Skip to comments.A Penniless America - Common Cents?
Posted on 07/02/2006 9:52:07 AM PDT by Extremely Extreme Extremist
(AP) PLYMOUTH, Mass. -- In this village settled by thrifty Pilgrims, you can still buy penny candy for a penny, but tourist Alan Ferguson doubts he'll be able to dig any 1-cent pieces out of his pockets.
He rarely carries pennies because "they take up a lot of room for how much value they have." Instead, like so many other Americans, he dumps his pennies into a bucket back home in Sarasota, Fla.
Pity the poor penny!
It packs so little value that merry kids chuck pennies into the fountain near the candy store, just to watch them splash and sink. Stray pennies turn up everywhere: in streets, cars, sofas, beaches, even landfills with the rest of the garbage.
A penny bought a loaf of bread in early America, but it's a loafer of a coin in an age of inflation and affluence, slowly sliding into monetary obsolescence.
For the first time, the U.S. Mint has said pennies are costing more than 1 cent to make this year, thanks to higher metal prices. "The penny is going to disappear soon unless something changes in the economics of commodities," says Robert Hoge, an expert on North American coins at The American Numismatic Society.
That very idea of spending 1.2 cents to put 1 cent into play strikes many people as "faintly ridiculous," says Jeff Gore, of Elkton, Md., founder of a little group called Citizens for Retiring the Penny.
And yet, while its profile of Abe Lincoln marks time in the bottom of drawers and ashtrays, the penny somehow carries a reassuring symbolism that Americans hesitate to forsake.
"It's part of their past, so they want to keep it in their future," says Dave Harper, editor of Numismatic News.
Gallup polling has shown that two-thirds of Americans want to keep the penny coin. There's even a pro-penny lobby called Americans for Common Cents.
The Mint's announcement is a milestone, though, because coins have historically cost less to produce than the face value paid by receiving banks. They are moneymakers for the government.
U.S. Rep. Jim Kolbe, of Arizona, wants to keep it that way. But when he asked Congress to phase out the penny five years ago he failed; he intends to try again this year. If he fails again, he joked recently, he may open a business melting down pennies to resell the metal.
The idea of a penniless society began to gain currency in 1989 with a bill in Congress to round off purchases to the nearest nickel. It was dropped, but the General Accounting Office in a 1996 report unceremoniously acknowledged that some people consider the penny a "nuisance coin."
In 2002, Gallup polling found that 58 percent of Americans stash pennies in piggy banks, jars, drawers and the like, instead of spending them like other coins. Some people eventually redeem them at banks or coin-counting machines, but 2 percent admit to just plain throwing pennies out!
"Today it's a joke. It's outlived its usefulness," says Tony Terranova, a New York City coin dealer who paid $437,000 for a 1792 penny prototype in what is believed to be the denomination's highest auction price.
"Most people find them annoying when they get them in change," he adds. "I've seen people get pennies in change and actually throw them on the floor."
Not Edmond Knowles, of Flomaton, Ala.
No, he hoarded pennies for nearly four decades as a hobby. He ended up with more than 1.3 million of them -- 4.5 tons -- in several drums in his garage. His bank refused to take them all at once, but he finally found a coin-counting company, Coinstar, that wanted the publicity.
In the biggest known penny cash-in ever, they sent an armored truck last year, loaded his pennies, and then watched helplessly as it sank into the mud in his yard. They needed a tow truck to redeem it. "I still got a few ruts in the yard," says Knowles.
His years of collecting brought him about $1 a day -- $13,084.59 in all.
A penny saved was a penny earned for Knowles, but he took another lesson from the experience, too: "I don't save pennies anymore. It's too big a problem getting rid of them."
Another problem: deciding what to make the penny from. Copper, bronze and zinc have been used, even steel in 1943 when copper was desperately needed for the World War II effort. In 1982, zinc replaced most of the penny's copper to save money, but rising zinc prices are now bedeviling the penny again.
"I'm very surprised they haven't gone to plastic," muses Bill Johnson, a wheat-penny collector who owns the Plimoth Candy Co. (It uses an old spelling of Plymouth.)
Even in his shop where a penny still buys a Tootsie Roll, he leaves a few pennies scattered on top of the cash register for customers like Lindsay Taylor, of Westwood, who is buying $1.78 worth of candy.
She is carrying no pennies because her sons have taken them for their old-fashioned piggy banks, which automatically flip coins inside. Her 2-year-old, she says, "just loves pushing the button."
Others have their own reasons for valuing the humble coin, which borrowed its colloquial name from British currency. The "cent" -- meaning 1 percent of a dollar -- has been struck every year except 1815, when the United States ran out of British-made penny blanks in the wake of the War of 1812.
"It's part of the fabric of American culture," says David Early, a spokesman for the government's Lincoln Bicentennial Commission.
The penny took on the profile of President Lincoln, beloved as the Union's savior during the Civil War, on the centennial of his birth in 1909. The first ones carried ears of wheat on the tails side, but the Lincoln memorial has replaced those. Four new tails designs with themes from Lincoln's life are planned for 2009, with a fifth permanent one afterward to summarize his legacy.
This redesign, the first major one since 1959, has heartened penny lovers.
Those who want to keep the penny coin include small merchants who prefer cash transactions, contractors who help supply pennies, and consumer advocates who fear rounding up of purchases.
"We think the penny is important as a hedge to inflation," says director Mark Weller of Americans for Common Cents. "Any time you have more accurate pricing, consumers benefit."
Joining with the lobby, the wireless network Virgin Mobile USA recently launched a save-the-penny campaign. Its penny truck will travel cross-country to gather pennies for charity.
Scores of charities esteem the penny, which many Americans donate without a second thought. Like shouts in a playground, pennies can multiply quickly.
"People don't like carrying them around, so we dump them into the nearest bowl," says Teddy Gross, who founded the Penny Harvest charity drive in New York City schools. "By the end of any given year, most Americans have got a stash of capital which is practically useless, but it's within easy reach of a young person."
Last year, his children raked in 55 million pennies, which had to be redeemed with help from the Brink's security company. They also bagged about 200,000 spare nickels.
By the way, the Mint says nickels are also costing more to produce than they're worth. Pity the poor nickel?
That's quite a graph. What we pay for copper wire right now is insane. And I just bought about 50' of copper gutter for my house. I got it at a good price, since the guy had it in storage for over 3 years. He ordered too much for a previous project, and he owed a favor.
Those Darn ASIANS are buying all the pennies at #19.
Only if you mean copper-plated zinc bullion.
So who owns it? Do they make a lot of money off of it? How much?
"Pennies are the only presently circulating "bullion" coin."
Sorry I didn't Rhodium. Talk about a huge price for a little metal.
Pennies are the only presently circulating "bullion" coin.
Now that is a great observation!
Judging by the price of a gallon of gas, a dime now has less value that a penny did in 1960.
According to the website Economic History Resources, a penny in 1960 was worth as much as 7 cents today, I consider that understated. I think the truth is at least a ten to one ratio, in fact I am almost certain it is worse.
I can carry one hundred dollars worth of groceries in to the house in one trip without much trouble and I am not nearly as strong as I used to be. In 1960 you would have needed a pickup truck and probably raised sideplanks on it to haul one hundred dollars worth of groceries.
I have some copper tubing that I bought thirty years ago and neve used, I wonder what it is worth now.
Well I won't make that mistake again.
They're only moneymakers for those ignorant of opportunity costs. Even if a penny only costs 0.5 cents to make, and a nickel costs 2 cents, it would still be better to dump the penny and increase nickel production to compensate.
I can just imagine what you find on the beaches...
Neither does anyone except the shareholders control the Federal Reserve, and the shareholders are the National Banks.
Do they make a lot of money off of it?
How much does the Fed earn? Hey! it prints money, legally. So what kind of question is that?
The kind of question that you didn't understand. I don't care how much the Fed makes, I want to know how much the shareholders make.
When the Fed hikes the "prime rate", it earns interest on the money,
I hate to break it to you, but the Fed has nothing to do with the prime rate.
It proudly states that it returns any excess to the US Treasury.
So the shareholders don't get to keep all the money the Fed earns? What kind of secret evil conspiracy returns money to the Treasury?
If so, how would you arrive at a fair price? What is the printing press that legally can be used to print an infinite number of dollars worth????
Wow! I guess each share of the Fed must have an infinite value? Who owns these shares? Their shares must also have an infinite value.
Yet, for any national bank that is listed on a public stock exchange, Sarbanes-Oxley requires them to mark to market any assets they hold. How can the national banks comply with this requirement? They cannot.
Have you ever seen that line item on their balance sheet? If not, how do you know that they haven't marked it to market?
In truth, there will be endless obstacles and delays placed in the way of any politician who wants the Federal government to acquire full control of the Federal Reserve corporation.
Yeah, I'd feel much better if Nancy Pelosi and Cynthia McKinney were in charge of the Federal Reserve. You're funny!
Having a share in such a company benefits you only if you get some of those ill-gotten earnings. You never did tell me how much the shareholders get. If the Fed "earns" $30 billion, spends $2 billion and returns $28 billion to the treasury, where is the infinite profit that you claim the shareholders are entitled to?
Nothing prevents forced liquidation of our assets through the income or death tax system, or worse a new tax such as a wealth tax, where you must pay a percent of your assets each year no matter how much income you had.
Scary prospects. Totally unrelated to the Fed.
And with deliberate inflation, the Fed doesn't have to lift a finger as rising incomes float all taxpayers upwards in the tax brackets
Tax brackets are inflation adjusted.
So again, what is the value of one share of a corporation that can enslave a whole nation? And already has?
LOL! You tell me.
A share in the Federal Reserve is a share in a corporation that is the primary cause of slavery- tax slavery.
Your tinfoil is on too tight. It's cutting off the circulation to your brain.
Your tinfoil is on too tight. It's cutting off the circulation to your brain.
Just try and escape the tax slavery we are in. Go ahead. Prove me wrong.
How do you get a quarter into the neck of a Bud bottle?
That's an issue that has nothing to do with the Federal Reserve.
Go ahead. Prove me wrong.
Again? I already refuted your "infinite value" assertion. Your higher inflation = higher tax brackets assertion. Your mark-to-market assertion. Your "Fed sets the prime rate" assertion. Your "the Fed earns money on their hiked prime rate" assertion.
I'm getting tired of proving you wrong. How about, for a change, you prove one of your assertions is correct? Loosen the tinfoil, let the blood flow return to your brain and give it a try. After so many years of wrong thinking, it may be difficult for you, but give it a try. Before it's too late.
TAXES will rise by 5% increments instead of 1% increments. THAT is bad.
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