This article was originally printed in the latest issue of Numismatic News.
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Congress passed the Coin Modernization, Oversight and Continuity Act of 2010, now awaiting signature by President Barack Obama, setting the stage for a major overhaul of the way coins are used, the metals that they are composed of, and how the Mint is going to manufacture them.
It’s an important a development as the Coinage Act of 1873 was to bring the Mint from 18th century notions of money into the 19th century and as the Coinage Act of 1965 was to move the nation’s coinage from precious-metals based to fiat money of the 20th century – the clad coinage for dimes, quarters and half dollars, and the copper-plated zinc cents.
It also will be the third in a series of extensive surveys of coin and currency that was last done when Research Triangle Institute did its 1975-1976 massive review of coinage requirements, following hard on the heels of the 1963 Arthur D. Little & Co. examination that led to the Coinage Act of 1965.
The legislation authorizes the secretary of the Treasury (read: the Mint) to conduct any appropriate testing of appropriate coinage metallic materials within or outside of the Department of the Treasury and specifically allows independent research facilities as well as current or potential suppliers of the metallic material to develop, evaluate or begin the use of new metallic materials for coin production.
That means that a new batch of pattern coinage is likely to emerge. Whether it becomes collectible, or merely achieves status of a historical footnote, remains to be seen.
Congress wants to stay in the loop on all this, and the law requires that consideration be given to the ease of use and ability of new coinage materials to co-circulate, that is, be produced simultaneously with current coinage.
They’ve asked for reports, including the effect on vending machines and commercial coin processing equipment and want to be certain that “any new coins work without interruption in existing coin acceptance equipment without modification.”
Every two years, the secretary of the Treasury is required to submit a report to the Committee on Financial Services of the House of Representatives and the Committee on Banking, Housing and Urban Affairs of the Senate analyzing production costs for each circulating coin, cost trends for such production, and possible new metallic materials or technologies for the production of circulating coins.
The aim here is to avoid what has happened to the cent and nickel, where the metal content of the coin exceeds its face value. (No mention is made of the problem in the way that the Mint counts production cost – simply dividing total dollars out and measuring it against coins produced).
The Mint is also supposed to include recommendations for changes in the methods of producing coins that would further reduce the costs to produce circulating coins, and include notes on the legislative changes that are necessary to achieve such goals. The trick to this: do it without making “significant change to coin-accepting and coin-handling equipment to accommodate changes to all circulating coins simultaneously.”
They have also articulated the need to not have new American coins conflict with the monies of other nations and allow “the use of a coin with a lesser value produced, minted, or issued by another country, or the use of any token or other easily or regularly produced metal device of minimal value, in the place of a circulating coin produced.”
There are other technical amendments to existing law in the modernization legislation, but for now, look forward to a major reexamination of the minting and coinage laws.