[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.
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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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