posted by Matt W on October 24th, 2012

My Grandpa W. gave me an 1887 silver dollar when I was a kid. In a minor miracle, I still have it. I have always loved coins, but especially dollar ones. As a big history buff, I thought it was particularly cool when they came out with the Presidential coins (George Washington is sitting on my desk as I type this). But the main reason I have always liked the dollar coins is that they are a more efficient and cost effective way to run a monetary system.

Now, if the government could just figure out how to use them.

Susan B. Anthony’s dollar coin sucked. They really did. What was the government thinking, making them basically the same size and color as quarters? If they had come out with Susan B. Anthony dollars before the 19th amendment it would have set back woman’s suffrage another 50 years, as people still associate her name more with that crappy dollar coin than her work to promote woman’s rights.

The Golden Sacagawea dollar was a nice design effort although it never really caught on. I started carrying Sacagawea dollars in my pockets whenever I could find them, but they were mostly relegated to the change dispensers at Post Offices. Maybe if they had made a Pocahontas coin and cross marketed them with the Disney movie, they would have taken off. Disney marketing the US Government, now there’s a thought. Anyway, it was about this time that I started reading that the US government could save millions of dollars every year, if they changed from dollar bills to coins. Basically the idea is that coins last so much longer than paper dollars that once you have enough in circulation you save a tremendous amount of money because you have to replace them less often.

Next there were the Presidential Dollar coins. They were an excellent design. Like the Sacagawea they had a smoother edge, and the shiny brass look separated them from all the other coins. They placed a picture of the President being honored on the front with Lady Liberty on the back. I especially liked the imprinted “E Pluribus Unum,” (our original US motto) and “In God We Trust” (our current US motto) juxtaposed on the edge of the coin with the date. It pissed me off when it was placed back on the face because according to a certain conservative senator, “Placing it on the edge is the first step to removing God from our society.” Let me just say, if not seeing “In God We Trust” on the face of our money tests your faith, then you need a new religion. It was an elegant design. Anyway, I like the presidential coins and they started to mass produce them. I used them as often as possible to promote their use and start the change from bills.

It didn’t catch on. Now, I originally read that the savings per year from switching to dollar coins would be about $500 million dollars annually (enough to pay the salaries of 10,000 teachers), after you produced at least $600,000,000 worth of dollar coins. This is the amount needed to support their initial usage and replace bills. It takes a long time to produce 600,000,000 coins.  Other countries, who successfully integrated the usage of coins as a cost savings measure, eliminated the production of the equivalent paper currency. We didn’t. The main reason we didn’t eliminate the paper dollars was the senators from Massachusetts (the state where the paper for dollar bills is manufactured) presented legislation saying that paper is a far better way to have a dollar’s worth of currency, even though it is not as economically efficient. And finally banks don’t carry them because most people don’t use them and the banks don’t like to have that much money in change on site. Therefore, the people that want to use them don’t have access to them: an ugly cycle.

So obviously their use never really caught on. The government actually had to spend money to create a warehouse to hold all the uncirculated coins, and spent even more money to ship all the coins to the warehouse. Remember these are the same coins that would save the government money if they were actually placed in circulation. By the way, there are well over $1.2 billion worth now, more than enough to put into circulation and replace dollar bills.

In an ironic twist worthy of The Twilight Zone, when legislators found out we were spending money to create, ship, and store warehouses full of coins, they were rightfully outraged and sited this as just another example of government waste and/or government ineptitude. But their solution was to stop making the budget saving coins in production quantities, not to actually use them.

So in the end, we have an excellent money saving idea that had been mis-designed (Susan B), maligned by the extreme religious right for no reason, counter produced (both dollars and coins at the same time), mis-stored (at both banks and at the Federal Reserve), and not properly introduced to the American public (People of America, you’re basically paying over $500,000,000 a year in taxes for the right to use dollar bills; is it worth it to you? Remember, 10,000 teachers).  

Despite the Quixotic nature of my quest, every month I go to the bank and get them to ship me dollar coins so I can use them in an attempt to promote their use. So far I haven’t made much of a dent, but I will keep trying.

File Under Jack of all Trades