The U.S. Mint is spending about $12 million in a four-city pilot program in an attempt to dissuade consumers away from their convictions that dollar coins are superior to paper bills. The pros and cons of $1 coins have been debated for years. The first round knockout always goes to the untouched champ, Mr. Paper Note. The bruised coin then pines away within government storage until its next mandated match.
In a cruel twist of fate, the dollar coin has just a few things going for it — coin collectors who find it unique, its production savings, and a government that continually throws money its way. The latter is despite foreknowledge the coin will always drop to the canvas hard as long as the $1 bill is pumped up by adoring consumer fans who use it every day.
$1 Bill versus $1 Coin: Which is the Winner Today?
While the US Mint has produced 120 million Presidential $1 coins on average for each of the first three honored Presidents these last 10 months, the Bureau of Engraving and Printing (BEP) reported a total production of 316.8 million $1 notes in September alone. What a mismatch.
Supporters of dollar coins will rightly argue they last about 30 years while the life span of a dollar bill is just around 21 months. But just like boxing, endurance means next to nothing if the match ends in round one. The final blow to Presidential $1 coin is that relatively few consumers use or have even seen one in their hand despite over 1.3 billion being minted to date.
USA Today’s Barbara Hagenbaugh wrote an insightful article (embedded below) on the topic of the new coins. She recounts the famous Harris Interactive survey from last March showing that only one-quarter of adults had seen Presidential coins and only 13 percent favored using them over paper money.
Despite the popularity of the state quarter program, the presidential dollar coins have not taken off, and interest appears to be waning. Federal Reserve banks, which buy coins from the Mint based on demand from banks that serve consumers and businesses, bought 96 million of the Andrew Jackson coins, the seventh and latest in the series. That is less than half the amount of Washington coins ordered.
This is not new for $1 coins, however. The failure of the Sacagawea Golden Dollar with 92.7 million of them still in storage from 2000 and 2001 is a small sampling of past letdowns.
Who is at fault for the continual failure of the dollar coin? Certainly not the U.S. Mint. Congress mandates their actions. Responsibility could be placed on the shoulders of a public who refuse to use the coins even though they save money. But that lacks logic. The government is providing an option, after all. People are simply choosing paper over coin for its obvious convenience.
In the end, it is Congress that has failed. If politicians want any degree of real success with $1 coins outside the collecting community, they must eliminate the one dollar bill. Passing legislative directives for various dollar coin designs or programs has not resulted in any significant consumer transactional increases.
The dollar bill, winner by knockout again…