On July 19, 2011, separate bills were introduced in the House of Representatives and the Senate which call for the termination of the Presidential $1 Coin Program. The legislation follows numerous high profile media reports about growing hoard of $1 coins in storage and a report from the Federal Reserve System Board of Governors indicating costs of $3.65 million to transport and store the hoard.
The bill H.R. 2593: Wasteful Presidential Coin Act of 2011 was introduced by Rep. Jackie Speier of California and is cosponsored by Rep. Jared Polis of Colorado.
Specifically, the bill calls for subsection (n) of Section 5112 of title 31 to be struck. This subsection of the code provides for the redesign and issuance of the Presidential $1 coins at a rate of four per year until all deceased (for 2 years or more) former Presidents have been honored. The amendment to the code would take effect at the end of a 30-day period on the date following enactment. Currently, the series has reached the 18th President Ulysses S. Grant and would have been expected to continue until at least 2016.
The bill also seeks to restrict the overproduction of $1 coins. This seems to cover the separate Native American $1 Coin Program, which would remain within the code. Specifically, “No $1 coin may be minted or issued under this section during any period in which the number of $1 coins issued, but not in circulation, is more than 10 percent of the number of $1 coins in circulation.”
H.R. 2593 would seem to have at least one additional implication. It does not specifically address the First Spouse Gold Coin Program, contained in subsection (o) of Section 5112 of title 31. This program features each of the spouses of the former Presidents on one-half ounce 24 karat gold coins. The code instructs the series to continue “during the same period described in subsection (n)”. Without subsection (n) in the code, the First Spouse series would presumably also come to an end.
The restriction on overproduction of $1 coins included in the bill seems particularly ambiguous. In the first place, how many $1 coins have been issued? The number of Presidential $1 coins struck by the United States Mint is more than 2.2 billion, and the production for the Native American $1 Coin Program is around 180 million, but what about previous $1 coins? There were more than 1.4 billion Sacagawea Dollars struck and issued by the US Mint. Prior to this, there were 900 million Susan B. Anthony Dollars, and more than 600 million Eisenhower Dollars. How do you determine the number of these $1 coins “issued but not in circulation”? Possibly this language was intended to reference the number of coins being held by the Federal Reserve Banks, but large portions of the coins held by the public are no doubt accumulated in jars of loose change and coin collections, and not actively circulated. The application of this restriction with the current language seems impossible, if not highly problematic.
The Senate bill S. 1385 introduced by Sen. David Vitter of Louisiana and cosponsored by Sen. Jim DeMint of South Carolina takes a more succinct approach. It simply calls for subsection (n) to be struck and replaced with “(n) [Reserved]”.
Similar to the House bill, this would eliminate the Presidential $1 Coin Program, leave the Native American $1 Coin Program intact, and seem to end the First Spouse Gold Coin Program.
Other Possible Responses
While both of the bills introduced would address the current issue of storing and maintaining our national $1 coin hoard, they would again put off the main issue of the non-circulation of $1 coins. From 1971 to 1978, Eisenhower Dollars were produced in large numbers and failed to meaningfully circulate. It was believed that the coins were too bulky and large to be readily used by the public. In 1979, the smaller sized Susan B. Anthony Dollar was introduced to solve the perceived issues of the previous series. The coins were extremely unpopular with the public since the smaller size caused them to be confused with quarters. In 2000, the next bold experiment was the Sacagawea Dollar, which had both a distinctive edge and color, so as not to be confused with other denominations. Again, the coins failed to circulate. The next attempt came in 2007, with the present series that would feature rotating designs to entice the public’s interest. Once again, it is clearly not working.
All along, the obvious primary deterrent to $1 coin circulation has been the coexistence of the $1 banknote. If the Presidential $1 Coin Program is terminated, several years in the future, I am sure that yet another well meaning $1 coin series will be introduced and again rejected by the public.
On numerous occasions, the Government Accountability Office has indicated that replacing the $1 banknote with the $1 coin would save money in the long run. The switch has taken place long ago in countries around the world with positive results and seemingly little backlash from the public.
A second possible response to the $1 coin hoard would be the minor tweaks to the existing legislation that were recommended by the United States Mint and the Federal Reserve System Board of Governors. The mandatory introductory period during which Reserve Banks must have a sufficient number of each new Presidential $1 coin design available would be eliminated, and the production requirement for the Native American $1 coin would be removed.
Without these requirements, the two $1 coin series could continue in limited fashion. A likely scenario would be that the coins would not be produced for general circulation, but struck in quantities necessary to satisfy the demand from coin collectors. Meanwhile, any actual circulation demand for $1 coins could be satisfied from the existing hoard.
The limited continued production of $1 coins would be a money maker. When the previous Sacagawea Dollars failed to circulate, the US Mint continued to produce the coins and sell them to collectors in bags and rolls at a premium to face value. The US Mint currently sells 25-coin rolls of each Presidential $1 coin and Native American $1 coin to collectors for $39.95 plus shipping and handling. That makes for a price of $1.60 per coin for something that costs about 30 cents to produce. Demand for the rolls would no doubt increase if the coins were not available through any other channels.
CaptainOverkill says
July 21, 2011 at 11:05 amHi Michael,
Suppose the legislation introduced by Vitter/DeMint or Speier/Polis were to pass and the $1 coin program was abruptly terminated. Would that require the Mint to withdraw all its products presently “on the shelf” and immediately suspend all sales of $1 coin rolls and first spouse coins through its website? I am trying to determine whether I should be rushing out to try to grab some Grant rolls or not. It seems unreasonable for them to yank products off the shelf like that, but I’ve learned to assume nothing when dealing with the law.
Additionally, do you think that if the $1 coin program is canceled in the next few days and all related products are NOT withdrawn, that the Hayes coins will still be put on sale on August 18? I am not clear how far in advance the Mint is producing these coins.
SmallPotatos says
July 21, 2011 at 11:17 am“The Senate bill S. 1385 introduced by Sen. David Vitter of Louisiana and cosponsored by Sen. Jim DeMint of South Carolina takes a more succinct approach. It simply calls for subsection (n) to be struck and replaced with “(n) [Reserved]“.
Similar to the House bill, this would eliminate the Presidential $1 Coin Program, leave the Native American $1 Coin Program intact, and seem to end the First Spouse Gold Coin Program.”
I am just wondering if the First Spouse series would totally end if section (n) was replaced with [Reserved] versus struck altogether.
“(o) First Spouse Bullion Coin Program.— (1) In general.— During the same period described in subsection (n), the Secretary shall issue bullion coins under this subsection that are emblematic of the spouse of each such President. ”
I suppose it comes down to a legal interpretation issue. If (n) is left intact (but Reserved), then ther are no time period constraints and the coins could potentially be minted, whereas if (n) was struck out in its entireity then (o) could not be enacted at all; thus ending the program.
“
joe says
July 21, 2011 at 12:16 pmThere’s an easy way to solve the problem with the dollar coins: put some silver into them (perhaps 5%). People would then hoard them and there would be no storage issue.
Tim says
July 21, 2011 at 12:29 pmJoe has it right !!!
Chris says
July 21, 2011 at 1:38 pmIf “(n)” is stricken and/or replaced with “(n) Reserved,” then the following para from the Act would take precedent:
‘‘(5) ISSUANCE OF COINS COMMEMORATING FIRST SPOUSES.—
‘‘(A) IN GENERAL.—The bullion coins issued under this subsection with respect to any spouse of a President shall be issued on the same schedule as the $1 coin issued under subsection (n) with respect to each such President.”
This was a point that I had posted early on in another great forum than Michael manages – but was forced to lock down. Unless addressed specifically, the Spouse coins could not be issued because they no longer will coincide with the release of any $1 Presidential Coins. The total impact to either program will depend upon the exact language and how it is crafted into this proposed legislation.
The Act can be found in its entirety within the Mint’s webpage:
http://www.usmint.gov/pressroom/?action=legislation (And scroll down to “Circulating Coins”)
or here:
http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=109_cong_public_laws&docid=f:publ145.109.pdf
Louis Golino says
July 21, 2011 at 4:20 pmWe have absolutely no idea at this point what the prospect are for passage of any of these bills, and the process will be long and drawn out like everything the Congress does, so I see no need to worry now. But I would suggest contacting your member of congress if you want the US to keep issuing dollar coins and spouse coins. You can reach them by going to their web site which can be found on http://www.house.gov and http://www.senate.gov. Then call, fax or e-mail your views.
Dennis says
July 21, 2011 at 4:25 pmSimply, eliminate the paper dollar. Ramp up the production of the two dollar bill so a person does not have to have a pocketful of dollars. Eliminate the production of pennies, which is costly to produce and not very useful except to pay tax. This frees up space in the cash register. Then those dollars will have a use.
Frank says
July 21, 2011 at 4:56 pmThe people in this country is not ready for dramatic changes like eliminating the 1 dollar bill or 1 cent coin any time sooner. The legislation for those can take decades to complete given the track records. The more realistic scenario will be make the president dollar series a collector-only Mint product.
face1004 says
July 21, 2011 at 5:01 pmI say Dennis has it right!!!
Michael Alexander says
July 22, 2011 at 3:13 amHaving interviewed former Mint Director Edwin Moy in 2010, I got the feeling that the management of the Mint is aware of the situation that, if the dollar note was discontinued, the $1 would circulate as a necessity and this subject came up in our discussions as well as the use of the half dollar. Quite simply, it is apparently the opinion of the Congress to “give the public the choice” of how they will pay for goods & services.
By not correcting this situation, this leaves the US looking inept and unable to solve a simple situation as the circulation of a dollar coin, for the third time!
I do believe that not only does the dollar coin need to circulate as it is now a practical user-friendly coin, but all the remaining denominations need to be looked at, the half dollar and quarter especially and perhaps the Mint should use the “golden” dollar as a template for these two denominations.
At some point, the one cent coin will have to be discontinued as the production costs and buying power of the coin are no longer favourable or practical, sadly, the wheels of progress in Congress do move at two speeds, slow and stop.
Take a break from the production of the dollar note, just one year as an experiment and monitor if the coin makes up the shortfall, as for the Presidential series, I’m afraid I was never a fan of these coins to begin with so if it is discontinued. I will not be lamenting it’s passing… let’s go back to basics and issue a reliable Ronald Reagan circulation Dollar and not wait until at least 2016 to see his image on US coinage, included in a series which might just end up in a bank vault or even worse, a drawer as the rest of his predecessors, not much of a tribute…
Mitch says
July 22, 2011 at 9:44 amThe solution is extremely simple. Eliminate the paper dollar!
mj schranck says
July 22, 2011 at 2:23 pmI’m in agreement that the best solution is to eliminate the paper dollar. The UK eliminated the paper 1 pound note 30 years ago. It’s a shame that congress is concerned that citizens will get upset about the elimination of the paper dollar as well as the penny, but how about the fact that this would be an opportunity to reduce spending. With billions of dollar coins in storage it wouldn’t take mush to ramp up for it.
As Louis mentioned, contact your member of congress, I will.
J A says
July 22, 2011 at 2:48 pmMICHAEL!!
The Mint has just modified the Direct Ship program!!!
take a look at the website
Jaime
http://catalog.usmint.gov/webapp/wcs/stores/servlet/CategoryDisplay?langId=-1&storeId=10001&catalogId=10001&identifier=8100
mj says
July 22, 2011 at 3:24 pmGlad to see an end to the frequent fliers bragging about all the trips they take due to the direct ship program.
Art says
July 22, 2011 at 8:22 pmI’ve been trying to keep the coins in circulation by using them locally. I purchase 10 rolls at a time at cost and faithfully use them. It would be nice if vending machines could be calibrated to accept these coins as well. I was amazed to go to one bank and ask for coins and they gave me two rolls of dollar coins that were already circulated, lost some of the sheen and even included a couple of Susan B Anthony’s. I spent them all. I have had a hard time getting the new issues at the banks-they never seem to have them here. People would stop hoarding them if they were made to realize that they will not appreciably increase in value for a very long time if at all.We could be intelligent like Canada and stop printing paper $1 currency. Canada has the $1 and $2 coins that are in circulation and doing well.
Frank says
July 22, 2011 at 8:55 pmThis just came in:
Circulating $1 Coin Direct Ship Rolls
Adobe Acrobat Reader
The United States Mint has eliminated the credit and debit card purchase of $1 Coins through its Direct Ship Program effective July 22, 2011. Customers who wish to purchase $1 coins through the Direct Ship Program can still do so by wire transfer, check, or money order. Customers who wish to purchase the coins by wire transfer may fax their order to: (202)756-6585. Customers interested in purchasing by check or money order may do so by writing to:
United States Mint
PO Box 71192
Philadelphia, PA 19176-6192
Please download the order form and follow the instructions provided on the form. (Order Form).
The Mint has determined that this policy change is prudent due to ongoing activity by individuals purchasing $1 coins with credit cards, accumulating frequent flyer miles, and then returning coins to local banks. Local banks, in turn, returned coins to the Federal Reserve. While not illegal, this activity was a clear abuse and misuse of the program.
The Mint has undertaken several aggressive internal and external actions to mitigate this issue, including restricting chronic and repeated use of credit cards, contacting customers who frequently placed large numbers of orders to ensure they were using the coins for legitimate business purchases, and other measures. While these measures eliminated a significant amount of misuse in the program, we believe some abuse still exists. Eliminating the credit and debit card purchase of the $1 coin is the next step in our efforts to root out abuse in this program and ensure it is better targeted toward fulfilling its intended purpose—which is to get the $1 Coin into greater circulation.
Thank you for your understanding and your continued support of the $1 coin program.
The United States Mint
22 July 2011/12 pm
Rich T. North Andover says
July 23, 2011 at 6:12 amIt was my understanding that the $1 coins where suppose to replace the Dollar Bill. Doing this this would save tax payers 100’s of millions of dollars each year since a dollar bill only lasts 6 months in circulation verses the dollar coin lasts indefinitely .The mint has over a billion $1 coins already made and sitting in storage again saving the tax payer never mind the money it would save the budget!
Also I am a collector of bullion products such as the 1st spouse coins and for them to end that program would not be right for those of us who have been collecting them since 2007,but it seems the mint doesn’t care about the collecting public.
Unhappy Grandma says
July 23, 2011 at 7:16 pmI am a small collector and buy my coins from the Mint. I collect because I enjoy the History of the coins and the artistry that goes with them. I have never sold any coins—and I happily share them with grandchildren. At the end of this year we would be half way through the Presidential and Spouse Coin series and I will be very UNHAPPY if this stops suddenly. Not fair. I am sick and tired of the Mint starting things and ending them—as for hoarding——-WHY does the Mint still make so many dollar coins when the people refuse to use them? It is their problem not the collectors. Coin collecting is an interesting hobby and is a HISTORY of our country. I also like the Indian dollar coins—part of our history also. I am tired of new immigrants coming in and wanting to change what is and always has been the background of what America stands for. Let them learn what America is all about and lets go back to schools teaching OUR History and what made this country so great. I don’t see people leaving in droves but I see them coming here in the MILLIONS because this is the greatest country there is—–so let every newcomer learn about it and teach our children—–our COINS tell a story!
joe says
July 24, 2011 at 7:16 amThe discussions about getting rid of the paper dollar is a moot point. While I may personally agree, members of congress (Speier and Polis) are more short sighted and have introduced legislation to the contrary. The Mint has invested taxpayer dollars (probably not even presidential dollars at that 😉 ) into equipment to manufacture these coins. Now they have +$1B in storage (excluding costs to store them), and their solution is to just eliminate the program.
A longer term approach would be to eliminate the cent/nickel as they are money losers for us taxpayers. Produce more $2 bills (as mentioned above). Then introduce new metal content in a new dollar coin that is an alloy of copper/nickel/silver so that the coin value better reflects its actual value (like it used to). Change the design of the dollar coin to be something that is more universal (i.e., buffalo, mercury, liberty, etc.) instead of terrible designs like SBA, Ike, Saq, or cartoonish presidents. Problem solved.
joe says
July 24, 2011 at 7:20 amI might add, I do feel Grandpa’s pain regarding prematurely ending programs.
Rich T. North Andover says
July 24, 2011 at 12:21 pmThe mint doesn’t issue the Kennedy half dollars for circulation,why don’t they end that program too?Instead they want to end a program mid way through it,so a lot of us collectors will have a partial set of 1st spouse gold coins.There are too many politicians that have been in office too long and are set in there old fashion ways! I agree with phasing out the $1 currency note that cost the tax payers money.
Unhappy Grandma says
July 24, 2011 at 12:34 pmWouldn’t it be simplier for the Mint to just make LESS of each Presidential DOLLAR coin in the future and LESS of the Sacagaewea Dollar coins rather than to eliminate them altogether? They are already making money on them—none of the banks where I live carry the dollar coins and the Mint charges $39.95 plus s&h for a roll worth $25.00. Therefore they are charging $1.60 for a coin that costs about 30 cents to make.
I collected the state quarters and my grandchildren and I had lots of fun learning about the states. It was also a good way for NEW people (immigrants) to this country to learn about AMERICA as well. There was much publicity about the STATE PARKS quarters both in the newspaper, the web and television. However, NONE of the quarters ever made it to the BANKS or business’s in my area. I have had to order them from the Mint. I suppose those quarters are all stock piled as well—taking up room in some storage building. The tellers at the banks here are all newcomers from different countries and none really care about the state parks—or other states for that matter. You would think if SOMEONE had to handle money all day long—–THEY would LOOK at it and get a sense of what America is all about. I think this was intended in the first place to be a LEARNING tool for both newcomers and school children. A good GEOGRAPHY as well as a HISTORY lesson. Several friends have made it to the launches of the Parks Quarters. I thought some of the proceeds from the quarters was to go to maintain the parks. VACATION here instead of abroad. This country never carries through on anything!!! TO THE MINT: FINISH UP THE PRESIDENTIAL COINS and the SPOUSE COINS——-FINISH what you start. If the amount to be MINTED is to be 10,000 then stick to it instead of making 8,000 one year and 15,000 the next!
YES, and we taxpayers just did pay for equipment to make the 5 ounce three inch quarters—–another waste of money! I have collected some of those—and so far we have enjoyed them—-but where to KEEP 56 of them?
Walter Williams says
July 24, 2011 at 6:54 pmEarth to Mint!!! Just make enough to produce the Uncirculated P&D sets and proof sets.
STOP making all those rolls and rolls!!!
Quint Evans says
December 26, 2011 at 11:09 pmI personally dont want the dollar coin “bulge ” in my pocket , Its bad enough to have pennies, nickels and quarters messing up my jeans. Dollar bills work fine . Other countries money is/are a disaster……… a bad comparison.
Speaking of bulges Id like to make unhappy grandma happy by agreeing with her. The quarter series is great learning tool for young collectors a fun way to learn about America’s history and geography …….. one day possibly a cherished keepsake from grandma and/or grandpa. .
As for the billions of dollars stockpiled doesnt that blow anyone’s mind? what is the mint thinking donate them to the countries huge deficit ………