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Pennies, Nickels Worth Their Metal Under New House Bill
May 26, 2008 11:48 PM
by
findingDulcinea Staff
by Lindsey Chapman
Bill calls for pennies and nickels to be mostly steel, skirting higher copper and nickel prices to get the coins’ production cost back below their face value.
Bill calls for pennies and nickels to be mostly steel, skirting higher copper and nickel prices to get the coins’ production cost back below their face value.
30-Second Summary
Producing a penny cost 1.26 cents as of May 6, 2008; creating a nickel ran higher than 7.5 cents.
Because of the rise in copper and nickel prices, the House of Representatives has passed a bill that would make steel the main metal in the coins. The change is reminiscent of the steel pennies of World War II.
The present disparity between production costs, and the value of the penny in particular, has some people wondering whether minting pennies is necessary at all. “A modern penny simply isn’t worth enough to worry about,” writes The New Yorker.
Changing the composition of nickels is another matter though, because they’re used in vending machines, which distinguish real coins from fake ones based on weight and size.
Regardless of the consequences, Rep. Luis Gutierrez says something must be done to address the issue. If the United States doesn’t change the metal content of its coins, making them will contribute “to our national debt by almost as much as the coin is worth,” Gutierrez cautions.
Other coins are faring better than pennies and nickels. Dimes cost slightly more than 4 cents to mint. A quarter costs roughly 10 cents, while dollar coins run about 16 cents.
Because of the rise in copper and nickel prices, the House of Representatives has passed a bill that would make steel the main metal in the coins. The change is reminiscent of the steel pennies of World War II.
The present disparity between production costs, and the value of the penny in particular, has some people wondering whether minting pennies is necessary at all. “A modern penny simply isn’t worth enough to worry about,” writes The New Yorker.
Changing the composition of nickels is another matter though, because they’re used in vending machines, which distinguish real coins from fake ones based on weight and size.
Regardless of the consequences, Rep. Luis Gutierrez says something must be done to address the issue. If the United States doesn’t change the metal content of its coins, making them will contribute “to our national debt by almost as much as the coin is worth,” Gutierrez cautions.
Other coins are faring better than pennies and nickels. Dimes cost slightly more than 4 cents to mint. A quarter costs roughly 10 cents, while dollar coins run about 16 cents.
Headline Link: Changing the make-up of pennies, nickels
The House-passed measure to reduce production costs for pennies and nickels could save the United States $100 million a year. Supporters say it would also combat rising metal prices. Opponents to the bill, however, say there isn't enough time for the metal industry or the public to offer opinions on the new coin composition.
Source: FOX News
Background: Metal prices
Since 2003, copper and nickel prices have tripled, and zinc has quadrupled in value.
Source: CNN
Historical Context: Composition of the penny
From 1793 to 1837, pennies were made of pure copper. Over the years that followed, varying amounts of bronze, nickel, zinc, steel and tin were added to and removed from the coin’s composition. Since 1982, pennies have been made of 97.5% zinc and 2.5% copper.
Source: USA Today
Opinion & Analysis: The value of pennies
The New Yorker discusses the value of the penny, debating whether they’re really worth producing anymore. Some people say the penny could and should go; in fact, a few other countries have already stopped producing their least valuable coins. Others worry that ceasing penny production would cause problems.
Source: The New Yorker
Stephen J. Dubner of “Freakonomics” says he’s long wished the penny would be abolished, “and probably the nickel too.” Often, he throws pennies away, but he says the “sensible alternative” to this solution would be rebasing, or changing the metal make-up of the coin.
Source: Freakonomics
Related Topic: Theft of copper pipes
In April 2008, reports surfaced of copper pipes being stolen in a rash of home break-ins across the country. Reuters reported that in areas suffering from a high incidence of home foreclosures, the copper and other metals used in plumbing, heating and telephone systems were more valuable than the homes themselves.
Source: findingDulcinea
Reference: Producing money
Article 1, Section 8, of the Constitution grants Congress the right to mint money.
Source: United States Senate
The United States Mint was created on April 2, 1792. In recent history, the Mint has produced between 11 billion and 20 billion coins each year.
Source: The United States Mint
Paper money is produced by the Bureau of Engraving and Printing (BEP), not the U.S. Mint. Learn about the security features included in the money you spend, and additional interesting facts about currency from the BEP Web site.
Source: The Bureau of Engraving and Printing
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