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New coins or no coins?

I had a handwritten letter from a collector yesterday asking whether the country could use new $3 and $10 coins.

My initial reaction is that collectors still can dream, can’t they?

However, if coins are to survive as useful items in commerce, denominations will indeed have to increase.

I expect higher denominations, if they are ever made at all, would be an easier $5 denomination and a $10 rather than a $3.

Collectors, of course, are aware of the old $3 gold pieces and so for them to make a suggestion of a return to the denomination is not as odd as it might seem to noncollectors.

However, the paradox of modern life is that as attached as so many people are to retaining low value coins that inflation has basically rendered worthless, they are equally as opposed to using coins of higher denominations than the quarter.

The battle has long been joined over the fate of the $1 bill and the $1 coin.

This impasse became evident to current collectors when the Eisenhower dollar was introduced in 1971. The purchasing power of that coin was about $5.78 in today’s money. Put another way, the dollar coin of today is worth 17.3 cents in 1971 money.

Obviously, a $5 coin today would not even have the purchasing power of the Ike during its first year of issue.

But it doesn’t really matter what the purchasing power is of a real coin or of a proposed coin if we have no intention of using coins at all.

Other than prompting idle speculation among hobbyists, the idea of new coin denominations might simply disappear as Americans abandon even paper money for credit and debit cards and cell phone wallets.

Buzz blogger Dave Harper is winner of the 2013 Numismatic Literary Guild Award for Best Blog and is editor of the weekly newspaper “Numismatic News.”

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One Response to New coins or no coins?

  1. Vachon says:

    This problem could be solved another way if politicians could commit to shrinking the money supply and allowing existing money to appreciate over time rather than depreciate. It could also be sold as good for the environment…all those unused coins finally making the circulation rounds rather than being melted and recoined into higher denominations putting more CO2 into the air.

    Otherwise, the reality on the ground via gumball machines and ATMs is that the $20 bill is our $1 bill and that the 25¢ is the “penny” of our time. Perhaps dropping the cent, nickel, and dime would be appropriate as would dropping the $1, $2, $5, and $10 bills in favor of coins bearing those denominations.

    Based on what I’ve read in NN, the half-cent had a purchasing power of around 10¢ when eliminated suggesting that our money supply works acceptably using coins with a minimum value of 20¢ (the full cent of 1857). So what are the cent, nickel, and dime still doing around?

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