Why are there coins? What purpose do they serve?
I ask these existential questions because of an inquiry that arrived in my e-mail.
The inquiry was a perfectly legitimate question from a collector point of view. What was asked was why people could not get current Sacagawea dollar coins from banks instead of paying premium prices to order them from the Mint?
Good question. In recent years it seems that the only reason coins are produced is to sell them to collectors. That, however, is not their fundamental purpose. Their purpose is do be used in commerce on a daily basis for the millions upon millions of cash transactions that occur.
Coins are supplied to merchants through the banks. At the top of the heap is the Federal Reserve, which places orders for coins as they are needed by its member banks. This is the mechanism through which coins are sent to do their duty in commerce.
Any bank that needs dollar coins since 2000 have been supplied Sacagawea coins. They struck so many in 2000 and 2001 that supplies are still plentiful. In the old days, which are not all that long ago, when supply backed up, coinage would cease. This happened with the Anthony dollar after 1981. It wasn’t until 1999 when the surplus supply was finally used up, that more were struck.
Well, if a bank orders coins today, it will either get the 2000 or 2001 Sacs or the new Presidential dollars, so average collectors cannot acquire recent Sac dates from their familiar and friendly teller.
With the Sac dollar surplus, the Mint didn’t simply shut down production. It decided to make dollar coins a profit center and continue to produce a few. It knew collectors would buy them for more than face value. This helps pay for a piece of the Mint’s overhead and perhaps justifies increasing marketing budgets to collectors. As long as there is a supply of older coins available to be used in commerce, the Mint won’t ship out coins with the new dates. It doesn’t have to by the way the banking system works and it doesn’t want to in order to protect its collector profits.