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Many Americans are phasing out cash altogether in favor of plastic. But there’s separate debate that’s been revived about whether to replace dollar bills with dollar coins. It’s pitting those who feel coins would actually save money, including the Government Accountability Office, against those who doubt whether dollar coins will ever catch on. We explore the debate.
- Peter Hopkins Spokesperson for Crane Paper
- Janie Lorber Reporter with CQ Roll Call
- Shawn Smeallie Spokesperson for the Dollar Coin Alliance
- Doug Mudd Curator, Edward C. Rochette Money Museum, American Numismatic Association
- Tom Davis Director of federal government affairs, Deloitte LLP; Vice Chairman of the Metropolitan Washington Airports Board; President, Republican Main Street Partnership; Former Member, U.S. House of Representatives (R-Va, Dist. 11).
MR. KOJO NNAMDIFrom WAMU 88.5 at American University in Washington welcome to "The Kojo Nnamdi Show," connecting your neighborhood with the world. The dollar bill is the most widespread bill in circulation. The Bureau of Engraving and Printing prints 16 million of them every day and although we're paying more often with credit and debit cards these days and using a lot less cash, the dollar is still the worldwide symbol of American economic might.
MR. KOJO NNAMDIBut some think the dollar's time has passed, at least the dollar bill's time and a longstanding proposal is back on the agenda to replace the dollar bill with a coin. That debate has gone on for years. Those who say the dollar bill should be replaced, point out that bills last less than two years on average while coins last decades.
MR. KOJO NNAMDIAnd from the metro to vending machines, bills end up costing millions when they jam up. Yet the dollar coin has never really caught on with most Americans who don't want to say goodbye to the dollar bill and think walking around with a pocket full of heavy coins is impractical. Joining us to discuss the issue is Janie Lorber. She's a reporter with CQ Roll Call. Janie Lorber, thank you for joining us.
MS. JANIE LORBERThank you for having me.
NNAMDIAlso with us is Shawn Smeallie, he's a spokesperson for the Dollar Coin Alliance. That's the lobbying group representing organizations that would like to replace the dollar bill with the dollar coin. Shawn Smeallie, thank you for joining us.
MR. SHAWN SMEALLIEIt's great to be here.
NNAMDIAnd joining us by telephone from Colorado is Doug Mudd. He is the curator of the Edward C. Rochette Money Museum at the American Numismatic Association. Doug Mudd, thank you for joining us.
MR. DOUG MUDDThank you for having me, Kojo.
NNAMDIAnd I invite our audience to join the conversation 800-433-8850. I suspect this is an issue about which everybody -- each and every one of us has an opinion. Are you in favor of replacing the dollar bill with a dollar coin? Why or why not? Call us at 800-433-8850, that's 800-433-8850 or you can send email to email@example.com Joining us by telephone from Vermont is Peter Hopkins. He's a spokesperson for Crane and Company that makes the paper that U.S. bills are printed on. Peter Hopkins, thank you for joining us.
MR. PETER HOPKINSGood to be with you.
NNAMDIPeter, although we use the dollar bill on a daily basis, most of us don't know much about the money in our pockets. Let's start with some basics. What's the dollar bill made from?
HOPKINSThe dollar bill is made from 75 percent recovered cotton fibers and 25 percent recovered flax fibers. These are fibers that are left over from the manufacture of cotton and linen textiles.
NNAMDIWell, you are responsible, Crane and Company that is, for the paper the dollar bill is printed on, but you don't do the printing. Big changes to the design of the dollar have not happened often, Doug, and it's had almost no changes for decades. What were some of the major changes to the dollar bill, Doug Mudd?
MUDDWell, we've added some new features basically to prevent counterfeiting, including color and certain micro-printing features along with multi-color inks and things like the security thread. All of these have been designed with an eye to the look of the dollar bill, but more importantly with an eye to preventing counterfeiting.
NNAMDIColor was added to U.S. bills, though it's subtle compared to foreign currency. The dollar bills along with coins also bear the motto, In God We Trust. It's my understanding that that was relatively recent?
MUDDYeah, it was very recent. Essentially, the idea was to make the paper money go in line with the coins. The coins had featured In God We Trust since, well, beginning with the civil war and in the 1950s the movement caught fire and it was decided to make it a requirement that all of our currency, paper or coinage would have In God We Trust on it.
NNAMDIDoug, U.S. currency is unusual in that it is never revalued?
MUDDYeah, basically the United States has never defaulted on its debts and all issues of paper money since the 1860s, since the civil war, are still good at face value. Their terms have changed somewhat so a gold certificate from the 1870s is -- you can't get gold for it, but it's still worth $10 if it's a ten dollar bill. Of course, it's -- you'd be crazy because it is worth a lot more as a collector item than it is as a bill nowadays.
NNAMDII guess so. Peter Hopkins, as we mentioned, the Treasury prints millions of dollar bills each day, but most of these are replacement bills. How long does a dollar bill actually last?
HOPKINSJust recently, the Federal Reserve has certified that the circulation time of the one-dollar bill is now 40 months. That has improved dramatically over the last several years and there are still efforts underway to make that even longer.
NNAMDIWhat happens to the bills that are too worn to be used?
NNAMDIWhat happens to the bills that are too worn, worn-out to be used?
HOPKINSThey're taken out of circulation at the Federal Reserve banks and they are shredded and disposed of.
NNAMDIAnd how much, Doug, does it cost to make a dollar bill?
MUDDCurrently, it's somewhere in the order of about three to seven cents. It depends on the ink and other things. I haven't seen the most recent cost with the increased color, but it's somewhere in that range.
NNAMDIDoug Mudd is curator of the Edward C. Rochette Money Museum and the American Numismatic Association. He joins us by telephone as does Peter Hopkins. He's the spokesperson for Crane and Company that makes the paper U.S. bills are printed on. Now to you, Janie Lorber. Janie Lorber is a reporter with CQ Roll Call. Janie, the discussion about replacing the dollar bill with the dollar coin has been going on for a long time. Can you lay out the issues for us?
LORBERSure. It has been around since the '80s really and that's when we saw a lot of other countries, for example, Canada and the United Kingdom, plus Australia, replacing their one-dollar note with a dollar coin. And so we have a group of people now, automatic jukebox operators, for example, mass transit and they're pushing to replace the dollar bill for many of the reasons you outlined earlier with the coin.
LORBERAnd so one of the issues is that the GAO, the government has said, we will save $5.5 billion dollars, billion with a B over the next 30 years if we replace the bill with the coin. And the Fed and the Treasury, the Federal Reserve, have long been opposed to this and particularly now, they say they refute almost that entire report that the GAO has put out and saying that the central principle of that GAO report, that the government will make a profit by printing new currency. They say that that principle is incorrect.
LORBERAnd they also say one of the other issues that comes up is when you want to replace the bill with the coin is that machines that are only able to accept -- that aren't fitted to accept coins, they will have to be retrofitted. And the Fed and the Treasury say that when the GAO put out this new report, they didn't take into account the cost to industry.
LORBERAnd then another point you made that the American public is just simply quite resistant to change, pun not intended.
NNAMDIShawn Smeallie however the Dollar Coin Alliance thinks that the GAO report is entirely valid, why?
SMEALLIEWell, it's the fifth report since 1990 that has called for the change in the -- for the dollar coin for the dollar bill and it's valid. We actually think the savings are greater than they reported. They did a report ten years ago that said it would save half a billion dollars a year and we think that that is a -- we think that that's closer to the target. But it is valid because it's common sense. If you think about right now you have a coin that lasts over 30 years and a dollar bill that lasts somewhere between two and maybe 4 years because we haven't yet seen whether it lasts four years yet.
SMEALLIEIt doesn't take a lot of thinking to resolve that after a few years, you don't have to make a lot more coins and so the government is pretty much out of the business of printing coinage.
NNAMDIHow much does a dollar coin cost to make and how long does it last?
SMEALLIERight now, because this is true for cotton and dollar bills, the dollar bill actually costs about 9 cents to make and the coin costs about 15 cents to make.
NNAMDIAnd how long does the coin last?
SMEALLIEOver 30 years. In fact, I invite my listeners to check their pockets right now to see if they have a coin from the 1960s and I think you'll still see some there.
NNAMDIDoug Mudd, the smallest bill in Europe is the €5 note. The U.S. dollar bill is one of the smallest denominations in bill form of any currency in the world. Is there a historical reason for that?
MUDDWell there's historical reason in that we started using dollar bills, well, during the civil war and actually before then. But dollar bills became a norm because they were useful. People didn't like carrying a silver dollar-sized coin at the time and there were issues with the metal content of the coin because before 1964, the value of a coin was based on its content, metallically speaking. So a silver dollar was worth a dollar partly because of how much silver it had in it.
MUDDPrevious to that time, a silver dollar was based on, you know, 97 or 98 cents worth of silver being it was not what the government called it. Paper was much simpler to use because you didn't have that issue. You basically said that our dollar bill was based on the value of a dollar and the value of a dollar was either based on gold or gold and silver in the 19th century. So you didn't have an issue. The dollar could continue to be used regardless of any changes in the value of silver or the value of gold over time. So it became a preferred form of currency.
NNAMDI800-433-8850 is the number to call if you'd like to join this conversation about the dollar bill versus the dollar coin. We start with Debbie in Alexandria, Va. Debbie you are on the air. Go ahead, please.
DEBBIEHi. I was wondering why they can't make the dollar bill out of something stronger, like a nylon or a combination of materials?
NNAMDIAs a matter of fact, Peter Hopkins, we also got an e-mail from Petunia who says, "No one wants a dollar coin, end of conversation. Use paper which is stronger and lasts ten years. Surely, we can figure out how to do that." Can we, Peter, ten years?
HOPKINSYou know, it's -- we're a paper company and to be able to switch to a different substrate would be something that it would be beyond our desires certainly. One of the things that the Federal Reserve and the Bureau of Engraving and Printing requires of United States currency paper, no matter what the denomination, and no matter what sort of anti-counterfeit devices you may put inside the paper or the type of ink that you put on the paper is, the mandate is do not change the feel of the paper.
HOPKINSAlmost three-quarters of all counterfeits are caught at the point of transaction where somebody is there holding onto and feeling a bill whether it's the cashier who takes the money in. So in order to switch another substrate, we would lose the ability to catch the majority of counterfeits.
NNAMDIWhat kinds of paper technology are you currently looking at to try to make the bill last longer?
MUDDWell, Crane is a public -- or private company and I'm not sure I want to talk too much about Crane's emerging technologies. I think that there are some competitors in the marketplace who would love to know how to do what Crane's doing.
NNAMDIWell, Canada is working, it's my understanding, with a polymer paper that lasts years, not months. Good idea, you think?
MUDDIt's not my -- not for me to say, you know, what the Canadian government and the Canadian people wish to have as their means of transaction. You know, here in the United States, the marketplace has made its preference known for, gosh, more than 20 years. And the means by which Americans purchase their goods and services ought to be decided in the marketplace, not by the government forcing upon the public a coin that they don't want and don't use. And which will end up costing the American public billions of dollars in new taxes. In which, will increase the federal deficit for 10 years.
NNAMDIReading Shawn Smeallie's mind, he's saying, we'll see about that.
NNAMDIBut, Debbie, thank you very much for your call. We've got to take a short break. When we come back, we'll continue this conversation. Peter Hopkins, thank you so much for joining us.
NNAMDIPeter Hopkins is a spokesperson for Crane and Company. When we come back, we'll still be talking with Janie Lorber of CQ Roll Call and Shawn Smeallie of the Dollar Coin Alliance and Doug Mudd, curator of the Edward C. Rochette Money Museum at the American Numismatic Association and taking your calls, 800-433-8850. How do you feel about this issue? What advantages do you see with using a dollar coin? 800-433-8850 or you can go to our website, kojoshow.org, send us a tweet at kojoshow or email to firstname.lastname@example.org. I'm Kojo Nnamdi.
NNAMDIWelcome back to our conversation, dollar bill versus dollar coin. In studio with us is Shawn Smeallie, spokesperson for the Dollar Coin Alliance. That's a lobbying group representing organizations that want to replace the dollar bill with the dollar coin. Janie Lorber is a reporter with CQ Roll Call. She's in studio with us. Joining us by phone from Colorado is Doug Mudd. He is the curator of the Edward C. Rochette Money Museum of the American Numismatic Association.
NNAMDIWe're taking your calls at 800-433-8850. Shawn, tell us a little bit about the dollar coin. The main complaint people have seems to be that it's too big and heavy. How does the size compare to other coins and how much does it weigh?
SMEALLIEWell, you could have five dollar coins and they weigh 1.5 ounces. If, you know, if you have four quarters in your pocket, you can tell I have them here in the studio. I could show you but the four quarters weighs a lot more than $1.00 coin. And if you, for example, in Washington, you're trying to find a parking spot, you have to bring, basically, a roll of quarters to go ahead and park whereas if you had just a couple $1.00 coins, it'd be a lot easier.
SMEALLIESo the argument kind of cuts both ways. And inconvenience is an argument that people use. We've done a lot of polling on this. We did a poll in January, bipartisan polling firm. And they found that when people find out that they can save billions of dollars, it is clear-cut, two to one support in favor of the dollar coin. There are always going to be 20 percent people who will oppose it, no matter what. But a majority of the people, we think, are reasonable on this issue and would like to see it happen.
MUDDKojo, if I may add a...
MUDD...historical perspective to it. One of the things that has happened in other countries, such as the countries that Janie mentioned, the, you know, Great Britain, Canada, other countries that have gone through this change and the resistance was exactly the same as occurred in the U.S. There are a lot of people that will, just on the face of it, oppose change. In part, it's a historical reaction because people have always been conservative about their money. They don't like to see changes because money is worth something.
MUDDAnd they want to continue to believe it to be worth something and not changeable. Well, in the case of switching paper for the coinage, it's clear that the evidence shows that it is more expensive to keep paper money in circulation because it doesn't last as long, wears out quicker, all this kind of stuff.
MUDDThe U.S., the issue...
MUDD...is further complicated. Where it's complicated by the issue of, we have two separate entities within the treasury producing money. You have the mint producing coins and you have the BEP producing paper money.
NNAMDIBureau of Engraving and Printing, correct.
MUDDExactly. And just as siblings might fight, they fight over turf. You know, if the BEP is to continue producing paper money, that's a lot of jobs, a lot of influence and as the head of the BEP, you don't want to lose those jobs and you want to fight to keep your share of production of currency. That's the complication that doesn't exist in many of the other countries where the switch over was made many years ago.
NNAMDILater, we're going to get into the politics of it in Congress. But, first, Janie Lorber, in polls, Americans say they don't want the dollar coin instead of the bill, but does that change if they are informed that there is a significant savings in it?
LORBERWell, there's a certain debate about how much savings there actually is. The GAO report said that there was this $5.5 billion savings over 30 years. Well, it turns out, that first five years, and they say this in their report, is actually costs the government money than in the second five years which takes us up to 2020. If you start in 2000 -- if you start now or starting now, is -- that is, it's not until 2020 that you start to actually make a net gain. So the idea -- and a lot of people who are arguing against this say that, well, sure, if we would have done this 15 years ago, 10 years ago, we would already have started to start evening out and profiting on this.
LORBERBut the fact that we're staring it now, in 2011, where, you know, every week a new product comes out that allows you to bypass currency all together. For example, here in Washington, we use the smart trip card to get on the metro. And, you know, the number of online transactions increase every single day. So the fact that we're not using money, paper and coin currency, suggests that by the time we would have started to make a profit, the government would have started to profit in 10 years, perhaps we won't be using paper or coin currency at all.
SMEALLIEIf you look closely in that report, you will see that they actually provide a range of savings because they plugged in some assumptions that change from their last time. One is that the 40-month longevity of the bill, which we think it's not quite there yet, and also the replacement ratio, which they had two to one before, now it's 1.5 to one. If you go back to their traditional assumptions there, the savings over 10 years could be as high as $2 billion and a savings over 30 years is $30 billion.
SMEALLIEAnd the reason I've raised that is, is when Canada estimated, when they went -- they got rid of the loonie for the loonie coin, they estimated it was going to save about $150 million over 20 years. Within four years, they save three times that amount. So I think people got to understand that there is a larger potential savings out there.
NNAMDIWell, we're going to get into the politics of it now because joining us by telephone is Tom Davis. He's a former member of the U.S. House of Representatives from Virginia. He is now director of federal government affairs at Deloitte LLP and he's the President of the Republican Main Street Partnership. Well, he's also vice chairman of the Washington -- Metropolitan Washington Airports board. But who's counting? Congressman Davis, thank you so much for joining us.
MR. TOM DAVISKojo, how are you?
NNAMDII'm doing well. You introduced legislation back in 1995 called the Save the Green Back Act. It was never passed, but what did that bill propose?
DAVISWell, it didn't have to. You've got to remember that there was competing legislation on the part of (word?) to Congressman Colby who represented a lot of the copper, owners and copper miners that was basically going to move the dollar into coins. And this became a special interest food fight among members and so no news was good news for the paper act at that point. As a -- realistically, you had the paper and the ink people on one side versus your metals people on the other side.
NNAMDIAnd it still seems to be that way, in some respects. It's really something of an emotional issue for many people. The dollar is symbolic and, I guess, familiar.
DAVISWell, look, it's hard to change anything in Congress in this environment. You got split parties, number one. There are all kinds of different estimates over what yields you gain or not. But the public, at this point, hasn't weighed in. The treasury department, I think, would be very, very important to be able to pass anything. They'd have to come up with a, I think, a plan to make anything viable under these circumstances. Without that, it's just -- it's hard to change legislatively in this environment. It's just so polarized. And we see this in almost every aspect of legislation right now.
SMEALLIEIf I could add to that.
SMEALLIEYou know, it's exactly this environment, we think that we have a good chance. Because if you have a program that could save billions of dollars without cutting one program or raising one tax, we think the time is right now.
DAVISRight. But it comes to regional issues to some extent, too. As I said, you have interest groups start weighing in, members are just -- this is not an issue that there's a lot of political juice to it for the savings. Not to argue for or against either side of this, but I think without a push from treasury or the government, which is just, I think, probably unlikely in this environment, I think it's tough to make those kinds of changes.
DAVISAnd you never know, you never know. That's why people keep moving and then sometimes things surprise you, but it was hard to just get a continuing resolution through this year.
NNAMDIJanie Lorber, Congressman Davis, described the back and forth when he was in Congress having to do with what part of the country and individual represent. Has much changed since then?
LORBERWell, I think that, the one thing that gives Shawn and others on his side some hope, in addition to the discussion about reducing the federal deficit, is that some democrats -- now that the democrats aren't controlling house. Some key representatives who looked out for Crane don't have the clout that they used to, necessarily. So, for example, Barney Frank, who control was the gate keeper of which legislation made it to discussion in the financial services committee, he's not quite in the same position as he was before.
NNAMDIAnd Crane is based in Massachusetts.
LORBERExcuse me, yes. Crane is based in Dalton, Massachusetts. And since we don't have Mr. Hopkins here anymore, one thing that is probably worth noting is that they will lose about 200 jobs if they stop printing the dollar bill. And the dollar bill, I believe, amounts to about half of their currency production. So it's a colossal and in Dalton, Mass. is a very small town where 200 jobs is a lot. And so there's -- passions are high there. But they're not really waging a massive lobbying campaign whereas Shawn and his group is.
LORBERSo one thing we don't see are those democrats having the power that they did at one time to keep legislation...
NNAMDIThat much has changed, Tom Davis.
DAVISThat's well -- I mean, producers are out in Northern Virginia. I mean, you can argue this back and forth. And the other thing I'm going to put on top is the discussion is now about the penny. Have you been following those?
DAVISAnd the pressure that puts on. But this becomes a special interest food fight, you know, at the end of the day. And I just think, given the environment we're in, unless the treasury and the administration were to say something, I don't think congress is likely to give administration something that they don't embrace.
LORBERAnd one other thing is that when lawmakers have constituents contacting them, you know, yelling about all sorts of things, this just adds one more thing that they have to call and complain about. And lawmakers are already struggling with approval ratings at this point.
NNAMDIWe would have to see where they prioritize it. Tom Davis, thank you so much for joining us.
NNAMDITom Davis is a former member of the U.S. house of representatives from Virginia. He's now director of the federal government affairs at Deloitte LLP and President of the Republican Main Street Partnership. Let's see what our listeners are saying on this issue. We go to Steven in DuPont Circle. Steven, you're on the air. Go ahead, please.
STEVENHi, Kojo. Thank you for having me on the show. My question is, really, you know, instead of getting rid of the dollar bill which is contentious, I mean, things still cost a $1. Why not get rid of other currencies like a penny or a nickel? Where nothing costs a penny and nothing costs a nickel anymore.
NNAMDIDoug Mudd, there has been talk for years, in some quarters, about getting rid of the penny, is there not?
MUDDAbsolutely. Part of the problem being that the cent, depending on the spot value of copper, actually costs more to produce than one cent. So obviously it doesn’t make any sense to produce them. And as, you know, inflation has affected our currency over time, it's become less and less clear why we need a cent coin. And so there is strong practical arguments in favor of getting rid of the cent coin and just reevaluating all prices by rounding up or down or whatever.
MUDDAnd it's a precedent that, you know, we don't have a half cent coin anymore. And we discontinued that 1857 for many of the same reasons. There was no need for it anymore in daily usage.
NNAMDIQuite a few callers don't have a cent coin anymore, Shawn Smeallie. What's the argument that's being made in favor of retaining the cent or penny coin?
SMEALLIEWell, we are the dollar coin alliance, so we're not really fighting that battle. But I will say that the logic of that still applies to the dollar coin in a sense that, you know, there's nothing that costs, you know -- well, you go to a vending machine, now. Everything costs a $1.50 or $2. And so, you know, you're putting those dollar bills in there, they're getting jammed, it costs small businesses, you know, millions of dollars every year to fix those. And that's why we have a number of small business organizations as part of our group.
NNAMDIJanie Lorber, is there any momentum in Congress right now for getting rid of the penny?
LORBERWell, one thing that's actually kind of curious is that, in 2006 when Jim Colby, republican from Arizona -- and this had been one of the issues he pushed numerous times throughout -- since the '80s, really, getting rid of the dollar bill. But in 2006, he thought, ah, I have a way to get this to pass. I'm going to also propose the abolition of the penny along with the subbing out of the dollar bill. So he actually thought that the penny idea would help him get his dollar coin idea on the radar.
LORBERBecause the public is, as our caller suggests, seems more interested in doing away with the penny than perhaps going to these heavier dollar coins. The sweetener didn't work.
NNAMDIOn to Craig in Glendale, Md. Hi, Craig.
CRAIGHi, I spent two semesters abroad, in Italy and in Oxford. It was just so much more useful to have two year coins or a one year coin than, you know, here in an American where you have a dollar bill. And it's just my opinion but, I thought it was so much more useful and I would be happy to see the American dollar coin come into more of a practice here. Thank you.
NNAMDIAre you in favor of the one over the other or would you like us to continue having access to both?
CRAIGI would much rather have the coin, I think, but...
CRAIG...now that I've heard the argument for the savings, I mean, that also comes into play. So, yeah.
NNAMDIWell, Craig votes for the coin.
LORBEROne thing to note, I think, Kojo, is that...
LORBER...it's pretty much impossible and every -- on all sides of the issues, they say, to get the public to take to the coin when you still have the dollar bill in play -- and so you -- and officials at the Fed and the Treasury have said this, if you want to do the coin, you have got to get rid of the bill.
SMEALLIEAnd I think it also shows that the -- when Canada went to the coin, within a couple years they went back to tests to see if people -- whether they thought it was popular, and this a point that Doug raised, is that people stop their opposition. And I think if you just do it for awhile then it's not that big of a deal.
CRAIGYeah. The polling has showed consistently that despite large opposition to the change over, once it was accomplished, within a very short time -- within two years, people not only were resigned to it, they were in favor of the change, and it's just be consistent across the board in Great Britain, Canada, Australia, you know. This is not something that's unique to the United States, and I think the results would be the same here.
NNAMDII guess our next conversation will be on meter system, but right now we're talking about the dollar bill versus the dollar coin. We're gonna take a short break, but if you've called stay on the line. We'll try to get to your call as quickly as possible. It the lines are busy, go to our website kojoshow.org, join the conversation there. State your preference and why. Since it costs more to make a penny than it's actually worth, do you think the penny is also past its prime? 800-433-8850. I'm Kojo Nnamdi.
NNAMDIWelcome back to our conversation about the dollar bill versus the dollar coin. We're talking with Janie Lorber. She's a reporter with CQ Roll Call. Shawn Smeallie is a spokesperson for the dollar coin alliance, which is a lobbying group representing organizations that would like to replace the dollar bill with the dollar coin. And Doug Mudd is the curator of the Edward C. Rochette Money Museum of the American Numismatic Association. And your calls 800-433-8850.
NNAMDIWe've been talking about the chances on Capitol Hill in Congress. Shawn Smeallie, what have you been hearing from the people you've been talking to on the Hill?
SMEALLIEWell, we've been meeting with a lot of folks. We had a great victory. We had the Republican Study Committee, which was the more conservative groups in the House include it in their budget proposal. That budget did not pass, but there's 178 people in that study committee. So it does show a lot of supports and legs for it. We are fairly close to finding a co-sponsor for a bill, and we hope to have something by June.
NNAMDIBack to the telephones then. Here is Barry is Ashburn, Va. Barry, your turn.
BARRYYeah, hi. I just want to get back to that issue of the value of the money and the coins and everything. I'm 74 years old. During my lifetime, the value of a dollar today is what a dime was at an earlier time in my life. When a dollar was, you know, when we had the dime, we had -- below that we had the nickel and the penny. That was the only other coins at that time. So if we were to take the dollar and say okay, let's rename the dime a dollar, you know, we would carry those coins in our pocket with no problem at all.
BARRYThis, you know, the fact that the public is unwilling to make these changes is just -- it doesn't -- it's a matter of taste, not logic. We, you know, the statement was made that the amount of copper in the penny costs two cents. That's not so. There's no more copper in pennies. Copper began too expensive for pennies. Copper was -- the penny is now made with other metals, and these other metals are now costing two cents to make each penny.
BARRYIf we were to take -- if we go back to the gold and silver standards, and printed our -- rather minted a five dollar gold piece, it'd probably be too small for people to pick up. The same thing with the silver dollar. If you made it actually out of silver, you'd never see it. And we just need to go back and think about what we really mean by our money, and what it's worth and get off of this nonsense that we're on.
BARRYOne of the arguments that people have made about the penny is that, oh, if we get rid of the penny, the prices are gonna go up because people will round up to the next nickel. Yeah. But -- so you're going from 1.99 to $2.00. I mean that means nothing in terms of actual value of the money.
NNAMDIWhen in fact the 1.99 in the first place was intended to make you think that it was not as much as 2.00. But that's another story. (laugh)
NNAMDIHere is Marilyn in Northwest Washington. Marilyn, you're on the air. Go ahead, please.
MARILYNHi. I have a number of points about this. First of all, I don't think abolishing the penny would be a bad idea at all. But I'm blind, and we all remember the Susan B. Anthony dollar which blind people could not tell from quarters. And I'm wondering what ever happened to the half-dollar coin, 50 cent coin? What is the last time I had one in my wallet, I couldn't tell you. And...
NNAMDIWell, let me stay with the part of your argument about the dollar coin versus the dollar bill for someone who is blind. Right now, how do you identify a dollar bill, Marilyn?
MARILYNYou fold -- right now -- well, there are two things. Right now you identify them by folding them and keeping them in a certain order in your wallet, or using a wallet that has multiple compartments so you can put different bills in it. I mean, different people use different systems.
NNAMDIWell, let me ask Shawn Smeallie how the dollar coin today would not be confused with the quarter by people who are blind.
SMEALLIEWell, the dollar coin now, and it's not the Susan B. Anthony, but the dollar coin, the Sacajawea in the presidential series, are definitely thicker and bigger than the quarter. So there will be no -- it would be hard to confuse them.
MARILYNIt would be hard to confuse them. It sure wasn't hard to confuse Susan B. Anthony.
SMEALLIEWell, I have to agree with you there.
MARILYNNow, the other thing, I'm sorry -- of course there was a lawsuit a number of years ago, and the Treasury -- Department of Treasury is currently working on how to make paper currency more easily identifiable by blind people. They're doing research of terms of getting ready to comply with the court order ruling in favor of the American Council of the Blind who sued them about this. And I'm sorry the guy who manufactures the paper is not there because one of the issues of some of us have been concerned about is whatever (word?) system they put into effect, how long is it going to hold up?
MARILYNI mean, are we gonna have something there that we can't feel...
MARILYN….and still can't tell the dollar apart?
NNAMDIThank you for...
MUDDThat's been discussed quite a bit.
NNAMDIDoug, go ahead, please.
MUDDThat's been discussed quite a bit. In Europe, Switzerland for example, uses Braille and different size notes, as does the Euro, the paper money. And they're actually -- they're different sizes for the different denominations. That helps with identification if you're blind. And Switzerland does use some Braille identifications for the denominations. Now, in their case, they're using the polymer notes. One of the things we haven't discussed is another material for paper money which is a polymer, a plastic type of material.
NNAMDIThat's what Canada is working on, and that's the -- what Peter Hopkins didn't want to comment on.
MARILYNThis is, you know, it's very interesting, because the United States is in the very, very small minority, especially of modern, you know, Western countries, that does not have identifiable currency. In most countries you can tell the money apart. Just come to the United States, that's where you can't.
NNAMDI(laugh) Go head, Doug.
MUDDIt's a part historical issue, and it's partly a traditional issue in that the U.S. Dollar has been the currency of the world for such a long time, since the -- since after World War I, and as a currency, world currency, many if not most of our users, especially for $100 bills for example, are foreigners. And in order for them to be able to identify the notes and be comfortable with them, especially in cases where they can't read English and aren't as familiar with American currency, there is a perceived need to keep things the same to make very small changes so that you don't upset the apple cart as for the economy and the usage of the dollar as a primary currency.
NNAMDIWe got an e-mail from Cassandra who says, "Australia and New Zealand use polymer notes. They last four times as long as paper notes and are almost impossible to tear, and survive going through laundry." Marilyn, in the final analysis, if there was a dollar coin that was not confusable if you will, with any other coin, and you had to choose between that and the dollar bill as it currently exists, which would you choose?
MARILYNWell, I don't know. If it was not possible to confuse it with quarters, maybe I be willing to consider the dollar coin.
NNAMDIOkay. Thank you very much for your call, Marilyn. We got an e-mail from Sarah in Foggy Bottom who says, "We've had dollar coins and no one liked them. If they were as desirable as the proponents claim, wouldn't everybody be clamoring for Susan B. Anthony dollar coins now?" And then we got this from John in Alexandria. "Just phase out the bill and use the coin. People will always choose the familiar over the new even if it makes no sense. But people's feeling should come into play here at all. It's a matter of cost and practicality. A dollar will still be a dollar and coins are simply the best way to go by all objective measures." So you can see, not everybody disagrees. Shawn Smeallie.
SMEALLIEKojo, it was funny, I was flying home one time, and I asked the people next to me what'd they think. And I always get the response, oh, yeah, why do you this? And I tell them about the budget saving and then they always come around. One guy said, oh, yeah, I support that. And he said, this is just like switching to digital TV. A lot of hot air, but it's really nothing in the end. And I thought he's probably right.
NNAMDIAnd, on therefore to David in Arlington, Va. David, you're on the air. Go ahead, please.
DAVIDHi Kojo. I actually wanted to make a point that I haven't heard yet. We are talking between switching between paper currency and a coin, something that's been used for thousands of years. Why not take this opportunity, since we already to wage a battle for change, to go towards and future and get ahead of the curve towards digital money, and use the -- rather than just dollar coins, use that as an experiment for digitizing our currency since that's what we're doing clearly by all trends anyway.
NNAMDIWell, you might be looking a bit far down the road, Janie Lorber. If people are not ready to switch from the bill to the coin, the notion of digitizing our currency, has that been raised anywhere in any legislative counsel as far as you know?
LORBERTo my knowledge, no, it hasn't. But that argument is what people are using to say, look we don't have the inertia to go ahead and do this now. Why?
NNAMDIThank you very much for your call. Onto...
MUDDOur coin -- if I may...
MUDDYou know, our money is effectively digitized already through credit cards and electronic bank transactions. The thing is, in the end, for the foreseeable future, people will need to have change in the form of paper money or coinage simply to make those minor transactions at a flea market, at small venues, in situations where it's not practical to have an electronic format. Plus, there's always the issue of wanting a certain amount of privacy in your dealings for whatever reason. People don't necessarily want to be tracked by being -- by spending money, in electronic format.
NNAMDIAnd David, thank you very much for your call. This e-mail we got from Katherine in Toronto. "I live in Canada. We have a dollar and an even larger two-dollar coin. It's not that big of a deal. Anyone thinking that you wouldn't use coins is silly. It's still money. I think a fear of change is the center of this issue." And this e-mail we got from Jonathan in Washington D.C. "Waiters, bartenders, and cab drivers and other, with the exception of strippers will not be in favor of losing paper dollars, but aren't we increasingly shifting to electronic forms of currency? Dollars are dirty, debit and credit, and the mobile phone take up less room." So we've heard that part of it.
NNAMDIHere now is Josh in Adams Morgan in Washington. Hi, Josh.
JOSHHey, Kojo. I'm calling to echo something one of your earlier callers said. I lived in Europe, and it sure was nice that when you were having your daily transactions, you're buying a sandwich or a coffee, not to have to dig out your wallet. You just go in your pocket, and if you're wallet's coming out, you know something serious is going on.
NNAMDIIt's a big purchase if your wallet is coming out.
JOSHExactly. And just while I was waiting, I was at a coffee bar. I was trying to do a transaction to buy a coffee, and I had to do it with one hand, take my wallet out, pull out two or three singles, and then while I was getting my sugar for my coffee, I found a penny on the floor someone had not bothered to pick up, because it's not worth anything anymore. (laugh)
NNAMDISpeaking of that, and thank you for your call, Josh. Doug, Shawn, Janie, in some ways like the penny, we're really talking about inflation. A penny once bought something, and the dollar of course was worth a lot more a century or even 50 years ago. Doug, some people can even see a $5 coin in the future.
MUDDYes. It makes economic sense, not necessarily right now. None of the other countries we've mentioned that have converted from the dollar and actually introduced $2 coins, things like that, have gone to $5 coins yet. But it's a matter of inflation and convenience. There will be a time where the one and $2 coins become nothing more than say a dime now where you can't use it to buy anything on its own. It's simply a matter of making change because of the way our prices are structured at 1.99, and you know, the cent coin is the same thing.
MUDDSo for practical reasons it may not be time now, but there's a time it's foreseeable that that will happen within the next 10 to 20 years.
NNAMDIYou could see that foreseeable in the future, Shawn?
SMEALLIEPerhaps. But I was actually just gonna make one more comment...
SMEALLIE...that we hadn't really raised, and that is the environment impact. The dollar bills, over three billion are destroyed every year and put into landfills. And that's 7600 tons of paper that's destroyed each year and put in landfills, which is about 2,000 dump trucks. And I think that's an aspect that we need to explore as well. But dollar coins, they last 30 years, and they're recyclable. So that -- that is an environmental impact I think people should be aware of.
NNAMDISpeaking of which, Doug, what would have to happen to replace the bill with the coin logistically?
MUDDWell, logistically you'd have to basically t ell, you know, bet the BEP to -- the Bureau of Engraving and Printing which prints our paper money to stop printing those notes. The problem for them is that the printing of dollar bills constitutes somewhere in the 30 to 40 percent range of their production.
NNAMDIWhat would happen to the billions of dollar bills that are now outside the United States?
MUDDWell, they're -- most of the dollar bills are actually concentrated in the United States.
MUDDBut even the ones that are outside of the United States, what would happen is we wouldn't have to change legislation or rules on usage. They would just wear out over time.
NNAMDII'm afraid that's all the time we have. Doug Mudd is curator of the Edward C. Rochette Money Museum of the American Numismatic Association. Shawn Smeallie is a spokesperson for the Dollar Coin Alliance, and Janie Lorber is a reporter with CQ Roll Call. Thank you all for joining us, and thank you all for listening. I'm Kojo Nnamdi.
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