Dollar Coin In, Penny Out
Americans may have to adjust to rounding off their cash purchases. US CURRENCY
HEADS are going to roll, literally, if the currency reform people get their way in the United States: Goodbye to George Washington on the dollar bill; hello to Christopher Columbus on a new dollar coin; goodbye to honest Abe Lincoln on the humble penny, and perhaps a welcome back to Thomas Jefferson on the $2 bill. In April, the US Senate will consider legislation that authorizes the minting of dollar coins once again; but this time backers hope the law will include withdrawing dollar bills. To make room in cash drawers and wallets, another proposed law will dump the penny.
``The dollar coin is long overdue in this country,'' says Rep. James A. Hayes (D) of Louisiana, a cosponsor of the dollar reform and chief sponsor of a ``price rounding'' act. The penny, he says, ``is no longer necessary for day-to-day transactions.'' Instead all final cash-purchase prices would be rounded to the nearest nickel; if a carton of milk came to $1.41 or $1.42, you'd pay $1.40; if it cost $1.43 or $1.44, you'd pay $1.45. The amount for check and credit card purchases would not be rounded.
The idea is to save time and money. The US would no longer waste valuable time minting, counting, and rolling pennies.
To date, the United States is the only Western country that doesn't have a coin worth the value of a dollar; England, Japan, and West Germany all have coins worth even more. Proponents of the new piece of change cite Canada's success with its dollar coin - the Loon - which had completely replaced that country's dollar bill by January of this year.
Support for coin reform includes many users: public transportation, convenience stores, vending-machine makers, banks, laundromats, and the visually impaired. All these interests are represented under one Washington lobbying group: the Coin Coalition, headed by James Benfield.
``Our bottom line is to bring back the $1 coin,'' says Mr. Benfield, ``and by necessity phase out the dollar bill.''
Why the dollar coin?
Coins cost less to make. Though it costs slightly more to produce a dollar coin - 3.5 cents compared with the paper dollar's 2.6 cents - the coin lasts 40 times longer - two decades rather than the bill's 18 months (or 400 transactions).
Vending-machine makers say it costs less to retrofit their systems for dollar coins than for dollar bills. Counting dollar bills requires more handling; coins can be counted more cheaply and quickly by machine.
Coins save time. Public transportation systems would benefit from dollar coins, says J. Wesley Leas, a transportation consultant in Rosemont, Pa., because so many fares are close to a dollar. That many quarters are heavy, and dollar bills are more difficult to count at the end of the day. ``We need a viable dollar coin very badly,'' he says, which would ``offer convenience to the user, help with handling costs, and decrease boarding time [on buses] and ticket-buying time at vending machines.''
Several transit systems accept the Susan B. Anthony dollar coin, which was first minted in 1979. But the coin so resembled a quarter that it never caught on with the American public. Although a growing number of city buses and subways are being equipped to take dollar bills, counting and reorienting the bills right-side up - which must be done before they're taken to the bank - takes time, says Mr. Leas.
Coins offer more vending machine options. If coins were used instead of dollars, says the National Automated Merchandising Association, more goods - books, salads, batteries - could be offered from vending machines, without the need for dollar changers (which cost $400 to install and don't always accept the consumer's tattered bill).
Less fraud. The visually impaired prefer a dollar coin (as long as it's easy to distinguish from a quarter) to a bill, because it lessens the chance of mistaking a dollar for a bill of greater value.
Why all the clamor for a dollar coin, when Uncle Sam already has $400 million worth of Susan B. Anthonys collecting dust in vaults across the country?
That's easy, says Benfield: The Anthony is poorly designed.
The new coin must be a different color (copper, please, says the chief sponsor of the dollar coin legislation, Rep. Jim Kolbe (R) from from copper-producing Arizona), and it must have smooth rather than ribbed edges. Also, the dollar bill must be withdrawn.
And there's got to be room for it in the cash-register drawer. Says Teri Richman of the National Association of Convenience Stores, ``If you're going to make room for a dollar coin, you're going to have to get rid of the penny.''
The Coin Coalition estimates that using a penny adds four seconds to every transaction - and pennies are used in 80 percent of all purchases.
This expense is more than they're worth, says Ms. Richman. ``With labor costs what they are, the convenience store industry would much rather spend time on customer service than on rolling pennies.''
As with paper dollars, the one-cent piece takes too much time to count. Citing figures from the US Bank of Oregon, Benfield says, ``The real cost to roll pennies is about 6 cents per roll.'' On a busy day, the Oregon bank might put together up to 30,000 rolls, spending $1,800 a day, possibly as much as $150,000 to $200,000 a year.
Of course some pennies never even make it to the bank: A 1986 study at Disney's Epcot Center in Orlando, Fla., revealed that Americans had an average of 993 pennies at home. No one knows how many pennies are thrown into the trash each year, or end up in the bottom of wishing wells.
Who will make out with more cash if prices are rounded, consumer or storeowner?
Neither, says Harvard University math professor Persi Diaconis. ``If eveything was the way it is at random, then it would break out even.''
Congressman Hayes - who says almost all stores in his Louisiana hometown have little jars of pennies sitting next to the cash register for people to take from or add to - says American consumers aren't that price-sensitive. ``Do you mean to tell me that you would pass a up a loaf of bread because you save a penny one way or another?'' he asks.
In a Boston supermarket, cashier Otavio Paula-Santos, a native of Brazil, says pennies don't give him a problem at all. ``Get rid of the penny?'' he asks, raising his eyebrows in shock. ``It's the same thing as removing seconds and minutes!''