Cent (United States coin)
Encyclopedia : C : CE : CEN : Cent (United States coin)
The United States one-cent coin, commonly called a penny, is a unit of currency equaling 1⁄100 of a United States dollar. Its obverse has featured the profile of President Abraham Lincoln since 1909, the centennial of his birth. Since 1959 (the sesquicentennial of Lincoln's birth), the reverse has featured the Lincoln Memorial. The coin is .75 inches in diameter.
Despite the prevalence of the common term "penny", the U.S. Mint has never actually minted a coin for which this is the official name.
History of composition
| Years | Material |
|---|---|
| 2009 | bronze, according to the Presidential Coin Act of 2005 |
| 1982–2008 | 97.6% zinc, 2.4% copper |
| 1962–1982 | 95% copper, 5% zinc (about 3.04 grams) |
| 1944–1961 | bronze (95% copper, 5% zinc and tin) |
| 1943 | zinc-plated steel |
| 1864–1942 | bronze |
| 1857–1863 | 87.5% copper, 12.5% nickel (also known as NS-12) |
| 1837–1856 | bronze |
| 1793–1836 | copper |
The cent's composition was changed in 1982 because the value of the copper in the coin started to rise above one cent. Some 1982 cents use the 97.6% zinc composition, while others used the 95% copper composition. In 1943, at the peak of World War II, cents of zinc-plated steel were made for a short time due to war demands for copper. A few (the U.S. Mint reports forty) copper cents from 1943 were produced from the 1942 planchets remaining in the bins. Similarly, some 1944 steel cents have been reported. Following 1943, salvaged ammunition shells made their way into the minting process, and it was not uncommon to see coins featuring streaks of brass or having a considerably darker finish than other issues.
During the early 1970s, the price of copper rose to a point where the penny almost contained more than one cent's worth of copper. This led the Mint to test alternate metals, including aluminum and bronze-clad steel. Aluminum was chosen, and over 1.5 million of these were struck and ready for public release before ultimately being rejected. About a dozen aluminum cents are believed to still be in the hands of collectors, although they are now considered illegal, and are subject to seizure by the Secret Service. One aluminum cent was donated to the Smithsonian Institution.
The price of copper later returned to profitable levels. The Mint did not need to change the cent's composition again until 1982.
As of June 29 2006, the price of copper is $3.42 per pound and zinc is $1.50 per pound. At these prices, the pre-1982 copper cent contains 2.204 cents worth of copper metal; it is now potentially profitable to melt them down. Presumably with the rapid rise in price for zinc (more than doubled in the last six months), the US Mint will have to find another alternative. Just the scrap zinc in a cent is worth 0.9 cents. With the costs of manufacturing and distribution, the net cost to produce one cent is about $0.0123, significantly higher than the face value of the coin.
Designs
The coin has gone through several designs over its two-hundred year history. Until 1857 it was about the size of the current half-dollar coin.
The following types of cents have been produced:
- Flowing Hair Chain 1793
- Flowing Hair Wreath 1793
- Liberty Cap 1793–1796
- Draped Bust 1796–1807
- Classic Head 1808–1814
- Coronet 1816–1839
- Braided Hair 1839–1857
- Flying Eagle 1856–1858
- Indian Head 1859–1909
- Lincoln Wheat Ears 1909–1958
- Lincoln Memorial 1959–2008
Throughout its history, the Lincoln cent has featured several fonts for the date, but most of the digits have been old-style numerals, except with the "4" and "8" neither ascending nor descending. The only significant divergence is that the "3" was non-descending (the same size as a "0", "1", or "2") in the early history, before switching to descending for one year in 1934 and then permanently (as of 2004) in 1943.
The Lincoln Memorial is shown on the reverse of the United States penny. In his treatise Theory and Practise of Numismatic Design, Steve Crooks states that because the Lincoln Memorial is shown in sufficient detail to discern the statue of Lincoln on the reverse of the penny, Abraham Lincoln was the only person to be depicted on both the obverse and reverse of the same United States coin, up until the release of New Jersey state quarter in 1999, which depicts George Washington crossing the Delaware River on the reverse side.
Redesign
In 2009 the cent will get a one-year, four-coin commemorative program marking the 100th anniversary of Lincoln being placed on the cent (and the 200th anniversary of his birth). This redesign was passed as part of the Presidential $1 Coin Act of 2005, which also mandates that for 2009 only, the cent's composition be change back to what it was in 1909, which was bronze. In 2010, the cent will be completely redesigned, with a new, permanent design being released into circulation. Lincoln, however, will remain on the coin. The composition will return to copper plated zinc.Anti-penny efforts
Various commentators have suggested that the penny should be eliminated as a unit of currency. In 2002, for example, United States Representative Jim Kolbe of Arizona introduced a "Legal Tender Modernization Act" which would have stopped production of pennies.
Arguments for elimination
- Cost of production and soaring zinc prices — As of May 15, 2006, zinc prices have risen to 0.9 cents per penny (more than twice the cost of the previous fall). The government spends another estimated 0.6 cents minting the coin, therefore losing money every time it mints a penny. Moreover, the Mint's official estimates understate its costs by allocating too little of its overhead costs to pennies.[Coins cost more to make than face value], USA Today website May 10, 2006[Time to kill off the penny?] BusinessWeek, July 17, 2006.
- Distribution costs — The Federal Reserve incurs the costs of distributing pennies. A Canadian study suggests that these costs may be about 3 cents per penny.
- Lost productivity and opportunity cost of use — With the average wage in the U.S. being about $17 per hour, it takes about two seconds to earn one cent. Because of this it is not worthwhile for most people to deal with a penny. If it takes only one second extra for each transaction that uses a penny, the cost of time wasted in the U.S. is about $300 million per year.
- Limited utility — Pennies are not accepted by most vending machines, they are almost never accepted to pay a bus fare, and they are generally not accepted in bulk.
- Wrapping charges — Stores pay about 60 cents for each roll of 50 pennies.
- Gains from moving to a dollar coin — Eliminating the penny will free up a slot in retailers' cash drawers, which may facillitate the adoption of dollar coins. The Federal Reserve estimates that society could gain about $500 million annually by the switch to a dollar coin.
Arguments for preservation
- Profit — The Mint has historically earned about $20 million a year on pennies. Though many argue it currently makes a loss, pro-penny organizations still maintain it is a profit. [TOP TEN REASONS TO KEEP THE PENNY], Americans for Common Cents website
- Public demand — A poll conducted by Coinstar, who converts change into paper currency for a fee, showed 65 percent of respondents favored keeping the penny in circulation. ["Coinstar Press Release"], Official Coinstar website Feb. 10, 2006 However, a CNN poll found only 38 percent support for the coin. [link], CNN Money website Apr. 12, 2002
- Higher prices — rounding to the nickel would effectively raise prices. Raymond Lombra, an economics professor at Penn State University, estimates using simulations from convenience stores that rounding would force an annual $600 million "rounding tax" on consumers.[Statement of Raymond E. Lombra Before the Senate Banking Committee] It should be pointed out, however, that this amounts to a mere $2.00 per person per year. Subsequent research by Robert Whaples, an economics professor at Wake Forest University, using actual data on nearly 200,000 transactions from a multi-state convenience store chain shows that rounding would have virtually no impact. Consumers would gain a tiny amount -- about one-fortieth of a cent per transaction. [Raleigh News&Observer story]
- Targets lower class — will hurt those who can afford it least, the poor and elderly. Increased prices due to "rounding" would fall disproportionately on those least able to afford it. (This result is also contradicted by Whaples's findings. His data show that rounding is approximately zero at stores in both rich and poor neighborhoods.)
- Dependence of charitable causes — several organizations rely on donations from the collection of pennies.
- Consumer confidence — people are fearful their money may not go as far.
- Historical importance — the penny was the first coin authorized to be minted by the government and it has been an integral part of the American experience.
- Decrease dependence on copper — the penny is 97.5% zinc, and its removal might require more nickels. The nickel is 75% copper, and copper is less abundant than zinc. However, there are no data or any logical arguments to support the need for more nickels. Using probability, this argument can be proved false.
See also
- Coin Coalition
- Large cent (United States coin)
- Mill (currency)
- United States Mint coin production
- Take a penny, leave a penny
References
External links
- [The Composition of the Cent] from the U.S. Mint website
- [The Controversy over the Lincoln Penny]
- [Why does Lincoln face to the right?] - An article explaining why Lincoln faces to the right on the US Cent
- [Ban The Penny] (Forbes Magazine)
- [Should the penny go?] (CNN)
- [A pro-penny organization]
- [Man tries to get rid of million pennies, USATODAY/AP, 7/1/2004]
- [Not So Common Cents - shortage of pennies, FindArticles, August 16, 1999]
- [Citizens for Retiring the Penny]
- [Pennies Are Money]
| United States currency and coinage |
| Topics: Federal Reserve Bank | Federal Reserve Note | United States dollar | United States Mint |
| United States currency: | | | | | | 0 | Fake denominations |
| United States coinage: Cent | Nickel | Dime | Quarter | Half Dollar | Dollar |
From Wikipedia, the Free Encyclopedia. Original article here. Support Wikipedia by contributing or donating.
All text is available under the terms of the GNU Free Documentation License See Wikipedia Copyrights for details.