United States Mint Director Ed Moy will testify before the House Financial Services Subcommittee tomorrow, March 11. A CoinNews article Friday discussed House bill H.R. 5512. It is that bill for which Mr. Moy will testify.
H.R. 5512, named the ‘Coin Modernization and Taxpayer Savings Act of 2008‘, seeks to change the composition of metals in coins in order to maintain or bring back their profitability - the penny and nickel, for example, cost more to produce than what they are worth. The penny costs approximately 1.7 cents to make and the nickel about 10 cents.
In regards to the hearing, U.S. Representative Luis V. Gutierres commented:
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The CoinNews Saturday eNewsletter and the short post Sunday morning included information about the Sunday night 60 Minutes news segment titled, Should We Make Cents?
Morley Safer reports on how the penny and nickel are worth less than the U.S. government cost to manufacture them - the penny almost two cents and the nickel almost a dime.
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The debate heated up on whether the metal composition of coins should be controlled by the U.S. Treasury and whether the ban of melting pennies for their copper content should be lifted.
CoinNews.net had its own article on the topic and, like other news organizations, coin collectors and bloggers, everyone was interestingly awaiting some type of outcome.
More debates were expected this week with scheduled House hearings on the matter. The House Committee on Financial Services, chaired by Congressman Barny Frank and a co-sponser of the newest bill that’s made national news headlines, had a hearing scheduled for yesterday, November 8.
It looked to be an interesting event with witnesses, testimony and two panels set up in front of the Domestic and International Monetary Policy Subcommittee. The participants:
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So says Democrat Congressman Zack Space of Ohio who’s trying to help a company within his district. The company, Jackson Metals, would melt pennies for their copper content.
Helping businesses is hard to fault. But is newly proposed legislation that would benefit companies like Jackson Metals and change coinage laws the right thing to do? What would Jackson Metals, Rep. Space, the government and taxpayers really get from it?
First, some history…
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Coin toning can intrinsically increase or decrease the value of coins. Natural coin toning can be quite beautiful. It can also be outrageously ugly.
And because beauty is often times in the eye of the beholder, placing a value on a coin due to its toning can present problems.
Should you pay extra or less for toned coins? After all, a coin that’s toned is going through a form of corrosion, right?
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During just the first half of this year, nearly 5.4 billion pennies and almost 880 million nickels were minted. That’s a lot of change. But did you know it actually costs more to make a penny or nickel than what they’re worth?
Craziness right? Well, unfortunately, it’s the truth. Since the fourth quarter of last year, steep metal prices pushed the cost of manufacturing the penny and nickel above their face value.
The biggest culprit is the price of copper, zinc and nickel. According to United States Mint specifications, 5-cent nickels contain 75% copper and 25% nickel while 1-cent pennies contain 2.5% copper with the remaining zinc. The price of these metals have each gone up significantly since early last year.
And what’s the result? The manufacturing cost of the penny has fluctuated between ~1.5-1.7 cents and the nickel between ~8-10 cents. We’re losing money! And suddenly, thoughts of melting pennies and nickels for their metallic value start to wonder into one’s mind…
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