[Congressional Record (Bound Edition), Volume 157 (2011), Part 12]
[Senate]
[Page 16582]
[From the U.S. Government Publishing Office, www.gpo.gov]




                             PENNY FOOLISH

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                         HON. STEVEN R. ROTHMAN

                             of new jersey

                    in the house of representatives

                      Wednesday, November 2, 2011

  Mr. ROTHMAN of New Jersey. Mr. Speaker, I rise today to talk about 
common cents.
  Currently it costs more than a penny for the U.S. Mint to make a one 
cent coin and more than a nickel to make the five cent piece. This 
problem is currently being examined at the request of the U.S. Mint.
  Over the next two years, a Pennsylvania company has been contracted 
by the Mint to conduct research and development for more economical 
alternative metallic materials for the production of all circulating 
coins.
  As this study begins, I would like to submit into the Record one 
possible solution, offered by David L. Ganz, a friend of mine, a member 
of the Board of Freeholders of Bergen County, N.J., and a former 
president of the American Numismatic Association.
  In an op-ed in the Sunday New York Times from August 21, 2011, Mr. 
Ganz took on the issue of the penny and proposes a specific solution, 
which I hope that the study will review along with other alternatives.

                  [From New York Times, Aug. 20, 2011]

                             Penny Foolish

                           (By David L. Ganz)

       In this time of fiscal strain, Americans can find some 
     savings by simply looking in their purses and pockets.
       Because of increases in commodity prices, it now costs more 
     than one cent to make a penny and more than five cents to 
     make a nickel. The United States Mint, sensitive to the risks 
     of changing the composition and feel of our coinage, has been 
     reluctant to revise the composition of these two coins.
       But that is precisely what the Mint--which last year 
     produced 4 billion pennies and 490 million nickels--should 
     do.
       While eliminating the penny has been debated for decades, 
     it is not a realistic option; the penny has tremendous 
     symbolic value and removing it would have the effect of 
     raising prices--particularly for people of modest means, who 
     use currency the most--because retailers would round up. 
     Reducing the size of the coins is impractical because of the 
     cost of recalibrating vending machines and the need to ensure 
     that the coin is not interchangeable with any foreign coin.
       Changing the composition of the penny by using less costly 
     materials is the only feasible alternative. The Mint, part of 
     the Treasury Department, has changed the size or composition 
     of the cent more than a dozen times since 1793. Two of the 
     most recent alterations were the switch to zinc-coated steel 
     in 1943, caused by the wartime shortage of copper, and the 
     switch to zinc with copper plating in 1982, a response to 
     rising commodity prices.
       Past debates have brought forth a variety of unconventional 
     suggestions: plastic (used as sales-tax tokens--representing 
     fractions of a cent--in the 1930s, but cheap-looking), 
     industrial porcelain (Germany and Thailand tried this, but it 
     breaks easily); and vulcanite rubber (used as currency in 
     Guatemala early in the last century, but too exotic for 
     American tastes).
       Metallic alloys are probably the best choice for a new-
     composition penny and nickel. The precise choice needs to 
     reflect four values: cost effectiveness, security of supply, 
     aesthetic acceptability and minimal disruption to vending 
     machines. (Pennies are not commonly accepted by machines, but 
     are sometimes inserted anyway; a penny of a different 
     composition could cause machines to jam.)
       In a 1976 study of the penny, the Research Triangle 
     Institute rejected chromium, tin, titanium, copper-aluminum-
     nickel-zinc derivatives and zinc mixtures. At current prices, 
     none of these would be cost-effective. In practical terms, 
     that leaves two basic metallic groups: an aluminum alloy, 
     which is better, heavier and stronger than the pure aluminum 
     cent proposed in the 1970s, but still expensive, and steel, 
     which is the clear favorite for affordability and security, 
     but poses technical challenges.
       The best approach is to meld the two. Aluminized steel is 
     ideal because it is available coiled--squeezed by rollers and 
     then put into a lasso-like form that can be fed directly into 
     a coining press. It would work for the penny and the nickel--
     and the dime, if it is ever threatened.
       Let's use a new aluminized-steel alloy that allows the Mint 
     to produce an affordable penny. Ideally, this would be 
     accompanied by a redesign, and a collector's-edition one-cent 
     coin made of gold and silver. This would complement the 
     success the Mint has had with the state quarters program and 
     with collectors' coins made of precious metals.
       Contrary to the song, pennies do not come from heaven. Ours 
     come from the Mint, which must supply them now and in the 
     future. Let's reintroduce the penny as a coin that matters, 
     and put its production on a sounder financial footing.

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