So even with the bad economy, there is one tradition that we’ve turned into a weekly affair that adds a bit of whimsy to our everyday lives, and to those we purchase everyday items from: Dollar coins.
A Little Bit of History
Lots of people remember the Susan B. Anthony dollar, a coin that everyone (apparently) disliked. It looked and felt like a quarter with its silver color and rolled edge, and as such was often confused for a quarter in circulation. Because of this, they only were minted for three years (1979-1981) but since they became so popular with vending machine manufacturers and train and light rail systems that the Treasury nearly ran out of them in the late 1990s, which is when Congress discussed minting the Sacagawea Dollar to replace Susans in 2000.
The fact of the matter is that a full implementation of the Dollar coin would save nearly $500 million a year by a simple matter of resources necessary for circulation. Each dollar bill costs about 9 cents to manufacture where each dollar coin takes about 20 cents. However, a dollar bill’s lifespan in circulation is about 18 months before it falls apart, where a dollar coin could last 30 years… or more.
This means that keeping a dollar bill in circulation for 30 years costs $2.70 vs the 20 cents of the dollar coin.
(That’s a savings of ~8.3 cents per year, per coin. Over millions of coins, that is significant.)
This however, scared paper manufactures that supplied the cotton/linnen components for the dollar bill enough to form a collation known as “Save the Greenback” which lobbied heavily to pass the “Save the Greenback Act” which would ensure that the dollar bill would not be eliminated. In the proposal by Rep. Thomas F. Davis (R):
- “[P]ockets will be weighted down with heavy change instead of having a few bills tucked into their billfolds . . . one might suspect a conspiracy by clothing manufacturers in drafting the dollar coin proposal, as everyone’s pockets begin to wear out.” (Really?)
- “[L]egislation designed to eliminate the dollar bill will an excuse by the special interests to raise prices on everyday items–a future sales tax, to be levied on all Americans but falling the hardest on those who can least afford it.” (Er… what?)
- “The costs of changing to a 1 dollar coin would be significant to many in the private sector including but not limited to the small town banks which would have to retool their coin counting, wrapping and sorting equipment–costs which would inevitably be passed on to their customers.” (Nowadays this is a non-issue.)
- No one like the Susan B. Anthony dollar. (Which was very true, and perhaps the only relevant and consistent point he made.)
No surprise that the the Act was never passed.
It almost seems that in spite of the proposed Act that the need for more coins in the Treasury caused Congress to order another strike of Susan B. Anthony Dollars in 1999.
Then in 2000 there came the Sacagawea Dollar which completely re-worked the look and feel of the dollar into a brilliant, thick golden coin, while keeping its metallic signature identical (so that vending machines that could accept Susan B. Anthony dollars could also accept them without any need for an upgrade).
Still feeling weird about the Susan B. Anthony dollar, the Sacagawea Dollar received mixed reviews. Some people loved it. Others hated it. Polls even to today are mixed (but I have some theories about that).
Giving the dollar coin its latest try, in 2005, Congress enacted Pub.L. 109-145 to give a new face… or rather new faces to the dollar coin: All of our (dead) Presidents.
In two years from the Act, the plan was to release 4 (dead) Presidents a year (similar to the State Quarters) until all eligible Presidents were honored. So in 2007 George Washington, John Adams, Thomas Jefferson and James Madison were engraved onto the obverse, where the Statue of Liberty is on the reverse. Also at this time, the minting mark and date were no longer struck into the face of the coin, but instead were engraved along the edge.
And this year (2011) we’re expecting to see Johnson, Grant, Hayes and Garfield.
So Why Do I Use $1 Coins?
First of all, I love how my kids react to them.
What child (or bit of child in all of us?) does not like a pile of golden treasure?
This past Christmas I gave little sacks of 10 shiny $1 coins to my daughters, nephews and daughters’ best friends that were mixed with glass “gemstone” blobs and tied with a little “guardian” dragon figurine at the top.
Not only that, but they’re a great tool to teach history. Every time we get a random pile of them from the bank, I sit down with my eldest daughter and we go over each of them, sorting the Presidents out. It’s gotten to the point that she’ll be able to identify the them on sight and when she put together one of her Presidential puzzles we got her from Barnes & Noble, she’ll exclaim, “Abba! It’s John Adams! Like on my coins! Sit down, John!” (that last bit she picked up from the musical 1776 🙂 ).
It literally gives weight to their purchases, and lets them understand the value of a dollar.
Second, it’s patriotic and saves our country money.
As I mentioned, each dollar coin that’s in circulation saves our country on average a little more than 5 cents a year. That kind of savings adds up quickly. If steps were taken for us to adopt the dollar coin as our base currency and do away with the dollar bill (as many other countries have done with their base currency), we could save a very significant sum of money.
Third, it saves *me* money.
This is a little known fact but the government currently has in place a direct shipping program to get dollar coins in circulation.
You can order them in bulk denominations of $250 and get free shipping.
Now, if you have a credit card that has “cash back” rewards…
My debit card gives me $1 back for every $100 I spend on anything when I use the card with a credit card transaction. This means that for every $1,000 of coins I order from the Mint, that I get back $10. To put this into perspective, my savings account (which is a lot more than $1,000) gives me a measly couple bucks of interest every year, so purchasing and using $1 coins in this manner is a better investment than what I’m currently getting from my bank, and since we use the coins for our everyday purchases, we comply with the circulation program.
Of course if you want to give this a try, many credit cards with “cash back” systems do not count cash-like purchases towards your cash back totals. You’ll have to check your cardholder agreements.
Also if you purchase coins through this program and deposit them directly into your bank account in an effort to order more, you’ll be in violation of the program (which has some stiff penalties). The coins you order through this program are meant to be used, not hoarded or cashed-in.
For those of you who think this is “cheating the system” let’s go over the math:
Let’s first make a few reasonable assumptions:
- A 19 pound package sent via UPS standard delivery costs about $30 (a high-end estimate).
- The credit card charges the government $20 (2%) on the transaction (a high-end estimate).
- Each coin put in circulation saves ~$0.083 a year times 1,000 coins = $83.
- So the first year, the savings to the government is $33.
- The the additional 29 years in circulation, the savings amounts to $0.083 a year times 1,000 coins times 29
= ~$2,440 total government savings over 30 years.
It’s money that saves money.
In either case, this is some food for thought.