Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, July 4, 1990 TAG: 9007050180
SECTION: EDITORIAL PAGE: A-9 EDITION: HOLIDAY
SOURCE: JAMES J. KILPATRICK
DATELINE: LENGTH: Medium
Sen. Pete Domenici, R-N.M., and 28 colleagues have introduced a bill titled the United States Coinage Reform Act of 1990. At a public hearing on June 20, the senator testified in the bill's support.
The coin he has in mind would be minted in 1992. On one side it would commemorate Columbus' discovery of the new world; on the other it could honor space exploration. The coin would be made mostly of a copper alloy, but it would be gold in color; its edges would be as smooth as those of a nickel, and it would be the same size as the Susan B. Anthony dollar.
Two principal arguments support the bill. The first is convenience: "The $1 coin will be convenient for bus riders, for drivers parking at a meter, for those using vending machines, for the visually handicapped, for those making long-distance calls from pay phones, for those buying Sunday papers from street-corner boxes, and countless other purposes."
The second is an argument of savings. It costs about 2.6 cents to print a $1 bill. The bill has an average life of 16 months, after which it is shredded for trash. By contrast, the proposed coin would cost 6 cents to mint, but it would stay in circulation for 20 years or more. In a recent report the General Accounting Office estimated that the government could reap $318 million in savings every year, once the coin were fully phased in.
Domenici has support from the Coin Coalition, a group of 21 trade associations. He cites the favorable experience of other nations. Spain, Switzerland, Japan and Denmark have coins with a U.S. equivalent of more than $3. Our Canadian friends have accepted their 11-sided, gold-colored $1 "loonie" (it bears the image of a loon) with good grace. The British like their 1-pound coin.
Unlike a similar House bill, the senator's bill does not demand a phasing-out of the paper dollar, though he believes the idea has merit. Finally, the senator argues that his $1 "Chris" is so different from the ill-fated Susan B. Anthony dollar that no one should confuse the two. The affirmative side rests its case.
For the negative we turn to Donna Pope, director of the mint, and to L. Nye Stevens of the General Accounting Office.
Mrs. Pope is flat-out opposed to the idea. She finds little indication of public support. Indeed, a recent Gallup Poll found that 59 percent of the respondents opposed the idea. The public is especially opposed to outright elimination of the $1 note. Machines may like coins, but "people like bills."
Without substantial public support, the proposed "Chris" of 1992 would be doomed to the dismal fate experienced by the Susie of 1979. Half of the 857 million Susies remain in storage. If they were melted down, the U.S. Treasury would have to write off $415 million in bookkeeping "seigniorage." No one is yet proposing to get rid of the Susies, but no one wants the things either.
Stevens agrees. Speaking for the GAO, he contends that Domenici's new coin would be accepted only if the paper dollar were phased out in a reasonably short transition period. This is "crucial." Foreign governments, such as Great Britain's, can impose unpopular measures through the parliamentary process. The American Congress enjoys no such power.
Yes, says Stevens, the savings from a $1 coin would be substantial, but again, the savings would depend entirely upon withdrawal of the $1 note. Sen. Alan Dixon, D-Ill., who was presiding at the hearing, asked why the note and the coin could not happily coexist.
Stevens held his ground. If a customer offered a $5 bill to pay for a $1.25 purchase, would the customer want three Christophers and three quarters in change? An experienced cashier automatically would reach for three $1 bills to go with the silver. If there were no $1 bills, the change might come in the form of one $2 bill, one Chris and three quarters. The prospect, Stevens indicated, is not appealing.
The debate may be purely academic. At the time of Susie's debut 10 years ago, the treasury floated the idea of abolishing the $1 bill. Nearly 100 members of the House promptly ganged up on a resolution of opposition. The treasury crawled back in its vaults. Don't hold your breath until the affirmative side prevails. Universal Press Syndicate
by CNB