Monday Morning Brief for April 18, 2022: Resurrecting denominations
- Published: Apr 18, 2022, 7 AM
Periodically, we get a phone call or email from a reader asking about the accuracy of a report (not in Coin World) that they read recently that the United States Mint was abandoning production of the cent denomination. The origin of the rumor is an article published a few years ago, on April 1, a date that in the United States is called “April Fools’ Day,” set aside for juvenile pranks and fake news.
There is no truth to the rumors, Mint officials assure us, even though it costs the government more than the coin’s face value to strike and distribute the cent. The government technically loses money for every cent it produces and releases to the Federal Reserve.
Past efforts to eliminate the cent have met with failure. No one in government is willing to commit to doing that, just as no one in officialdom is willing to pass legislation that would permit cash transactions to be rounded down or up to the nearest 5-cent figure. Store policies in recent years resulting from the national coin shortage of either requiring exact change for cash transactions or a refusal to return physical change have met customer dissatisfaction.
The government should revisit whether it is striking the appropriate mixture of coin denominations, and whether it is sound fiscal policy to continue striking the two denominations that are unprofitable (the 5-cent coin also costs more than face value to strike and distribute), but should proceed cautiously. U.S. numismatic history is filled with unusual denominations that made their way into circulation, and decades ago this month, Congress was considering whether to resurrect two canceled coin denominations from past centuries — the half cent and the 3-cent coin.
The genius, or goat, behind the proposals was Rep. William Ashbrook, D-Ohio. He served nearly 10 full terms in Congress from 1907 to his death in 1940, with a gap from 1921 to 1935 during which he was involved with newspaper publishing and banking in Ohio.
He was also a coin collector and member of the American Numismatic Association.
The May 1912 issue of the ANA journal The Numismatist was filled with multiple articles featuring the name of Rep. Ashbrook. One article noted that the Senate had just passed a House bill introduced by Ashbrook seeking a federal charter for the ANA. The bill was signed into law on May 9, 1912, and the ANA still retains its federal charter.
Ashbrook was also working in Congress to reauthorized two former coin denominations, the half cent of 1793 to 1857 and the 3-cent coin, issued in silver and copper-nickel versions in the mid- to late 19th century.
According to the editor of The Numismatist, Ashbrook gained the approval of the Mint director for the resurrection of the two coins, and in May 1912, it seemed likely that the legislation would become law.
It did not.
Striking a half cent and a copper-based 3-cent coin made no sense in 1912. At the time, the smallest denomination being struck for circulation was the cent and the largest, the half dollar. Production of the dollar had been halted after and millions of the silver coins sat in government vaults, unneeded. Little has changed since then, with the current dollar coin series struck for collector sales only and the half dollar also struck mostly for numismatic sales only.
In 2022, just as 1912, a certain level uncertainty surrounds whether the government is providing consumers the correct mix of coin denominations. What will be circulating in 2032, or a century from now?
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