The Federal Reserve’s surplus inventory of Presidential dollars has
ballooned to a whopping 1.252 billion coins in three and a half years,
with collectors remaining the primary consumers for the coins.
Storage has become such a problem that a new storage facility is
being built at a cost of approximately $650,000 at the Federal Reserve
Bank of Dallas to handle the surplus inventory, according to the 2011
Annual Report to the Congress on the Presidential $1 Coin Program
submitted in June by the Board of Governors of the Federal Reserve System.
“The Federal Reserve estimates that it could hold more than $2
billion in $1 coins by the time the program is expected to end,”
according to the report. “Because of vault storage constraints and
insurance limitations at [contracted] coin terminals, the Reserve
Banks have been forced to spend resources to expand storage capacity
to hold the excess $1 coins, with no perceptible benefit to the taxpayer.”
The Federal Reserve supports a U.S. Mint legislative proposal to
eliminate the provision under the Native American $1 Coin Act of 2008
that a minimum 20 percent of all dollar coins struck be Native
The proposal is contained in Section 119 of the Administrative
Provisions for the Department of the Treasury in the President’s
Budget for Fiscal Year 2012.
The Fed report indicates a recent survey found that 60 percent of
all Native American coins issued have been redeposited with the
Federal Reserve Banks by depository institutions. Unlike the
Presidential dollars, the Native American dollars are not distributed
into circulation through the Federal Reserve, but directly from the
Mint to the public and banks through its Direct Ship program.
The Fed’s 2011 report to Congress indicates it is anticipated that
the Federal Reserve Banks will incur shipping costs of more than $3
million to transport excess Presidential dollars from their respective
locations to the new storage facility.
The new facility is expected to be able to handle storage of
forecasted inventory growth through the end of the Presidential $1
Coin Program, according to the report.
The Presidential dollar coin program does not have a specific
According to the Presidential $1 Coin Act of 2005 (Public Law
109-145), “No coin issued ... may bear the image of a living former or
current President, or of any deceased former President during the
2-year period following the date of the death of that President. ...”
The issuance of the Presidential coins is to end when each president
has been so honored, subject to the restrictions against depicting a
living former or current president, or one who has died recently.
Approximately 40 percent of all Presidential dollars issued into
circulation have been redeposited with the Federal Reserve Banks by
participating depository institutions, according to the Fed’s 2011
report to Congress.
Fed officials indicate that with demand dropping for the dollar
coins, some of the Fed’s largest cash customers are evaluating whether
to continue to provide the Presidential dollars to their customers. If
the depository institutions decrease or eliminate their orders with
the Fed altogether, corresponding Fed orders to the U.S. Mint would
drop significantly, according to the report.
According to U.S. Mint production reports, the Mint has struck
2,227,570,000 Presidential dollars for circulation through the Ulysses
S. Grant dollar coin. The Rutherford B. Hayes Presidential dollar was
still in production when the Fed’s report to Congress was filed in June.
Additional dollar coins
Participating depository institutions may currently order
Presidential dollars by specific coin from three weeks before until
two weeks after each coin’s official release into circulation through
the Federal Reserve. That ordering procedure went into effect with the
Feb. 18, 2010, Millard Fillmore Presidential dollar coin release.
From the Feb. 15, 2007, release of the George Washington
Presidential dollar through the Nov. 19, 2009, release of the Zachary
Taylor Presidential dollar, the ordering period was two weeks before
the circulation release date until four weeks after.
While the Presidential dollars have a specific ordering period, no
similar program exists for ordering Native American dollars. The
Federal Reserve Banks are not ordering any Native American dollars for
The public and banks may order rolled Native American dollars and
some Presidential dollars at face value in $250 boxes through the U.S.
Mint’s Direct Ship Program.
According to the Fed’s 2011 report to Congress, the United States
Mint has indicated that it distributed 121 million Native American
dollars through its Direct Ship Program in 2009, another 47 million
coins in 2010 and 16 million through June 1, 2011.
The United States Mint also indicated that it has placed into
circulation 60 million Presidential dollars via direct shipments since
the start of the Presidential $1 Coin Program through June 1, 2011.
These totals are not included in the Reserve Bank statistics
reflected in the accompanying table.
The Fed has been meeting annually since 2008 with coin users,
including depository institutions, community bankers and armored
carrier representatives to gather feedback about demand and potential
obstacles to the circulation of dollar coins.
Armored carriers are contracted by the Fed as coin terminals to
store and distribute the coins.
From the most recent meetings, according to the 2011 Fed report to
Congress, “Participants again indicated that transactional demand for
$1 coins has not increased since the start of the program and that
overall demand continues to come primarily from collectors. Most
meeting participants did not believe that demand would increase
significantly for future coin releases, with the possible exception of
the coins commemorating the most popular former Presidents.”
According to the Fed report, “Some depository institutions stated
that because of operational challenges associated with distributing
the $1 coin to all of its branches and decreasing demand, as well as
increased levels of $1 coin inventories at the branch level, they may
not continue ordering $1 coin for all branches or may stop
participating in the program altogether.”
Some of these depository institutions provide coin and paper money
services to many small depository institutions that do not obtain cash
services directly from the Federal Reserve, according to the report.
Depository institution demand has continued to decline, albeit at
a slower pace than earlier in the program.
The 1.252 billion coins in Fed inventory is 1.1 billion more than
the Fed held at the beginning of the Presidential dollar coin program
in 2007, according to the Fed report. ■