New York –The $1 coin. Perhaps you have seen it. The one with the image of Sacagawea carrying a baby, its flashy gold color making it look as if it were minted in an amusement park?
After the government issued hundreds of millions of these golden dollars in 2000, the coin has all but vanished from circulation, an unmistakable declaration that, for one reason or another, the American people don’t want it.
Legislation being discussed in Congress, however, would authorize the U.S. Mint to begin production on a new and improved golden dollar, likely to enter cash registers by 2007. But why bother after the abysmal failure of the Sacagawea dollar?
Though the dollar coin has performed poorly in recent years, supporters with deep pockets have kept the coin idea alive. Many industries would stand to benefit if the golden dollar were incorporated into mainstream circulation, and the U.S. government would save an estimated $500 million a year from the cost efficiency of coin over paper. At the same time, powerful opposing interests prefer that the dollar bill maintain its monopoly, creating a behind-the-scenes, coin-versus-bill political showdown.
“A circulating dollar coin would help us pick up a couple hundred million dollars that we lose each year,” said Tom McMahon, chief counsel at the National Automatic Merchandising Association, which represents the nation’s vending machine industry. His members spent close to $1 billion to make their machines accommodate the dollar coin, and they’ve yet to enjoy the benefits. The reliance on bills costs the industry $300 million a year because 3 percent of the dollar bills collected are degraded and worn out, and because it is expensive to maintain the electronic dollar-bill readers.
McMahon testified before Congress on the matter of dollar coin or bill. His association was substantially involved in the Coin Coalition, a lobby that supported the elimination of the dollar bill. The coalition has been dormant since the failure of the golden dollar, but its devotees remain eager to see the new legislation pass.
“We were enthusiastic about the first golden dollar, with its different size and design,” said Mark Thorsby, executive director of the International Carwash Association in Chicago. “It was distinguishable,” whereas past dollar coins looked too much like quarters. An estimated half-million people are directly involved in the car-wash industry nationwide, and 40 percent of the locations are coin-
operated.
Thorsby thinks the proposal in Congress is a step in the right direction for making dollar coins easier and more appealing to use.
The new legislation authorizes the minting of golden dollars bearing the likeness of U.S. presidents. Every year, four new presidents would appear on the dollar in chronological order. The idea is modeled after the highly successful state quarter program that nearly tripled the demand for quarters.
The federal government has a lot to gain if coins finally take hold. The average lifespan of a dollar bill is less than two years, while coins last 30 years, which would lead to a tremendous cut in production costs.
Coin production is also more labor efficient than that of bills, needing 10 percent of the amount of time and money to be counted and processed, according to a Government Accountability Office study. The phase-out of the dollar bill in favor of the coin would save the government roughly $500 million a year.
An organization called Save the Greenback whips into action when the dollar bill is threatened, lobbying Congress to block any legislation that calls for the systematic phase-out of the dollar bill.
Save the Greenback draws its support from members of the ink and paper industries. One of its big supporters is Crane and Co., the paper company that is the exclusive manufacturer of the paper used for U.S. currency. The company did not respond to requests for comment.
Others who have spoken before the congressional Finance Committee say that without help from the retailers, the coin will not succeed, and the government should assist them in promotions.
“The coin requires some accommodations, like new compartments in cash register drawers, but retailers will accept any form of payment,” said Mallory Duncan, senior vice president of the National Retail Federation.
If retailers are to help promote the dollar coin, Duncan added, there needs to be broader distribution, not just shipments of coins made to a handful of larger retailers.
“With the golden dollar there will certainly be savings,” Duncan said, “but it means nothing if it isn’t used.”
While the public would enjoy many benefits from the conversion to dollar coins, the government abandoned its campaign to promote them. And without wider awareness of those benefits, it’s harder to build public support. Caught in this Catch-
22, coin proponents hope the new presidential dollar will finally build popular demand.
“The next series is a great idea,” said David Sklow, a researcher with the American Numismatic Association. The presidential dollar coins would be an educational tool for the public and a boost for the coin-collecting industry, Sklow said. “But it is an uphill battle. These coins are not going to circulate.”
