This article was originally printed in Numismatic News.
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If Acting Mint Director Richard Peterson can keep his timetable to report to Congress on possible new coin alloys in 12 or 13 months, what is this report likely to contain? More importantly, will it inspire Congress at act quickly?
The dilemma of having a nickel’s metallic value costing more than face value has been staring the Treasury in the face since 2006, when at the end of the year, the Treasury secretary made it illegal to melt or export both nickels and cents.
Even under the best of circumstances and Congress acts next year before its members go home to run for re-election, there will have been a period of six years where profits from other operations have had to subsidize the coinage of the nickel.
Add the cent to that mix and the fact that the public does not use the half dollar or the dollar coins, and you can see that the present American coinage system is pretty dysfunctional.
The fate of the half dollar and the dollar can be dealt with at another time with another column. The composition of the cent and the nickel is the issue at hand.
Are they worth saving?
The purchasing power of both the cent and the nickel is very low. Other countries have opted to use a steel core for their lowest denominations with surface coloration given by other metals that are coated or bonded to it. This preserves at least the appearance of continuity.
Canada is a believer in steel-based compositions, but even with this expedient its Parliament is moving in the direction of abolishing the cent completely. When the Canadian dollar was worth 70 cents, it would have been easy to dismiss Canada’s deliberations as not applicable to the United States. But with the Canadian dollar now virtually identical in value, if not worth a bit more than the U.S. dollar, any action Canada takes must be considered relevant to our own circumstances.
Protecting the present cent is the mining lobby. Whether their interest in it will wither should steel become the dominant metal in it remains to be seen.
I happen to like the idea of stainless steel. My personal acquaintance with the use of such coins occurred in Costa Rica, which used stainless steel 5, 10 and 20 colones. They stand up to wear well and don’t get dirty looking like the present cents and dollar coins. Costa Rica replaced the stainless steel alloy with a brass alloy in 1995 that gets dark and dirty.
The country also experimented with aluminum 5 and 10 colones. Nobody liked them. I agree. Getting them in change just doesn’t feel right.
My favorable opinion of stainless steel is probably the kiss of death for this option, but few people would notice the change between the present nickel and stainless steel and the fact that the cent wouldn’t be copper colored any longer strikes me as more and more of a nonissue. “Red cent” is a figure of speech. Is it a statement of national policy, too, that such a coin will always have to be copper colored? My preference is I hope not. What your preference?