GAO leaves coin questions to Mint
If you are like me, you often find yourself listening to an oldies radio station that replays the hits of half a century ago. In its own way, the U.S….
If you are like me, you often find yourself listening to an oldies radio station that replays the hits of half a century ago.
In its own way, the U.S. Mint is replaying its hit of 1965 when it found the copper-nickel clad alloy that allowed vending machines to accept both clad coinage and their silver predecessors.
Is it possible to do it again?
Is it possible to create a new set of coins that can be used interchangeably with the old coins?
That’s what the vending machine industry would like to see.
The drama surrounding finding answers to that question has been playing out very slowly since it began to be asked around 2006 when the cost of producing cents and then nickels exceeded face value.
The latest chapter is a report from the Government Accountability Office dated December 2015. As a primer for someone who hasn’t thought about the issue of coin composition from all angles, it is a great piece of work. It summarizes the situation well.
However, if you are looking for answers to the decade-old question, the upshot is still to wait for the next Mint report due at the end of 2016.
In the meantime, the GAO agrees with the Mint that it should not change the composition of the quarter to some form of steel because coins of lesser value from around the world would then be employed as slugs.
Also, the Mint has definitively answered the question that no better composition for the cent can be found. There just is not something cheaper to be substituted for copper-coated zinc. The GAO agrees.
Steel-based alloys still remain viable from a Mint perspective for nickels and dimes, but this will cause a general upset in the vending industry. GAO notes that the industry forecast that 7 million machines would need to be modified. GAO notes that there are only 4.5 million in the country and that some of these, for laundry, use only quarters and would not need to be modified since the quarter will not now be made of steel.
Where the GAO really gets going is analyzing and tearing apart Mint methodology for estimating cost savings. That’s what the GAO does. It is what it is for. The taxpayer benefits from its thoroughness, but it really is not enlightening from the point of view of a coin collector looking to see what the future might hold.
GAO noted that Canada and Great Britain have moved on to steel coins. It makes me wonder how they have managed to do so without being vetoed by the vending machine industry.
Canada, too, has ditched the cent in response to the rising cost question. This is something that United States is nowhere near doing.
However, as the lengthy coin evaluation process goes on, we might someday find ourselves simply skipping another coinage transition and going straight to credit cards. It isn’t 1965 anymore. What will the vending industry think of that?
This article was originally printed in Numismatic News.
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More Collecting Resources
• Come on down to the Chicago International Coin Fair in Rosemont, Ill. on April 14 to 17, 2016 to see impressive world coins, meet new collectors and participate in Heritage Auction’s fantastic coin auction.
• The Standard Catalog of United States Paper Money is the only annual guide that provides complete coverage of U.S. currency with today’s market prices.
