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Steel Yourself for New Cent
May 09, 2008

It looks like a steel cent has moved closer to reality and a steel nickel is a definite maybe after the House of Representatives passed H.R. 5512 yesterday.

Passage came after it was caught up in two days of political infighting on Capitol Hill. The bill calls for a copper-colored steel cent. The new composition would come into use 270 days after the Senate passes an identical bill and the President signs it.

The House wording provides an escape clause if the Treasury can find an alternative composition in 90 days to achieve the same goals of lowering production costs to less than one cent for each cent produced.

That isn't likely.

Steel nickels may be in our future, too. There is mandate language but the time frame is longer and the Treasury is asked to jump through a number of hoops that could easily prevent any action.

The mandate language is two years after enactment of the legislation into law a nickel-coated "primarily" steel 5-cent coin will be produced, but the there is also a very big sticking point. The House mandates a new composition that can "co-circulate with the existing supply of 5-cent coins and work interchangeably in coin handling machines."

Good luck with that.

Steel is magnetic and copper-nickel is not. The use of magnets is a common form of vending discriminator mechanism. Steel is also significantly lighter.

The legislation also provides a list of exceptions to allow the Treasury to wiggle out of the mandate language, but these include consultation with the vending machine industry and other coin users, and other hurdles that make reaching any kind of consensus and conclusion difficult if not impossible.

Mint Director Ed Moy is not buying the steel mandate even for the cent. He issued a statement yesterday looking for better legislation to come out of the Senate.

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Recent Comments
On May 9, 2008 Stephen F. Stevison said
I am very sorry to see that our government has sought no public comment or suggestions, regarding the change in composition of our pennies and nickels.

"Steel" has been tried in the past, with our 1943 pennies, and has been found to be subject to rust!  It seems it would likely suffer the same effects this time around.  Why not Aluminum?

 In your article, you state the case for vending machines.  Steel is magnetic, and heavier!   Well, aluminum
is NOT!

 Why can't our self-proclaimed experts in Washington, put the question of the
new coin composition to collector's, Numismatists, or others who are much more knowledgeable?  Oh, I forgot .....
because "they are the deciders"!
On May 9, 2008 arthur saltzman said
i love people who always cry about the government when they try to save money ..if the production costs of the penny and nickel are more than there actual worth ...thats plain bad business  ..also the bill provides a 90 day "escape" clause let the mint director decide what composition is best as long as the production costs for both coins is less per coin than their value...i think its a great idea final note write your congressman ...write to the mint tell him to use aluminum ..get the ball moving don't just complain about congress trying to save money for a "change" ...!!!!
On May 9, 2008 Bob Mikesell said
Mr. Stevison, you are probably not aware of the fact that all of Canada's minor coinage(through half dollar), British 1 and 2 pence, and the 1, 2, 5 Eurocent coins are all copper or nickel plated steel. They seem to make it work just fine. The problem with the 1943 cents is the fact that zinc was the plating metal and the steel was plated before the blanks were punched so the edges of the coins were exposed.  Zinc is also a fairly reactive metal- just look at any mid 80s cent(Zincoln) that has spent time in circulation, they are usually corroded.  The 1943 cents were botched from the beginning- we are not going back to that type of a setup.
On May 11, 2008 sal cento said
aluminum bronze for the penny and german silver for the nickel
On May 11, 2008 john mcCullagh said
Why don't they go straight to wood and forget about metal altogether!. After all Congress has always thought that money grows on trees, so wood would be appropriate- would it not?

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About the Author
David C. Harper has been a coin collector since 1963. He joined the Krause Publications editorial staff in 1978 and is currently editor of Numismatic News and World Coin News. He also edits two books annually, North American Coins & Prices and Coin Digest. He is the author of the Class of '63 column that runs each week in Numismatic News. His first bylined numismatic article appeared in the June 1971 issue of Coins Magazine and his various Krause Publications assignments included a stint as editor of the magazine 1980-1983. Harper received a bachelor of science degree from the University of Wisconsin-Oshkosh in 1977. He had a double major of journalism and economics.

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