First off, it’s clear that a dollar coin should be practical. Almost every other Western nation, including our nation to the north, has something like that, and it works just fine for them. And it saves them oodles of (so to speak) money, since the cost-over-lifetime for dollar coins for the Treasury beats that of dollar bills.
But the US has tried twice since 1979 to introduce dollar coins — with the Suzy B., and then with the Sacajawea — and it’s flopped.
Now for most people, the reason is obvious — there is cost (cash register drawers, vending machines) to making the cutover, as well as habits to be changed, so, given their druthers, most people and businesses won’t do it if they have a choice. And, in fact, they have had a choice — dollar bills have been printed right alongside each of the dollar coin runs, which means that …
… well, that nobody’s made the change. You can argue that the Suzy B was too much the size of a quarter, or that the Sacajawea was … well, whatever aesthetic was wrong with it. But that’s trivial as a reason. The fact is, the government has only pushed the issue where it’s had control over the local currency, such as at military bases, but nowhere else. And, so, it hasn’t been adopted.
Now the answer to all that is obvious: at a mimimum, if Congress and Treasury want the dollar coin to succeed, they should simply stop printing dollar bills. If they’re even more eager, they can pull the old bills out of circulation, but the lifetime of a dollar bill is short enough that they’d all be gone soon enough.
Problem solved. People would adjust. Businesses would adjust. Nobody’d be giving it a second thought in five years.
Which, of course, means that this particular answer won’t be adopted. Instead, Treasury is going to try to encourage use of new dollar coins by (da-da-da-daaaah!) making them collectable. Giving up on actually making them necessary, or even desirable, the intent is that folks will simply keep them. Which, I suppose, makes the government some added dollars.
Supporters realize that the dollar coin is the Rodney Dangerfield of American money. So they make clear that any new coin would augment — not replace — paper currency. In fact, although the coins would enter into general circulation, their biggest selling point is that people might hoard them.
The idea steals a page from the popular 50 State Quarters series, in which the engraving on the 25-cent piece rotates to honor all the states. That legislation was also the brainchild of Rep. Castle. The subjects depicted on the dollar coins would be the U.S. presidents. The plan is to introduce four new ones a year beginning in 2007, honoring each of the nation’s chief executives in the order of their service.
Uh … yippee?
Frankly, I doubt lightning will strike twice. Folks were willing to collect commermorative state quarters because (a) quarters are cheap, and (b) it was a new idea. Dollars are four times as expensive (duh) and the novelty has worn off.
On the bright side, at least we’ll soon have close to fifty poorly circulated and unhelpful dollar coins to write about.
(via K2)
(This is an update from this story, I discover.)
Having been in Canada when the dollar coin was introduced, I can definitely say that it was annoying at first, but we just got used to it. We also got used to having our change jars suddenly worth a lot more money when we periodically turned in the metal for vellum.
The government ran the bills side by side with the coin for awhile, but there was definitely a phase out plan where the dollar bills were retired. I don’t recall if there was a concerted effort to pull the bills or if they just let them die of attrition, but we were switched over in fairly short order. The government was also pretty upfront about the fact that they were replacing the bill with the coin.
Funny how the US is playing this stupid game with the bill and the coin, which leads me to believe that it’s not really that interested in replacing the bill with the coin, all official protestations aside. I haven’t given much thought to the underlying motivation and I don’t much care to, but it might make an interesting question for someone else with the interest.
You’re bang on; if you want The People to adopt the coin, you pull the bills or they’ll have no incentive to change. Making them collectible isn’t going to make anyone use the coins any more than they are now.
Clearly this isn’t about making the switch, but about making money (literally as well as figuratively).
I suspect the management at the Mint/Bureau of Engraving/Treasury has decided that pushing for dollar coins is a great way to end your career, and so has given up. A pity.