Ron Paul to hold hearing on the future composition of penny and nickel

[tsai3904]

[Video] Ron Paul hearing on the future composition of penny and nickel

Hearing entitled “The Future of Money: Coinage Production”

Tuesday, April 17, 2012 10:00 AM in 2128 Rayburn HOB

http://financialservices.house.gov/Calendar/EventSingle.aspx?EventID=289484

Video of hearing:
http://mfile3.akamai.com/65722/wmv/sos1467-1.streamos.download.akamai.com/65726/hearing041712.asx


Rep. Steve Stivers introduced two bills that will require the penny and nickel to be produced with steel made in America only (another Republican who doesn't understand the benefits of free trade).

Here's his press release regarding his bills:
http://stivers.house.gov/News/DocumentSingle.aspx?DocumentID=272778

 

[Zippyjuan]

The metal composition of some coins are limited because they must not only be the same size and weight but it must also have have similar "electrical" properties which is how some vending machines recognize a real coin from a slug or fake. Pennies are not used in vending machines anymore so using whatever metal for them does not matter- they could even reduce the size (if you haven't seen any of them, they greatly reduced the sizes of coins when the Euro was created- a penny is about half the size and a Euro coin is about the size of a US quarter).

http://en.wikipedia.org/wiki/Coinage_metals

Requirements for a coinage metal

Coins that are intended for circulation have some special requirements based on the conditions they will encounter. For example, a coin may be in circulation for up to 30 years, and so must have excellent wear resistance and anti-corrosion properties. Achieving this goal necessitates the use of base metal alloys. Some metals like manganese have occasionally been used in coins, but suffer from making the coins too hard to take an impression well (or metals apt to wear out stamping machines at the mint).

When minting coins, especially low denomination coins, there is a risk that the value of metal within a coin is greater than the face value. This leads to the possibility of smelters taking coins and melting them down for the scrap value of the metal. Pre-1992 British pennies were made of 97% copper; but as of 2008, based on the price of copper, the value of a penny from this period is 1.5 new-pence. Modern British pennies are now made of copper-plated steel. For similar reasons, American pennies (cents) were once made of copper alloys, but since 1982 have been made of copper-clad zinc.

This problem has led to nearly the end of use for a common base metal alloy for everyday coinage in the 20th century, called Cupro-Nickel (also cupronickel), with varying proportions of copper and nickel, most commonly 75% Cu 25% Ni. Cupronickel has a silver color, is hard wearing and has excellent striking properties, essential for the design of the coin to be pressed accurately and quickly during manufacture. However, due to cost reasons, in 2012 only the U.S. nickel among world coins has such a composition. In the 21st century with the prices of both copper and nickel rising, it has become more common to experiment with various alloys of steel, often stainless steel. For example, in India some coins have been made from a stainless steel that contains 82% iron, 18% chromium, and many other countries that have minted coins that contain metals now worth nearly the coin face-value, are experimenting with various steel alloys.

This might be a good time for the US to completely re- design the nickel and penny- including possibly making them smaller to keep metal costs lower for a longer time into the future.

 

[WilliamC]

The basic problem is that the value of the traditional coin metals, i.e. gold, silver, and copper, is now so inflated with respect to the dollar that it is not possible to recover the costs of using them as circulating currency by seigniorage fees alone; indeed all are so expensive that the base value of the metal is worth more than the face value of the coins.

Canada already dropped the penny, I can't imagine the US will keep one for long.

 

[tsai3904]

Video:

http://mfile3.akamai.com/65722/wmv/sos1467-1.streamos.download.akamai.com/65726/hearing041712.asx