In the ongoing debate between keeping the cent and killing it off, I am surprised that the suggestion of shrinking it has so little traction.
We have done it before as a nation. When the small cent arrived in 1857 with a Flying Eagle on it, it proved to be wildly popular.
Large cents, with 64 years of history behind them, were willingly given up even though sound money advocates could have pointed out that their face value and metallic value were nearly identical, unlike the new smaller cents.
Convenience of being able to carry more cents comfortably won. Intrinsic value lost.
The cent shrank again in 1864. This time, the diameter remained the same, but the alloy, which had included 12 percent nickel, was changed to bronze, and the weight was cut by a third. The coin became thinner.
Again, convenience won. Intrinsic value lost. This second time, it was private industry that had led the way. Before the change, cents were being hoarded because of the Civil War. Privately produced bronze tokens were made and used as change. The government saw how willingly people accepted these tokens and decided to copy them for the coin.
In the debate about current coinage, private industry is the foot-dragging party. They want to be consulted, but they don’t really want change. They just want taxpayers to continue subsidizing cent production.
If you shrink the cent but keep it, the major argument used to counter total abolition fails. That is the need for rounding and the potential for higher prices. There would be no rounding with a smaller cent.
Of course, a smaller cent could be the foot in the door to total abolition down the road. But then total abolition will happen at some point in the 21st century. Why not have a new collectible coin with a brand new design on it as a stopping point along that path?
Make the cent smaller than a dime. We had a silver three-cent piece in the 19th century. It had a diameter of 14mm. The current cent is 19mm. The dime is 18.9mm. Make the cent 14mm.
A smaller coin would keep the possibility of rounding at bay for another generation, or for at least as long as all coins survive in regular use.
This week’s poll question shows 100 percent of respondents think coins will still be used 10 years from now. I used to think that, too, but the rapid growth of electronic payments and seeing how it is done with cellphones in China raises doubts.
This article was originally printed in Numismatic News Express. >> Subscribe today
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