One Cent Law

The US Congress was asked to abandon change

The American cent in the future risks remaining only in the collections of numismatists. One-cent coins, commonly called “pennies,” it turns out, are no longer worth their cost, writes the AP agency. The US Mint, which produces coinage, recently stated that it already costs 1.2 cents to produce each penny. This sad result was caused by the rise in price of the metal used in coin alloys. Now the existence of one-cent coins has become economically unjustified.

The circulation of money, which, to paraphrase the words of O. Henry's hero, is not worth the metal from which it is made, apparently upsets many Americans. It turns out that in the United States there is even a small organization that has set itself the goal of destroying the penny - its name, with some irony, can be translated as “Citizens for Retiring the Penny.” AP quotes the head of this public organization, Jeff Gore, as saying that minting such expensive small coins is “a little ridiculous.” Another active opponent of cents, Republican Congressman Jim Kolb from Arizona, is even trying to officially ban the issue of pennies. Five years ago, he introduced a bill to Congress to stop the issuance of one-cent coins, but then the metal was cheap and the dollar was expensive, and this idea was successfully rolled out. But Mr. Kolb did not give up and already this year he revived his legislative initiative.

By the way, according to the US Mint, in the first five months of this year alone, just over 4 billion one-cent coins were minted in Denver and Philadelphia; in 2005, the issue of American pennies amounted to more than 7 billion 700 million pieces. Judging by the rate of production, the penny is now the most common coin in the United States: just over 3 billion 25-cent quarters were minted last year, 2 billion 835 million 10-cent dimes, and only 50-cent coins. 7 million 300 thousand pieces.

The large number of pennies produced may be explained by the fact that these pennies no longer have full circulation. The AP cites polling data from three years ago, when 58% of Americans told Gallup pollsters that they do not spend the nickels they receive in change, but instead put them in piggy banks or change jars. Then these savings lie idle for a long time: some people from time to time bother to hand over this metal to the bank, and 2% of respondents simply throw away these cheap rounds. And the mint continues to mint more and more editions of pennies, which immediately migrate from financial banks to canning jars.

The dream of getting rid of unnecessary and cheap little things from time to time visits legislators in various countries. For example, the Finns never saw the smallest euro cents: as soon as the single euro currency became cash, Helsinki announced that it was not going to spend money on minting 1 and 2 cent coins. All prices in Finnish stores immediately became multiples of 5 euro cents. The year before last, Belgium and the Netherlands made a similar decision, where the financial authorities also decided to get rid of small change. Coins in the 10th era, familiar to everyone from books about the Kid and Carlson, are a thing of the past. Neither Sweden nor Norway mint such small coins anymore - it is unprofitable and inconvenient. And only historians and numismatists remember that the Japanese yen once had its own “pennies” called sen. Long before the introduction of the euro, inflation ate up both Italian centesimo and Greek mites; many years ago, Turkish lira depreciated (before last year's redenomination, the smallest coins here proudly had the inscription: “50 thousand liras”).

However, our country does not lag behind global trends in terms of unnecessary trifles. Modern pennies have practically gone out of use: no one needs them either in the store or on the market. They continue to be used only in some pharmacies and Sberbank branches when paying utility bills. The change received there for change accumulates in wallets, then is raked out and lies like a heavy burden in children's piggy banks. The situation with the current five-kopeck coins is a little better: sometimes you can hand them in in pairs instead of ten-kopeck coins. A lone nickel in a Russian wallet is practically doomed: it can either be thrown away or, on occasion, floated into a savings bank. Only ten-kopeck rounds and other “yellow change” retain their real value, but they are also gradually losing popularity.

But the domestic Central Bank does not yet seem to be planning to abandon small coins, although the minting and distribution of “white change” throughout all regions of the huge country will probably cost it a pretty penny. However, the psychological effect plays an important role here: refusing practically depreciated change means indirect recognition of growing inflation. This brings to mind the times of the 90s, when the country almost instantly switched from kopecks, nickels and five-altyn coins to metal ruble coins. Saving the little things that are, albeit useless, present in our wallets somewhat reassures us: since there are kopecks, it means that rubles are still worth something. By the way, Americans who don’t count their pennies as money and put them in piggy banks are also not inclined to give up their change: according to AP, two-thirds of US residents surveyed still want to keep their one-cent coins in circulation.

Vladimir DZAGUTO