The Nov. 29 hearing on “The Future of Money: Dollars and Sense” dealt with two topics that have been the subject of legislative attention over the past several years: how to transition to a dollar coin and what are the possibilities for alternative coinage medals.
These issues aren’t new, but they seem to have taken on a new urgency in the last several years.
The numbers make clear that switching from a paper dollar to a dollar coin saves money. The Government Accountability Office reported in February 2012 that replacing $1 notes with $1 coins could provide $4.4 billion in net benefits to the federal government over 30 years. The GAO has reported six times over the last 22 years that switching the $1 note to a $1 coin would save hundreds of millions of dollars annually.
Coins last longer and are more “green” in that, in the stream of commerce, a $1 note lasts less than five years, while a $1 coin can last 30 years. As an experiment, carry around a small-sized Presidential dollar in your pocket and see how long it takes to actually wear down. You’ll see that these dollar coins are surprisingly durable.
Yet, dollar coins haven’t taken off in the United States because, when forced to choose between a coin and a note, Americans routinely choose the note. One problem is that a choice exists at all. The GAO’s testimony explicitly stated that public acceptance of a $1 coin has not succeeded in large part because the $1 note remains in circulation.
Both Canada and the United Kingdom made the change more than 20 years ago and, as the GAO report stated, “while observing that the public was resistant at first, Canadian and United Kingdom officials said that, with the combination of stakeholder outreach, public relations efforts, and ending production and issuance of the notes, public dissatisfaction dissipated within a few years.” It can be done.
In its Nov. 29 testimony, the Royal Canadian Mint discussed the success of its dollar coin program. Its dollar, nicknamed the Loonie for its Loon bird design, is visually distinct with an 11-sided shape and has been embraced by Canada’s population. The RCM cited a poll by CBC, Canada’s public broadcaster, that found almost 70 percent of Canadians identified the coin as a recognizable symbol of Canada.
Beyond the public’s affection for the design, Canada’s government saved $175 million over its first 20 years and Canada continues to innovate with its coin compositions, like the multi-ply steel $1 coin that it launched in 2012. That composition layers nickel and copper over a steel core and results, according to the RCM, in “the most economical, durable and secure coins on the market.”
To make a small sized $1 coin stick in the United States, a change must occur. Beyond being visually distinct from a quarter dollar, it has to be the only option and it has to become familiar to the public.
To be successful, it has to be instantly recognizable. A key takeaway point from the hearings is that Canada successfully “branded” its dollar with the distinctive Loon design, and over time the “Loonie” became an instantly recognizable symbol of Canada.
The current small-sized $1 coin program in the United States is characterized by the false start of the Anthony dollar (1979 to 1981, 1999), the Sacagawea/Native American dollar (1999 to present) and the various Presidential dollars (2007 to present). Unless laws are changed, in a few years, more than 50 distinct design types will exist for the small-sized dollar series. That’s just too much.
If a small-sized dollar is to stick, Congress should consider picking a design and sticking with it so that people know what a $1 coin looks like and usage becomes a familiar part of an American’s daily routine. ■