Numismatists, note: America is no longer penny-less
The US Bureau of the Mint makes a lot of cents.
The government's moneymaker is pouring out pennies at a rate of more than 1 billion a month, 13 billion a year. Shipped by the ton to regional Federal Reserve Banks, the 1-cent pieces are distributed to commercial banks, dumped into cash registers of businesses, and eventually clink into people's pockets.
The huge numbers are helping the mint win a war - a war of attrition. Despite the unknown number of pennies hiding under sofa cushions and stuck in corners of dresser drawers; despite groaning penny banks, overflowing mayonnaise jars, and coin books neatly filled with coppers old and new, in most places the great penny shortage is over.
Last week, for example, the Federal Reserve Bank in Boston removed a two-year-old penny quota for New England banks. Now they can help themselves to as many as they want. ''We're going to give it a try,'' says a spokeswoman in the regional bank's coin room. ''We'll see how long it lasts.''
Mint spokesman John Doom says on a recent trip up and down the East Coast he found adequate penny supplies, although he allowed that some routine spot shortages could be occurring.
Last December, Boston's First National Bank was offering $1.10 for every dollar's worth of pennies turned in. Today, says Robert Florence, vice-president for coins and currency, no incentives are being offered and none are planned. ''If it continues like this, we won't have any problems,'' he says. When other banks or businesses ask for extra pennies, ''we usually don't have any trouble helping them out.'' Some banks, he says, now ''can live off what they're getting in'' from customers. A few even have a surplus.
The life of pennies can be short, barely long enough for the shine to wear off. About 30-to-35 percent of all pennies are out of circulation before they're a year old. Another 8 percent disappear each year after that. One estimate puts the number that have vanished since 1959 at more than 140 billion.
How to replace these ''one-way'' coins has troubled mint officials for years. When the price of copper rose to $1.40 per pound in the mid-1970s, the intrinsic value of the metal approached 1 cent per coin. Turning out 1-cent pieces, 75 percent of all coins produced, nearly became a money-losing proposition. And even with copper prices now down to 70 cents per pound, a copper penny costs 0.9 cents to make.
That's why, beginning last January, regional mints in West Point, N.Y., and San Francisco began making pennies of 97.6 percent zinc with a thin copper coating. The new pieces cost about 0.6 cents each to produce, saving taxpayers at least $25 million a year, says Mr. Doom. In October, mints in Denver and Philadelphia will complete the switch to zinc.
The new ''zinc-ies'' may have solved the shortage, but they have their critics, too. Some people claim the coin somehow seems less valuable. ''Personally, I feel it's continually cheapening our money'' by using a metal ''with no intrinsic value,'' says Glen Smedley, spokesman for the American Numismatic Association, a nationwide nonprofit educational organization with headquarters in Colorado Springs, Colo.
Nonetheless, says Mr. Smedley, coin enthusiasts won't turn their backs on zincies. ''A collector will collect whatever the mint will turn out,'' he says, ''even though he may have personal feelings'' about the quality of the coin. Smedley expects no run on copper pennies, such as happened when silver dimes and quarters were replaced in 1964. ''It's not the same as holding gold or silver. You could have a lot of them and they still wouldn't be worth too much,'' he says.
Where does he think all the pennies go? ''That's a question hundreds and hundreds of people would like the answer to,'' he muses. ''We know an awful lot of them are just plain lost.