[Congressional Record Volume 146, Number 12 (Thursday, February 10, 2000)]
[Senate]
[Pages S599-S600]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                     DISTRIBUTING NEW MONEY FAIRLY

  Mr. MURKOWSKI. Mr. President, as a former banker, I must draw 
attention to what I consider an extraordinary movement by this 
administration, the Department of Treasury's decision to distribute the 
U.S. $1 coin to America's largest retailer, Wal-Mart, in Arkansas.
  Isn't that extraordinary? The banks have always been the agency for 
distributing new money and the agency for bringing in mutilated money. 
But for the first time the Department of Treasury has gone to a 
retailer, Wal-Mart, headquartered in President Clinton's home State, I 
might add, and I am told that as a promotion they have cut a deal with 
General Mills, where there are a few of them in boxes of Cheerios.
  The banks are the backbone of our financial system. I cannot 
understand the logic or the fairness where if you are a banking 
customer, and your customers want coins, you have to run down to Wal-
Mart. A private citizen who orders those new coins from the U.S. Mint I 
am told can expect a 6 to 8 week delivery time.
  I would like to ask the following questions. Who made the decision to 
give these companies, Wal-Mart particularly, the ability to distribute 
coins before the banks? I would like to know the name of the person who 
made that judgment; and what part of Arkansas he was from? Was it a 
procedure similar to awarding Federal contracts used in choosing Wal-
Mart and General Mills? I have sent that letter to Lawrence Summers, 
and I hope we can get a response very soon.
  I yield the floor and encourage everybody who has a box of Cheerios 
to be sure and shake it because there might be a new dollar in it. 
Don't go to your bank because they will not have it.
  I ask unanimous consent that my letter, and an article that appeared 
in the Wall Street Journal, be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

     Hon. Lawrence Summers,
     Secretary, Department of the Treasury, Washington, DC.
       Dear Secretary Summers: I am surprised and very concerned 
     about the method the Department of the Treasury has chosen to 
     distribute the U.S. Mint's new one dollar coin. America's 
     largest retailer, Wal-Mart, headquartered in President 
     Clinton's home state, has been given priority over our 
     nation's banks to distribute these coins. I find it hard to 
     believe that any federal agency would deliberately give such 
     a marketing advantage to a private retailer, let alone the 
     largest retailer in America. Select boxes of General Mills' 
     Cheerios contain the new dollar coins.
       According to an article in today's Wall Street Journal, 
     banks, which are the backbone of our financial system do not 
     have this type of ready access to these new coins. Some 
     bankers were quoted as saying they are referring people who 
     want the new coins to Wal-Mart. Moreover, a private citizen 
     who orders these new coins from the U.S. Mint can expect a 6-
     8 week delivery time.
       I would like you to answer the following questions. Who 
     made the decision to give these companies the ability to 
     distribute the coins before banks? Was a procedure similar to 
     the awarding of federal contracts used in choosing Wal-Mart 
     and General Mills?
       I look forward to your prompt response.
           Sincerely,
                                               Frank H. Murkowski,
     U.S. Senate.
                                  ____


               Bankers Assail Mint for Deal With Wal-Mart

                           (By Julia Angwin)

       Bank tellers at First State Bank in Middlebury, Ind., have 
     recently been going to unusual lengths to fill their coin 
     drawers. While on lunch break, they would sprint to the local 
     Wal-Mart store to buy the government's newly minted $1 coin.
       ``We thought if we could get 50 or 100 coins, then maybe we 
     could give them to our customers,'' says Sara Baker, the bank 
     officer that organized the tellers.
       When a bank goes to Wal-Mart to get its money, something 
     odd is going on. In this case, it's a new strategy the U.S. 
     Mint adopted when it issued the new golden-colored dollar, 
     featuring the image of Native American heroine Sacagawea, at 
     the end of January. Prompted by the flop of the Susan B. 
     Anthony coin 20 years ago, the Mint crafted an agreement with 
     Wal-Mart, the nation's largest retailer, allowing it to 
     essentially have first dibs over most banks on the new coin.
       The U.S. Mint says it shipped the coins to 3,000 Wal-Mart 
     and Sam's Club stores and the 12 regional Federal Reserve 
     Banks on the same day, Jan. 27. But it mailed the coins to 
     Wal-Mart, while it sent the coins to the Fed branches by 
     truck. Many community banks are reporting a five-week wait 
     for the coins that they have ordered from the Federal 
     Reserve.
       The delay has caused a furor among some bankers, who are 
     embarrassed that they have to send coin-seeking customers to 
     Wal-Mart, and among some business owners, who complain they 
     can't get the coins from banks.
       ``Wal-Mart doesn't need any more advantages over a little 
     business like mine,'' said Bill Taylor, owner of Boiling 
     Springs Hardware & Rental in South Carolina, who tried 
     unsuccessfully to get some dollar coins from his local banks.
       * * * off an angry letter to the U.S. Mint on behalf of its 
     members, protesting the agreement with Wal-Mart and asking 
     the Mint to speed delivery to community banks of the golden 
     coins. Dubbed the Golden Dollar by the Mint, the new coin is 
     actually made of an alloy of manganese, brass and copper.
       ``The U.S. Mint has done an end run around the whole 
     banking system,'' says Ann McKenna, vice president for 
     finance at Tioga State Bank in Spencer, N.Y. ``It's very 
     disappointing.''
       In fact, the Mint planned the Wal-Mart agreement as a way 
     of encouraging U.S. banks to order the new golden dollar coin 
     in larger numbers than their orders for the Susan B. Anthony. 
     And it has worked. The demand for the new coin has reached 
     200 million in the first month. It took the Susan B. Anthony 
     four years to reach that level.

[[Page S600]]

       U.S. Mint Director Philip Diehl says he doesn't mind the 
     controversy as long as the coin is a success. ``I'd rather 
     have a noisy success than a quiet failure,'' he says.
       Mr. Diehl says the U.S. Mint got a lukewarm response from 
     most banks when it first approached them about potential 
     demand for the coin last summer. In response, he says, the 
     Mint decided to talk to some retailers about putting the coin 
     into circulation. Only two retailers showed interest: Wal-
     Mart Stores Inc., of Bentonville, Ark., and 7-Eleven Inc., of 
     Dallas. At the same time, the Mint also crafted an agreement 
     with General Mills Inc. to distribute the coin in selected 
     Cheerios boxes--11 million in all--beginning last month.
       Because of the logistical difficulties of distributing 
     coins to its stores, 7-Eleven dropped out of the agreement, 
     says Dana Manley, marketing communications manager for the 
     convenience-store chain. However, Wal-Mart was willing to buy 
     100 million coins and promote them nationally in its stores.
       Wal-Mart spokeswoman Laura Pope says the company was 
     excited to work with the Mint. ``Our goal is to offer 
     customers something unique that they can only find at Wal-
     Mart and Sam's Club stores,'' she says. Wal-Mart promoted the 
     new coin in a mailing distributed to 90 million customers at 
     the end of January.
       The Mint's Wal-Mart strategy seems to have worked, helped 
     by the coin's golden color, to make the new dollar more 
     popular than its Anthony predecessor. Most banks in search of 
     the coin have started referring their customers to Wal-Mart. 
     Even Ms. Baker eventually gave up on her quest to buy coins 
     from the local Wal-Mart for her bank branch.
       After two days of buying a few coins at a time (each Wal-
     Mart has its own policy of how many coins it will give out at 
     one time), her tellers rebelled. ``Some employees went out 
     and said, `I could only get three coins and I'm keeping 
     them,' '' she says. ``Frankly, now we're telling customers to 
     go to Wal-Mart.''

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