America Online, the ubiquitous computerized mail and Internet service provider, took on the cent topic July 2 with an online poll that more than 107,000 people had participated in within hours of posting. The results show AOL participants who responded evenly split on whether or not the Mint should eliminate the one-cent coin.
Posited as part of a story predicated on the cost to produce a cent as exceeding face value, about half of the 107,000 respondents thought the cent should remain, the remaining half thought it should be eliminated. The cent now costs about 1.2 cents to produce, AOL’s news story, written by Associated Press reporter Jeff Donn, said.
Datelined Plymouth, Mass., Donn’s story begins with the premise that, “In this village settled by thrifty Pilgrims, you can still buy penny candy for a penny, but tourist Alan Ferguson doubts he’ll be able to dig any one-cent pieces out of his pockets.”
It at once defines the problem: Ferguson dumps his cents in a bucket at his Sarasota, Fla., home, and so do millions of other Americans. The cost of zinc and copper, labor and production for the cent now make the cent a modest money-loser under the Mint’s accounting system, though face value still exceeds metal value.
Elimination of the cent would only raise the cost to produce a nickel and other higher denominations because the fixed assets of the Mint and the cost of die production remain fixed ? but would be amortized over only five instead of six circulating denominations if the cent were eliminated.
Numismatic News editor David Harper is quoted by Donn as to why many Americans want to keep the denomination. “It’s part of their past, so they want to keep it in their future,” says Harper. AOL then quotes a decade-old Gallup poll showing overwhelming approval of retaining the cent.
Back on May 23, U.S. Rep. Jim Kolbe, R-Ariz., weighed in with a proposal to end the cent. “With the recent increase in production costs of the penny and the nickel, I have decided to revisit legislation I introduced in 2001 to reform our legal-tender system. This new legislation will look at our currency system as a whole and how it can be modernized.”
Demise of the cent was just one of five components in legislation introduced July 17, 2001, by Kolbe.
Now completing his 11th and final term, the sixth-ranking member of the entire House Appropriations Committee has moved back on track to eliminate the cent.
Elimination of the cent from circulating coinage in the 213th year after it was first created is a real possibility based on facts alone, but issues such as this are not judged solely by the facts.
The actual return for producing the lowly one-cent piece is now negative because of the price of metal (though the truth of this statement fluctuates daily with metal prices). The effect on the bottom line of the Mint is probably a deficit of less than $1 million (or a minuscule negative return on investment).
Kolbe in 2001 proposed a rounding system to accommodate the lack of a cent.
“I am proposing to reduce the use of the penny,” he said. “The penny would continue to be legal tender, but would not be necessary in cash transactions.”
So in a way, the AOL-AP story is old news, but also new news. In the time it took to write this story, more people responded; it?s now over 113,600 and still evenly divided. Wait for the update.