I was all fired up yesterday for a scheduled hearing before the House Financial Services Committee at which Mint Director Ed Moy presumably was going to reveal Mint thinking on the future of the cent and the nickel. It was canceled.
Virtually every collector knows that it costs more to strike a cent and a nickel than face value. For the nickel, the metallic value is greater than face value, though for the copper-coated zinc cent the metallic value is still less than face value.
Sooner or later, the alloy needs to change if the Mint hopes to stanch the losses on each coin struck.
What the alloy will change to is the question. Canada has a wonderful process to coat steel that could keep the cent looking like the cent and still cost much less to produce.
The nickel could simply switch to stainless steel. It will feel lighter and cheesier than the current nickel, whose alloy is the same as it was when it was introduced in 1866. However, the cost of production will be less than face value.
I know there will be pushback on an alloy change. If the Mint is accused of using lighter and cheesier alloys it can merely point out the obvious that when compared to the euro and other major world currencies, the dollar is 35 percent lighter in value than six years ago and at the rate it is presently falling the world’s savers and investors think it is looking pretty cheesy.
This cost problem has been staring the Mint in the face for several years now, but apparently it takes a special favor by a member of Congress to a small firm in his Ohio home district to get officials to talk about it in public. Or maybe not. The hearing, after all, was canceled.
The congressman, Rep. Zack Space, wants to exempt a firm in his district from a ban on melting U.S. cents and nickels, though this exemption would apply only to pre-1982 copper cents. His proposed bill to do this is suddenly the center of much wrangling.
As special favors go, this doesn’t rank up there with Alaska’s bridge to nowhere, but it is indicative that rules are made to be broken by those with friends in high places.