The Penny Should Not Be Eliminated From the United States Currency System Alison Richey
New Albany High School
This paper explores reasons why the penny should not be eliminated from the United States (US) currency system. In 2001 a legislation was introduced to Congress called the “The Legal Tender Modernization Bill” (LTMB). The Currency Overhaul for an Industrious Nation (COIN) Act was another attempt to eliminate the penny with. Important sources include the United States Mint and the Americans for Common Cents. The United States Mint is a producer and proponent of the cent. The American for Common Cents (ACC) is a pro-penny organization that educates people on the significance and usefulness of the penny. The Penny Should Not Be Eliminated From the United States Currency System The penny is the one-cent coin, worth one-hundredth of an American dollar, the lowest denomination coin of the United State currency. Pennies have been minted for over two hundred years, as the first penny the mint constructed was in 1793. Although the design and composition has changed abundantly throughout time, pennies have always symbolized the liberty and spirit of the United States. In 1793 pennies were made entirely of copper, but since 1983, when the cost of copper increased, they were made mostly of zinc. Currently the design of the penny displays the profile of Abraham Lincoln on the front and the Lincoln Memorial on the back, which honors him and represents the freedom of the country. The penny has been a significant part of American history, and has been used by many people for centuries. In 2001 Jim Kolbe proposed a bill to congress, the LTMB, to abolish the penny from the US currency system. He argued that the penny was not being circulated and that money was being lost by its production. He deemed the cent as obsolete and worthless, concluding that it should be eliminated from the currency system. The bill proposed that purchases be rounded to the nearest five cents on cash purchases (2001). Opponents of the bill argued that rounding would favor businesses at the consumer’s expense and that pennies are still being used. Then in 2006, Kolbe announced another attempt to eliminate the penny with the COIN Act. Neither of his attempts were a success, because the majority of Americans are still in favor of keeping the penny and find pennies useful. Other countries have found the need to eliminate their lowest denomination coin. In 1992, “Australia eliminated its one and two cent pieces after a surge in the countries’ consumer price index twenty years before eliminating their usefulness” (Zappone, 2006). This elimination of these pieces did not hurt their economy, nor did it negatively affect the poor. In 2012, the Canadian one-cent coin was eliminated from their coinage system. Since the coin was recently added in 2000, the elimination had no adverse effect of the economy. Other countries that have acted on the need to eliminate their lowest denomination coin include Mexico, the Philippines, New Zealand, Sweden, and India.
The Mint is Losing Money. “The cost of producing the coin has risen from .97 cent per penny in 2005 to 1.4 cents per penny. At that rate the Mint would spend some $44 million producing pennies this year, nearly $14 million more than in 2005” (Zappone, 2006). To say the least, pennies cost more to produce than the Mint is receiving in profit. If the Mint is not receiving a profit, what would be the reasoning behind continuing to produce them? Kolbe said in an interview, “When the price goes to 1.5 cents per cent then everybody will figure it out. Then everyone will hoard their pennies because the metal will be worth more than the coin” (Zappone, 2006). As of 2012, the coin was at 1.99 cents per cent (refer to Appendix A). Currently the penny costs 2.41 cents. The one cent no longer creates...
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