The fact that Native American and Presidential dollar coins are not circulating in the United States is not a surprise to anyone.
As long as the paper dollar continues to be produced and made available, banks and the public will not use dollar coins. The United States proved that in the early 1980s, but unlike other nations, we refuse to deal with reality. Other nations (some 47 to date) learned from our failure with the Anthony dollar coin. They created distinctive dollar coins and withdrew the paper equivalent. Their dollar coins circulate. In fact, most have added $2 and even $5 coins and withdrawn the corresponding paper denominations. Their high-denomination coins circulate with no problems and at a cost savings to the issuing governments and central banks.
Meanwhile, here in the United States our central bank — the Federal Reserve — is reporting its surplus inventory of Presidential dollars has ballooned to 1.252 billion coins in three and a half years. Storage has become such a problem that the Fed is building a new facility at a cost of approximately $650,000 at the Federal Reserve Bank of Dallas to handle surplus inventory. By 2016, when the Presidential dollar program is expected to end, the Fed is estimating it will have more than 2 billion $1 coins sitting in storage vaults.
The only solution offered thus far is to eliminate the requirement that 20 percent of all dollar coins struck be Native American dollars (which are not even distributed through banking channels).
Apparently no one has the courage to suggest that the remainder of the Presidential dollars be produced to demand, which would essentially make the program a numismatic enterprise for the U.S. Mint. That would satisfy collectors, who appear to be the only segment of the population interested in the Presidential dollar coins, and cut the continuing build-up of the surplus.
It’s time for Congress — specifically the House Subcommittee on Domestic Monetary Policy and Technology — to review the dollar coin “experiment” and offer either a plan to replace low-denomination paper money with coins or end production of dollar coins for circulation. To continue a failed program is an exercise in stupidity. There is a solution to the problem, but it will take leadership and common sense to accomplish — both of which are rare commodities these days. ■