Penny's worth of thoughts
The following article discusses the ongoing debate about what should happen to the United States Cent, but the author makes a suggestion I haven’t heard before. The suggestion is to revive the 2 and 3-cent coins from the 1800s while getting rid of the one cent piece. I wonder if that would ever be entertained by the powers that be.
A big part of Illinois’ history dies if the U.S. Mint decides it is economically wise to get rid of the penny.
The mint hasn’t taken that step, but notes that it is costing 1.2 cents for every penny it makes because of the escalating cost of metal that goes into pennies. Pennies are 97.5 percent zinc and 2.5 percent copper. Zinc prices have tripled in the past three years and copper prices have been slowly rising for about 20 years.
Producing a product at a loss is not a good business practice, which isn’t always enough of a reason for Uncle Sam to discontinue a good thing. But the fact that the U.S. Mint made a rare announcement of the cost of manufacturing any coin suggests there is at least some thought to changing or eliminating the penny.
The penny has a close link to Illinois history through Abraham Lincoln.
Lincoln’s likeness is on the penny. It was the first U.S. coin to feature a historic figure. The first Lincoln penny was issued in 1909 on the 100th anniversary of Lincoln’s birth. The original penny had Lincoln’s likeness on the front and wheat shafts on the back. For Lincoln’s 150th anniversary in 1959, the penny was redesigned to replace the Wheat shafts with the Lincoln Memorial.
Those are the historical reasons for Illinoisans to cling to pennies.
Instead of suggesting the Mint continue making pennies at a loss, it could make them of a less costly metal and keep the Lincoln likeness for historical value.
About 30 years ago, the Mint experimented with pure aluminum pennies. But the 1.6 million pennies were never circulated and were destroyed.
The Mint has to produce more than 80 billion pennies a year, and they’re expected to last 30 years. But it has been estimated that only about 150 billion are in circulation at any one time. One explanation is that people hoard them. Let’s face it, they seem to be worth more when you can take a piggy bank full to a bank and exchange them for dollar bills.
It’s difficult to justify pennies on need when you see people tossing extra pennies into containers near retail cash registers and children tossing them into water fountains, but there is a convenience factor to consider.
If the need for smaller-denomination coins exists, maybe we could return to the 2-cent and 3-cent coins made in the mid to late 1800s.
A primary reason for pennies is taxes. Many governmental units tax retail sales. If pennies were discontinued, the taxes would have to be rounded off - a pain for clerks. If there were a law mandating true rounding - anything under 3 cents goes back to zero, 3 cents and over goes to a nickel - the actual taxes collected could be about the same. Without such a law, there could be a tendency to always round up to the nearest nickel.