When Will Coins Be Obsolete?
November 17, 2011
We have to wait until 2013 to see what the U.S. Mint will report to Congress regarding the future of U.S. coins and their compositions.
The compilers of this report should consider themselves the numismatic version of the current congressional supercommittee that is looking for ways to balance the federal budget.
Like the supercommittee, the Mint compilers of the report to Congress should go long and come up with ways to change the U.S. system of coinage to make it viable for many years to come.
On current trend, the combination of technological advance and the fact that American circulating coins are a 19th century construct will spell the end of U.S. coins.
Well, technological advances do not happen in a vacuum. People will use what is most convenient.
When was the last time you heard anybody say American coinage was convenient to use?
Americans see red when anyone suggests anything that might require them to use dollar coins. They cite quantity and weight as the culprits.
Coins will always weigh more than paper money. Will they have any countervailing value to justify the increased inconvenience of using them? That is the question. After all, how may quarters are you willing to pump into a vending machine to get a soda or a snack?
We know the vending machine industry is looking into sophisticated vending machines that wouldn’t require the use of coins or paper money at all.
Electronic readers on vending machines would eliminate the need for coins or notes.
So rather than simply try to figure out the cheapest composition for the cent and the nickel, the Mint should give Congress alternatives to the present system that the public will find convenient.
Is doing that warranted? Is it even possible?
If it isn’t, on present inflation trends alone, the value of the quarter, the coin with the most current utility, will sink below the value of the 1-cent coin of 1967 in 36 years.
Why do I choose 1967 as the base year? Call it personal vanity. I had a paper route. The use of coins was my stock in trade then. But even at that time I did not find cents particularly useful for the job at hand.
Once the quarter sinks that level of purchasing power, nobody would want to use it.
Add technology and the end of the present coinage system will come much more quickly.
That’s why the Mint needs to suggest something that might keep coins relevant and useful for many years to come.
That might be an impossible task, but the effort should be made.
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