An age-old question that has found its way onto a number of threads on a number of message boards, but this version has a little twist on the usual 'coin collector' response of a hands-down opinion to immediately cease production of the dollar note.
Dave Harper of
Numismatic News asked for input on this subject, to which I wrote:
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It only makes logical sense to replace the dollar note with the dollar coin - or does it?
At a cost of over 75c per note with an approximate six-month life span, the United States Treasury spends about $1.50 per annum for each linen dollar in circulation. Conversely, at a cost of about 5 cents per coin with a life span of nearly two decades (even if they were in circulation), the Treasury would spend about 1/4 of a cent per annum for each dollar coin in circulation. You do the math - it's pretty simple. We should switch to using $1 coins in a housekeeping effort to save us all a lot of taxpayer money - right?
As my favorite radio voice, Paul Harvey, would have said, "...and now, the rest of the story." The Bureau of Engraving and Printing (BEP) creates all of our "paper" money. Well, it is not really paper - our notes are made of rag linen, which is essentially cotton. Production of the $1 note comprises of about 40% of all notes produced by the BEP. In FY 2009, they produced 178 billion notes (yes, that was billion, with a 'b'). In 2008, the United States Mint produced fewer than 500 million dollar coins. The coin that comprises the majority of our circulating coins - the
Lincoln Cent - saw a mintage of only 5.4 billion pieces. As the most minted coin in the world, the highest annual mintage of the
Lincoln Cent in history was 1982 where over 16.7 billion pieces were minted. A little review - that number is less than one-tenth the number of dollar notes printed annually.
These facts lend to some questions that must be considered before a change-over takes place:
1. How many coins would be needed to replace the 150+ billion notes produced annually? Probably not as many as bills produced today, but the number would have to be substantial enough to warrant some deep thought before just 'changing over.'
2. Is the Mint capable of handling the new requirement - planchets, machinery, staff, metal supply? If you replace every dollar bill produced with a new coin, the Mint would have to make more than ten times the coins they currently produce - even temporarily, this is probably unrealistic.
3. Would the sudden reduction in the amount of rag linen required (without dollar notes) severely affect the cotton market and the company that produces the linen? How would it affect the cotton farmers? How would it affect the commodities market? How would it affect the BEP and jobs there?
4. Would the change-over end up costing the taxpayer even more money due to a possible restructuring of the departments (BEP and Mint) to handle such a large paradigm shift? Closing facilities, offices, and relocating them elsewhere...new equipment, new contracts, jobs lost, jobs gained.
I think a switch to dollar coins bears consideration, but it would be unwise to look at just the production numbers and cost per piece as our only source for a reason. There are a lot of facts to consider and requirements to ponder before just pulling the plug on our good old dollar note. Perhaps a look into some of the other countries who have made similar changes would be wise - Canada, Australia, Great Britain.
The one thing I do definitely support is that the Mint quit wasting their money making dollar coins while the dollar note is still in circulation. They have wasted a lot of taxpayer money on their 'programs' to get dollar coins circulating, and all have simply failed. Throw the switch one way or the other - either get rid of the note or get rid of the coin. Both cannot harmoniously exist in our pockets. I think the American public has voiced that opinion loud and clear.
Sources used in this report:
http://www.bestcoin.com/lincoln-cen...tage-two.htmhttp://www.moneyfactory.gov/uscurre...figures.htmlhttp://coins.coinupdate.com/preside...ar-mintages/
Posted 03/18/2011 1:14 pm
...(No offense meant JB ! ....
)
