About a year has passed now since U.S. Rep. Jim Kolbe made headlines by introducing his anti-penny bill, yet these pesky one-cent coins continue to jingle uselessly in people's pockets. Can nobody rid America of this copper-coated scourge?
Kolbe, an Arizona Republican, is doing his best, although his proposed Legal Tender Modernization Act is languishing in a subcommittee. The bill would not ban pennies, but merely discourage their use by establishing a system under which cash transactions would be rounded up or down. That would render the penny unnecessary.
"It's practically useless in everyday life," complains Neena Moorjani, Kolbe's press secretary. But the penny has its fans, especially in Tennessee, which is rich in zinc. Up until 1982, pennies were made mostly of copper; since then they have been 97.5 percent zinc, with a little copper mixed in for appearance's sake.
Recently, two lawmakers from the Volunteer State introduced a resolution commemorating the 20th anniversary of the zinc-based penny. Fans of this coin note snidely that Kolbe's home state of Arizona is rich in copper — which makes up a bigger percentage of the larger-denomination coins that might be more heavily used if the penny were discontinued. Kolbe also favors replacing paper dollar bills with longer-lasting $1 coins — and as it happens, the Sacagawea "golden dollar" introduced two years ago is made mostly of copper.
Moorjani stoutly rejects the suggestion that her boss is shilling for his state's copper interests. "Our office has not spoken to the copper industry in Arizona about this issue at all," she says, referring to the Legal Tender Modernization bill.
Be that as it may, Kolbe's proposals are only logical. Several other nations have eliminated their small-denomination coins without going to wrack and ruin in the process, and Canada managed to replace its dollar bills with dollar coins. Yet many Americans recoil from the idea of losing the penny, and they have responded to the golden dollar more by admiring its image of Sacagawea than by using it to buy things.
Still, the U.S. Mint considers the new dollar coin a success. "America seems to really like the coin, despite what people might read to the contrary," asserts Doug Hecox, a Mint spokesman. If they tend to hoard it rather than spend it, that just means they value it, he says: "Their inaction speaks louder than words."
After producing more than a billion Sacagawea dollars, the Mint temporarily halted production earlier this year. But Hecox says that was due to the economic slowdown, which affected demand for all coins. Now that a recovery seems to be at hand, the Mint soon will consider putting Sacagawea back into production, he adds.
The Mint never stopped producing pennies, however, recession or no recession. Last year it stamped out 10.3 billion of them, and through the first five months of this year it put another 2.5 billion shiny new pennies into circulation.
Meanwhile, Kolbe's bill molders in some congressional cubbyhole. The ban-the-penny movement lives on (it was featured on one of last season's episodes of The West Wing), but the pennies keep mounting up.
Perhaps the University of Pennsylvania's prestigious Wharton School could take the lead in studying this issue and determining which course makes the best economic sense. That would only be appropriate, because this school originally was endowed by Gilded Age industrialist Joseph Wharton, who got rich by cornering the market for nickel and then persuading Congress to create a new coin made exclusively of metal from his mines.
More than a century later, the nickel is still with us, but these days it contains more copper than nickel. Chalk up another win for Arizona.
Now, if Kolbe and company could just get Congress to drop the penny, they would introduce some real sense into America's currency.
For more, go to Forbes.com..