For more than ten years I have studied monetary systems of the world with the question in mind “What will American coins be like in the future?” I brought to this project seven decades of coin collecting experience (since I started collecting Lincoln cents as a nine-year-old in 1939). In seventy-plus years I was exposed to just about every kind of coin and items used as money in the history of mankind.
I looked for trends in coins of the world, both technical specifications plus how coins were “used.” I tried to project how these trends would continue to develop in the future; to apply common sense, some far-reaching insight, and my numismatic knowledge to project the possible characteristics of United States coins in, say, ten, twenty, or more years in the future. Or, possibly, what they should be. I had to project like a futurist, think like a mint official, but write like a numismatist.
In my research early on I discovered the writings of Francois R. Velde who had studied the major thrust of the same problem – at least that of the most pressing current problem – the composition and need for low denomination coins. As chief economist of the Chicago Federal Reserve Bank Velde publish two economic reports and a 2002 book on this subject, The Big Problem of Small Change, the later with co-author Thomas J. Sargent.
Velde offered a brilliant solution to the problem facing Treasury officials at present: cents and nickels currently cost more to manufacture than their face value. (Last year that cost was $42 million, this year appears to exceed $100 million.) His recommendation: revalue (his term was “rebase”) all existing cent coins to five cents, and round off all transaction amounts to a multiple of five cents.
Before I encountered Velde’s Plan, I had come to a similar conclusion, but mine was even more dramatic: revalue both cents and nickels to ten cents, and round off all transaction amounts to a multiple of ten cents.
The brilliance of the Velde Plan was that all coins in circulation stay in circulation – no need for either scrapping billions of coins or a tremendous urgent need for new coins – no need for any recoinage. Granted, there would be windfall gains across America, from families with “penny jars” to retail establishments who stock large amounts of small denominations to make change for retail sales.
Velde’s brilliant plan was published by the Chicago Federal Reserve Bank in one of those economic reports. But it has fallen on deaf ears in Washington, now for nearly a decade, as the problem worsens.
As a result of my analysis I wrote a 42-page report which covered the technical specifications of future coins, a timeline for introducing new coins, what mints should strike what coins, suggested designs, and innovative characteristics for all new coins.
I even mentioned how to improve conditions in the engraving department at the Philadelphia Mint including its management, since this was a problem area with the vast number of new coin designs for statehood quarters, presidential dollars (and more recently, the National Parks series), all requiring new coin designs at an accelerated pace.
Also, I even went so far to suggest how coins should be “packaged” at the mint, plus how cash registers of the future would be reconfigured. My ideas are to examine the entire structure of U.S. coins, their use in the future and establish an intelligent plan.
My attempt to get that report published failed. One editor gave me the facts of life: send it to the Congressional Committee on Coinage! (Or, perhaps, to the Treasury. But that was no guarantee it would even be read. Congress likes to put out little fires, like keeping the cent and striking it in an even lower-cost base metal. The Treasury would rather contract with an expensive consulting firm for a multi-million dollar research study. Who would even listen to a guy in Connecticut who recommends revamping the entire U.S. coin structure, offered up a plan without costing the government a cent?)
However, I would like to summarize the content of that report in this article.
Here are some facts as I approached the problem:
- Any changes in coin characteristics have not been based on intelligent thinking in the past, but rather on political decisions.
- The use of coins for large purchases has declined; coins are most useful for small cash purchases.
- The use of coins in vending machines — and the importance of the vending machine industry in general — has exerted great influence on coin characteristics.
- As more money is transferred by paper, plastic and wire service, the demise of coins entirely has been prophesied, but despite all these projections, coins remain entrenched for use in circulation well into the future.
- Precious metals have been eliminated from current coins, as all circulating coins are now, in effect, tokens struck in base metals.
- Even base metal costs rise and fall creating inconsistencies, as the cost of a coin, including the cost of the metal and manufacture costs, often exceeds the face value of low denomination coins.
- The number of denominations in circulation is ideally five or six in number, but any more than that must be higher denominations, not low value coins.
|What Future Coin Diameters?|
|Present Size||Future Size|
|Half Dollar||1.205-inch (30.61mm)||20mm|
|One Dollar||1.043-inch (26.49mm)||26.5mm|
|Comments: The cent and the dime nearly the same size, and the nickel larger than the dime – and now the dollar coin smaller than the half dollar — will all be eliminated by a plan to have each denomination larger than those of smaller value. It was learned that coins of 5 millimeter difference in size can easily be differentiated by blind persons, or in the dark, without physical inspection.The dollar coin can remain its existing size. All others will be five millimeter increments different.|
|What Future Coin Compositions?|
|Present Composition||Future Composition|
|Cent||2.5% copper coated zinc||—|
|Nickel||25 nickel, 75 copper||—|
|Dime||8.33 nickel, 91.67 copper||ceramic coated aluminum (on one side)|
|Quarter||8.33 nickel, 91.67 copper||—|
|Half Dollar||8.33 nickel, 91.67 copper||bronze coated zinc|
|One Dollar||88.5 copper, 6 zinc,
3.5 manganese, 2 nickel
|88.5 copper, 6 zinc,
3.5 manganese, 2 nickel
|Five Dollar||8.33 nickel, 91.67 copper|
|Ten Dollar||silver clad copper nickel|
|Twenty Dollar||90 silver, 10 copper|
|Comments: The dimes would be a new size and composition; it would be struck in aluminum with one side blank which would be coated with ceramic and imprinted in color. Suggested design would be the fifty states. The technology for this exists in the button industry but would be modified slightly for high speed manufacturing by a new mint.Half dollars would made from a bronze composition made from processed cent metal to be coated on a zinc core.
In effect cents would be recoined, melted and bonded to zinc by the present two firms that presently supply cent blanks to the Mint.One dollar coins remain the same size and composition as present. This would enable the many millions of these in storage to be released into circulation.Five dollar coins would be recoined from existing dime, quarter and half dollar compositions. Ten dollar coins would use this same composition as the core, but would be clad with silver.Twenty dollar coins – intended for the future when needed – would be struck in coin silver.
|What Future Coin Appearances?|
|Present Color||Future Color|
|Cent||copper red or brown||—|
|Dime||light gray||gray one side, color one side|
|Half Dollar||light gray||bronze brown|
|One Dollar||brassy yellow||brassy yellow|
|Five Dollar||light gray|
|Ten Dollar||silver gray|
|Twenty Dollar||silver gray|
|Comments: This plan calls for each denomination to have its own color. Thus three denominations (dime, quarter, half) all the same color is eliminated.|
|What Future Coin Portraits?|
|Present Portrait||Future Portraits|
|Dime||Franklin Roosevelt||Fifty States|
|Half Dollar||John Kennedy|
|One Dollar||S.B. Anthony, Sacagawea , George Washington, US Presidents|
|Five Dollar||Abraham Lincoln|
|Ten Dollar||Alexander Hamilton|
|Twenty Dollar||Andrew Jackson|
|Comments: If the future portraits sound familiar they are the portraits on our present currency. The greatest conflict over future coins will be the person portrayed on the coins. To prevent this, place the same portraits on the coins as on the paper money. End discussion.Placing a woman in 1979, and then a native American in 2000 on the dollar was caving to political correctness. These were not readily accepted by the American public and millions of these dollar coins are in storage. By the present plan they could be placed in circulation.|
|Future Security Devices|
|Dime||One side coated with ceramic, imprinted in color.|
|Half Dollar||Plain edge|
|One Dollar||Reeded edge|
|Five Dollar||Security edge: alternating reeds and blank areas|
|Ten Dollar||Embedded microchip|
|Twenty Dollar||Embedded microchip|
|Comments: The use of an embedded microchip in a coin can be of tremendous advantage. For example the monetary value of this coin can be turned “on and off.” It could be struck in advance and stored in the off position. When needed, it would be monetized – turned on – then released to banks for circulation at its face denomination. This would eliminate any coin shortage in the future (and could level out any peaks and valleys of demand by commerce for a more efficient circulation of these coins and stabilize their production at the mint). It could also be selectively turned off, say, if a large number of coins were stolen or captured in a war.The embedded microchip could also have a serial number (like the serial number on paper money) and be used for similar reasons and circumstances, perhaps even tracking the circulation of that specific coin (by microchip readers in banks and other institutions). The number of transactions each coin performs might be useful information of the future (and prove the intelligence of using longer-life coins over shorter-life paper money).|
This article only hits the high points of my 42-page Future Coin Report, concentrating on the characteristics of the coins. How these coins can be created is the subject of much of the remainder of that Report.
But you might ask: What does a medal person, and perhaps a medal firm, have to do with coins of the future?
The technology is the same for both products but I have learned from history that new technology developed for one can most certainly be applied to the other. And most often that new technology first appeared on medals, before it was applied to coins.
The first proof surface appeared on a medal, the first clad metal, the first colorized item — and in modern times the first multi-ring blank, and hologram, all appeared on medals first! Can we embed a microchip in a medal before this technology can be applied to coins in quantity?
It remains for medalists and American medal firms to stretch the envelope for both coins and medals!