After spending 30 years in the U.S. military, I resumed my teenage years’ hobby of coin collecting soon upon retiring.
My subscription to Numismatic News (NN) over the past few years has provided me some very enlightening and entertaining topics to consider. With great interest, I enjoyed NN readers’ ideas to get people to use dollar coins. To most of them and to me, the solution has always been simple – do what most countries do and phase out paper money. I think there is a deep reluctance, though, to force too much on the skeptical American public, be it the metric system, universal health care, or dollar coins. We don’t want to get people too upset now, do we?
When I was a junior staff officer in Europe in 1978 to when I was a mid-level officer there in 1988, all military branches used a system that worked extremely well for our on-base large military department stores (base exchanges), our small businesses (barber shops, florists, restaurants, etc.), and our supermarkets (commissaries). The European-wide policy for on-base, U.S. transactions was this: If your transaction at any of these facilities ended in anything from zero cents to 2 cents, you paid zero cents. For transactions ending in 3 to 5 cents you paid the 5 cents.
Over the course of a three-year tour for most people, it averaged out. The biggest savings, however, was to the government, the American banks on base, and the government-run stores and supermarkets. No one had to deal with pennies and they dreaded the thought of having to deal with them when they had to return to the U.S. Like here, for cash transactions paper dollars are still the norm at our overseas bases, though off base in Europe, no country issues low denomination paper money since it is not cost effective. (Canada is even smarter by issuing $1 and $2 coins).
Of course, this penny solution only applied to on-base transactions – U.S. money was generally difficult to spend off base – but that simple policy was, and is, a simple solution to a really not-so-difficult-to-deal-with problem. Though credit/debit cards were used less then, there wasn’t a problem there as you would simply pay the full amount of your transaction.
The solution we use there works well because everyone understands the policy, it’s simple, and it’s much easier to deal with coins, especially for the still many transactions people use cash for. Here in the U.S., the policy might be difficult to enforce, people would complain a lot, and some people would never quite understand the logic, but in a tight-knit, mobile, smaller-scale community like an overseas military base, it works extremely well.
Stores at military bases in the U.S. contend with the pennies because they are part of the off-base financial structure and are, of course, legal tender. Additionally, most places have sales taxes, which usually adds odd amounts to purchases. I suspect we would see the phase-out of the dollar bill before we see the phase-out of the near-worthless penny, regardless of its inefficiency.
From a collector’s point of view, though, we most likely would not want the penny phased out; however, I fear that someday that will happen as we will follow the lead of other countries that have done it for sound economic reasons.
Until then, let’s enjoy them, but remember how easy this proven solution is if the government ever decides it wants to save a lot of taxpayers’ money.
Bob Foessett, a U.S. Air Force retired lieutenant colonol, resides in North Las Vegas, Nev.
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