hoarding copper cents? (US)

I am a lurker, but I registered because I had to throw this by the folks on this board.

A friend of mine told me he has been saving the older US pennies
(older than 1982, I think) because they were made out of mostly copper, where as the newer ones are made out of something else…zinc?

Anyway, he has been saving them and tells me they are worth more in copper than as money, and that he has buckets full of them.

I have a few questions:

  1. Is this just silly?
  2. Is it legal? (hoarding, possibly melting US money?)
  3. Is there a chance he may actually make a profit doing this?

He also says the government or the banks or someone has just started pulling the copper pennies out somehow. Anyone know anything about that?
:rolleyes:

He sent me this link, if it helps:
http://www.hoardingcopper.com

See this recent thread. However we will just go ahead ahead and proclaim this particular behavior nutty because I can’t see how smelting and selling the raw copper from your pennies is going to get your anything other than dirty. Eeking out small fractions of a percent on pennies simply isn’t worthwhile on anything but the largest scale.

There is NO government action removing these from circulation.

AS shagnasty has said, this is a low-profit endeavor.

About the profit thing, he told me once he does it mostly out of principle, because of something called Gorshom’s (Grosham’s? something like that) Law.

I have been keeping older coins for a long time, but not for the metal value. If I notice a wheat Penny, I toss it in a coin bank as worth keeping. I will keep almost any coin from before WWII if I notice its date. Just a habit and the assumption, that sometime in the future, one of those coins might turn out to be worth considerably more than its face value.
Saving copper pennies for copper value will not ever result in a windfall.

Jim

Gresham’s Law.

Copper recently hit $8,000 a ton.
A copper penny masses about 3.04 grams, so there are 298,416 pennies per ton.
Profit on the sale of a ton of pennies would thus be about (8,000 - 2,984) $5,016, minus the cost of sorting your change.
I suppose you could speed the process by rigging up an electromagnetic penny sorter, but there might not be enough copper ones left in the mix to justify the cost of the electricity.

Squink, you rock.

As I understand it (mind you, this isn’t a difinitive cite), the government started making copper-clad zinc pennies instead of full copper ones because the cost of producing a fully copper penny finally exceeded the value of said penny. So that’s where that comes from.

As to the laws…I believe there are laws about defacing US currency, but I’m not sure if those laws apply to coinage. We used to put pennies on railroad tracks all the time when we were kids, just to squash them out when the train went by…doesn’t mean it was legal, though.

Saving copper pennies for the copper is probably not worth the effort, though…unless you have truckloads of them.

(As a totally random aside, a friend of mine and I discovered when we were about 13 years old that you could cut a penny in half with bolt cutters. I don’t remember why that was important, but we were 13! It was COOL!)

Gresham’s Law.

Your friend is probably referring to a notion like the one expressed in this paragraph:

But a half-dollar is 50 times easier to amass than a penny. And the break-even price for silver was $1.39 per ounce or $44,840 per ton, which is 5.5 times greater than copper. So hoarding silver was 275 times easier than hoarding pennies.

This makes the practice inefficient, to say the least. From your choices, I’ll go with silly.

True but it still may be an option for charities and such that deal with tons of coin from small donations via donation boxes and such.

AFAIK copper and zinc are both non-magnetic. :dubious:

How would an electromagnetic penny sorter work?

Don’t know, but all the coin sorters that I’ve ever used were weight-calibrated. I (when a small child) had a robot bank. You could put the coins in the side of the head, and the pennies would go in one arm, the dimes would go in the other, and the nickels and quarters would fall into the legs (I might be misremembering that to some extent).

It was all mechanical, and you could see how it worked in the back. What I found was that once pennies started being made out of zinc (which is lighter than copper, weight-wise), they would fall into the wrong limb of the robot.

Thing would probably be a collector’s item by now if my mother hadn’t thrown it out…like lots of my stuff.

Eddy currents. You roll the coins down an incline and over a hole next to a big magnet. Copper is a better conductor than zinc, so it’ll be slowed more, and drop into the hole. Eddy current sorters are real things.

US Code Title 18, Chapter 17, Section 331

This US Code site was what the penny-squishing machine listed at Six Flags Great Adventure. Basically it means that you can’t mutilate a coin and still expect to pass it off as currency. But if you use the machine to press an image of Bugs Bunny into a piece of copper/zinc as a keepsake, it’s OK.

Right On! Thanks.
I once worked where there some BIG DC electromagnets that would induce currents in copper cups filled with LN2 such that you had to fight to twist them cup cross-field.
A falling copper piece would probably be deflected in that field.
Standing between the pole pieces (they were large) it would pull on the nails in shoes!

But is coinage the same as currency? I seem to remember from an old customer service job that it isn’t (or didn’t used to be), so that one was under an obligation to accept currency (paper money) in payment of a debt, but not coinage (as it was not legal tender). So passing a coin off as currency wouldn’t work, anyway (thus preventing a person from paying their debt with a wheelbarow of pennies). It was over 20 years ago, so it might not be true anymore, if it ever was.

Is it legal to pay a big debt in small change?

You say tons, but you probably don’t mean it literally. A literal ton of pennies would be an enormously huge amount (60,000 rolls), and ridiculously time-consuming to deal with, especially if someone had to sort through them for specific dates.

Sorting coins and delivering them to banks as they come in is a thousand times more sensible.

Expano Mapcase
Small nitpick - a ton of pre-1982 pennies would be about 6,000 rolls (which is still a pain in the ass to deal with).

Another problem not being taken into consideration is the copper purity of a pre-1982 penny. It is about 5% zinc. I do not think any scrap metal dealer would pay $8,000 per ton for 95% pure copper. House wiring which is nearly 99.9% copper (sorry no cite) commands a higher price but even then, the dealer wants all insulation removed. (A scrap metal dealer would find it easier to remove insulation from copper as opposed to removing zinc from it don’t you think?)

So, unless zinc has become incredibly valuable, we must deduct from the profit, the zinc-removal process, which is probably somewhat costly.