Is the Mint lucky or are collectors? That might seem to be an odd question to ask at a time when it costs the Mint more than a cent to strike a cent and send it to the banking system and more than a nickel to get the five-cent coin similarly on its way to a useful life.
Why would the occurrence of a problem with circulating coins that could potentially be major in scope be considered a stroke of luck?
Well, perhaps it is my quirky outlook on things, but like a dog that doesn?t bark when you are trying to pass unnoticed, the Mint has encountered a problem and few seem to care. That is solid gold. Without the hounds of hobby and punditry baying at their heels, Mint officials seem to have latitude to do what is right for the country in the long run in addressing the current problems with the cent and the nickel.
The Mint was not so lucky in 1974. A national cent shortage nearly gave the country an aluminum cent. The hobby was wound up. Only the advent of a recession caused the price of copper to recede enough to end the shortage and postpone a composition change.
It was 1982 before that change occurred, but occur it did. The 95 percent copper alloy was changed to a composition that is over 97.5 percent zinc. By then, there were some spot shortages of cents around the country, but nothing like what had occurred in the 1970s. The composition was changed and life went on for a generation.
We have a new problem with the cent?s composition, but there are no shortages in circulation reported thus far. This gives the Mint the breathing room to undertake any potential changes to the denomination in an unhurried way, weighing alternatives and recommending something in a useful but boring way that will continue to keep the issue under the radar.
A new composition is probably in the cards. Perhaps the diameter will be reduced. What will happen, I don?t know, but unless we get a serious decline in metallic inputs, sooner or later, a change will have to be made.
The same situation is true with the nickel. It now contains roughly six cents of metal in a five-cent coin. When that happened to the Canadian five-cent piece in the early 1970s due to strikes at nickel mines, the hobby freaked out. Huge numbers of bags of the coins were sold to speculators. Hoarding was rampant.
What is happening in the United States today? Little that I can see. That doesn?t mean something won?t develop to arouse public opinion, but it does mean a useful quiet period for the Mint.
There is an historical point of interest in having to change the composition of the nickel. It is a coin that itself was the product of the financial emergency of the Civil War. High inflation and coin hoarding pushed all coins out of circulation. The substitutes were notes called Fractional Currency. Nobody really liked the notes. Everybody wanted to see their production ended. But it took time. The government worked from the bottom up. The Indian cent composition was changed in 1864 by removing all nickel and making the coin similar to the Civil War tokens of the time. Two years later, the nickel was introduced as an emergency replacement of the hoarded five-cent silver coin, the half dime.
The new coin turned out of be wildly successful. The look of the 75-percent copper and 25 percent nickel alloy gave the coin its name. In the American mind, nickel means five cents. The half dime was abolished in 1873 when it was realized nobody wanted the tiny coin back ? even if it was made of precious metal.
So that is why the Mint is lucky. Why are collectors lucky? Well, I remember the great coin shortages of the 1960s that prompted the Coinage Act of 1965. Collectors were blamed for it. Legislation by Sen. Alan Bible would have outlawed collecting coins. We dodged that bullet, but relations between government and hobby were strained.
Now there are no shortages. There is no finger pointing. Hobbyists are considered to be valued clients. So, is the Mint lucky, or are collectors? I think we all are.