, as the current half dollar. The $5, $10, and $20 paper would thus not immediately be withdrawn. The example of the ¥500 coin in Japan, however, says that we shouldn't count out at least the half-eagle. The $1 and $2 paper, however, would be withdrawn.

For the six general-circulation denominations, I would take them in pairs, half-dime/dime, double-dime/half-dollar, dollar/double-dollar, with each pair having the same metallic composition, design, and edge treatment, differentiated only by size and denomination inscription. For the designs I would select especially beautiful ones from past US coinage.

For the dollar and double-dollar, Gasparro's Young Liberty, paired with the Apollo 11 "Moon eagle", as originally proposed for what became the SBA dollar, is the obvious choice — but make it actually polygonal this time! 13 sides on the dollar for the 13 original states is a good choice, and the (larger, let's not do like Australia) double-dollar presumably 15 or 17 with no particular significance.

For the double-dime and half-dollar, probably the Standing Liberty (from the circulation quarter, although the one from the sesquicentennial quarter-eagle is also a good choice) for the obverse. I would give them a lettered edge, a proper one with sharp rims. How the US Mint has managed to make such a mess of the lettered edge on the yellow-clad dollar coins escapes me. That leaves a reeded edge for the half-dime and dime.

The dollar and double-dollar would be roll-clad, and the smaller denominations probably just solid metal. No ring-and-plug bimetallics! And I wouldn't go with plated steel either. Ideally copper-nickel and copper-nickel-zinc alloys with compositions such that the existing coins could be melted together in simple weight ratios to provide the necessary metal.

Doubtful. Electronic sales, which are well north of 50%, probably closer to 80% of all sales will still be to the cent. The cent will still exist electronically.

A half-dime would be cheaper to make than the current nickel and likely generate seigniorage.

It is a shame. We managed to get rid of the Half Cent without much trouble, but I suppose the information age makes it more difficult to slip those thing past us now.