As anyone fond of numismatics can tell you, the U.S. at one time issued coins ranging from half cents to $50 gold pieces (commemorative – the $20 double eagle was the highest “definitive” coin for regular circulation, though I understand a few of the $50 pieces did circulate). The last of these odd-to-us denominations, the $2.50, $5, $10, and $20 gold pieces, were discontinued in 1933 as a part of the Roosevelt financial reforms to combat the Depression.
Since then, we have functioned with commonly circulating coins of one, five, 10, and 25 cents, and issues of 50 cent and $1 coins rarely used in the East but not impossible to find, and apparently fairly common in the West.
Larger legal tender currency is all in the form of notes, principally Federal Reserve Notes but with a small quantity of United States Notes in a couple of denominations. And anti-counterfeiting measures have led to the recent significant redesigns of those notes.
Have any serious suggestions been given to larger denomination coinage? By “serious suggestions” I mean the sort of “issue raised by a Treasury task force” or “call by a Congressman for a study” discussions that might have actually led to some action. Obviously, like almost any imaginable change, somebody somewhere no doubt has suggested that we do so on the Internet or in a letter to the editor, but I’m talking the sort of proposal that gets looked at seriously by those with the power to make decisions. If so, what were the results?
I don’t think that dollar coins are fairly common in the West at all. I work in a bank vault coin room and we deal with dollar coins relatively rarely (still a bit, but NOTHING compared to any other coinage or dollar bills)
I think the lack of success of the $1 coins is a shame. Visiting places with 1 and 2-dollar coins I found them MUCH more convenient than bills, but it appears that here they weren’t distributed widely enough and people hold on to them longer instead of spending them like a “normal” dollar. As far as I know, there were never attempts made to replace the dollar bill with coins. I think the only real way to be successful would be to stop printing dollars and make coins the only option for banks and retail stores to use as change.
For your actual question, I don’t know, but judging by the lack of serious effort put into the golden dollar coins, I somehow doubt that they’ve seriously looked into plans for other large-denomination coins.
We’ve discussed the dollar coin numerous times in this MB. The consensus is that the only way to make it work is to remove the one dollar bill from circulation. The same will no doubt apply to higher denomination coins.
From 1933-1964, the half dollar was widely used in the East. It wasn’t the pariah that it became in the 1970’s. But you’re right about the dollar coin.
*There haven’t been United States Notes printed since the 1960’s. These are the “red seals” from the old days. *
I’m not aware of even a ‘flippant’ proposal for anything larger than a dollar coin. Perhaps there has been, but not in any serious, potentially interesting-to-the-mint/treasury dept. kind of proposal.
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For once, let’s not turn this into a dollar coin debate. If you want to do that, GD is wide open.
Now that that’s out of the way, it seems that US citizens are resistent to the adoption of any coin worth more than the quarter. I think this resistence boils down to two main reasons: natural intertia and a false sense of novelty. Inertia is easy enough to understand, but the false sense of novelty is an interesting conundrum that the US Treasury/Mint has never been able to adequately combat.
It boils down to people thinking, against all evidence, that coins they aren’t used to are rare. This leads to hoarding, making the originally false perception of scarcity a reality. Some people end up with pickle jars full of Kennedy dollars they will not spend because they think they’re going to be worth something someday, while the economy as a whole is still running on paper dollar bills. The fact Kennedy dollars will never be worth an exceptional amount is obvious to experienced collectors, but laymen have a difficult time understanding it.
The Sacajawea dollar was exceptionally prone to being hoarded because it is the only US coin in modern experience that looks golden. Give people something that looks exceptionally interesting and it will soon be lining sock drawers and weighting down glass jars of all kinds, regardless of how much money the Mint spends in making them.
So large-denomination coins become a huge money sink, for the people who hoard largely worthless (well, relatively) coins and for the US Government, which has spent billions making coins that will never see wide circulation.
Given the above, the lack of serious proposals for high-value coins should be obvious.
Technically they currently issue gold coins with rather large legal tender “face values”. Of course, the gold value is several times what the face value is.
Canada has done OK with it’s “twoonie”, but also remember the Canadian dollar is worth a lot less than an American dollar.
The vending machine industry is the big bottleneck. They really wanted a dollar coin years ago, but they now have many machines that will accept bills.
Gambling would be another need for large denomination coins, but they have allowed them to make & use “tokens” in any amount. In theory they aren’t supposed to be good outside that casinon, but for at least the dollar “tokens”, I found them pretty much Ok in other casinos, and just fine for tips, and even an occasional small purchase.
I think you’re right. When they started minting the state quarters, I remember hearing that the Treasury was encouraging people to collect them. I doubt they would have encouraged collection if it costs them money.
The term for this is seigniorage, which m-w.com defines as the difference between the face value and the metal value of coins. So if the government issues a high-denomination coin, it’s a very good thing if people choose to hoard it.
