$1B in Unwanted Coins Languish in Federal Reserve

Wednesday, 29 Jun 2011 02:31 PM

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The United States Federal Reserve’s coffers are bulging with $1 billion worth of unwanted $1 coins that cost $300 million to produce, and it could produce a billion more $1 coins by 2016, according to an investigation by National Public Radio (NPR).

The Fed’s three attempts to popularize the use of $1 coins dates to the Susan B. Anthony coin that went into circulation starting in 1979, and again in 1999.

unwanted coins,Federal Reserve,Susan B. Anthony dollar,Sacagawea dollar,George Washington
The Sacagawea dollar started circulating in 2000, and is still being produced.

The U.S. began production of presidential $1 coins in 2007, with the face of an individual president gracing each series released quarterly, starting with George Washington (the current series bears the likeness of Ulysses S. Grant).

NPR quotes a 2010 Federal Reserve report to Congress that said the coins are languishing in vaults "with no perceivable benefit to the taxpayer," and that they’re being returned by banks in increasing amounts.

"We have no reason to expect demand to improve," said the report. "We also note that a 2008 Harris poll found that more than three-fourths of people questioned continue to prefer the $1 note."

One benefit of the coins is that they last longer than bills, the Fed has long maintained. A study by the Government Accountability Office suggests that $5.5 billion could be saved over 30 years by switching exclusively to $1 coins over bills.

The trick is to get the public to switch over to the coins, which some suggest is politically impossible.

Former Delaware Republican Rep. Mike Castle, who sponsored the bill for the production of the presidential coins, told NPR that “politically it's not something the members want to deal with, so it's just very hard to get something like that done."

"It's ridiculous to have this kind of over-inventory pile up," Castle continued. "I might actually make some phone calls myself as a result of reading these reports and learning more about what this problem appears to be."

While there’s a certain logic to completing the series of presidential coins, it also seems outlandish to produce something no one wants, suggested former Rep. Earl Pomeroy, D-N.D.

"Is the nation waiting with bated breath for us to get to the Calvin Coolidge coin?” he wondered. “No! Maybe we should call a halt to this whole thing."

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