Nickel Swap for Half-Dime Clarified in Legislation

Congressman Frank Lucas introduced House Resolution 6942 Thursday that would swap today’s Jefferson Nickel with a circulating half-dime of old.

In an article Friday, details were scarce because the Government Printing Office had not yet published the bill’s text. That is no longer the case.

H.R. 6942 is officially entitled the ‘5 cent Restoration Act of 2008.’ Interestingly, it is at the top of the brevity scale when it comes to coin legislation with fewer than a dozen sentences. At the bill’s core are three lines that state its intent:

(a) In General- Paragraph (5) of section 5112(a) of title 31, United States Code, is amended to read as follows:

      `(5) a clad half-dime that is based on the size and shape of the half-dime or 5-cent coin produced in the 1870s.’.

(b) Effective Date- The amendment made by subsection (a) shall apply to coins issued after December 31, 2009.

H.R. 6942 is directed toward reducing minting costs. A Jefferson nickel is composed of 75% copper. When copper prices were at their highest in 2008, the cost to produce each was nearly 10 cents. A Liberty Seated half-dime from the 1870’s, as referred to as the model for a new 5-cent coin, is smaller than a Roosevelt dime, and weighs half as much. Compared to the Jefferson nickel, its total metallic cost would be substantially lower, or about 1/7 the price. The Mint could actually profit, once again, in minting a 5-cent coin.

There are several problems with the legislation at its current state that will prevent its passage this year, or ever:

• Congress heads back home September 26 for the election season, making any proposed coin legislation an uphill battle this year.

• The bill needs further clarification. As an example, half-dimes from the 1870’s were also made from 90% silver. H.R. 6942 does not specify the type of metals that would be used to make a new half-dime or give the US Mint the authority to make the decision.

• The price of copper has dropped significantly. Since May, copper prices have fallen to such a degree that the melt value of the nickel is just under 5 cents. With that, there is less political pressure to make any changes. (This fact also likely places the Coin Modernization and Taxpayer Savings Act of 2008 – H.R. 5512 in a holding pattern.)

• Resizing the nickel would have potential repercussions in the vending machine industry and with retail businesses.

• Public education costs and efforts would also need to be considered in issuing a new circulating coin of a different size.

In short, and probably to the dismay of many coin collectors, it is unlikely H.R. 6942 will see the light of day this year, and debatable whether it will ever.

For any legislation to become law, it must pass both the House and the Senate, and get signed by the President.