By Louis Golino on November 30, 2012 9:18 AM
On November 29 the Domestic Monetary Policy Subcommittee of the House Committee on Financial Services, which is headed by outgoing Chairman Ron Paul, held a hearing on “The Future of Money: Dollars and Sense” that examined in detail the issues surrounding the replacement of paper dollars with coins and some related issues concerning coins.
The main highlights of the hearing were as follows. The U.S. Mint reported that circulating coin production increased substantially over the past year, while numismatic and bullion coin sales decline sharply.
The Government Accountability Office
reiterated its conclusions from February of this year that replacing
dollar notes with coins would save $4.4 billion over 30 years but added
some qualifications to its analyses based on issues such as the cost to
ramp up production of $1 coins in the aftermath of the move last
December to stop producing these coins except for numismatic sales.
The Canadian Mint’s chief operating officer drew from her country’s experience with dollar and two dollar coins and coins made of multi-ply plated steel as well as cutting-edge coin production technologies.
Former Mint Director Philip Diehl made the case for replacing dollar notes with coins, drawing from his experience when the Sacagawea coins were launched in 2000, while former Office of Management and Budget Director James Miller made the case against dollar coins, and Mark Weller explained why cents should be made of steel.
Witnesses for the first panel included Acting Director of the U.S. Mint Richard Peterson, Lorelei St. James, head of the physical infrastructure team at the Government Accountability Office, and Beverly Lepine, the chief operating officer of the Royal Canadian Mint.
Acting Director of the U.S. Mint, Richard Peterson, discussed the decrease in revenue in the Mint’s numismatic and bullion coin programs, the research and development program the Mint has been using to explore metallic alternatives to the current metals used in circulating coinage, and said that in December the Mint will issue its first annual report on the findings of the R&D program, which is a result of provisions in the Coinage Modernization, Oversight, and Continuity Act of 2010.
Circulating coin production increased 24% over the past year from 7.4 to 9.2 billion coins. It has grown 20% a year over the past three years since a low reached in 2009 at the height of the recent economic crisis.
Despite
the fact that the cost to produce the penny and nickel “exceeded their
face values again, just as they have for each of the last six years,”
circulating coinage production costs decreased 25% over the past three
years through the use of greater efficiency in production. Director
Petersen also noted that seigniorage [which is the difference between
the face value of a coin and the cost to produce and distribute it -LG]
was positive for fiscal year 2012.
He did not provide specifics on either seigniorage or the cost to make pennies and nickels, but these will presumably be included in the Mint’s annual report to congress for the past fiscal year, which should be available soon.
As far as bullion sales, the Mint sold 788,000 ounces of gold and 34.1 million ounces of silver, but net income decreased 57% “because of lower volumes and pricing.”
The Mint held meetings with its network of authorized purchasers to assess market trends and discuss “more effective and efficient bullion coin operations and to improve communication between the Mint and the private sector.”... More
On November 29 the Domestic Monetary Policy Subcommittee of the House Committee on Financial Services, which is headed by outgoing Chairman Ron Paul, held a hearing on “The Future of Money: Dollars and Sense” that examined in detail the issues surrounding the replacement of paper dollars with coins and some related issues concerning coins.
The main highlights of the hearing were as follows. The U.S. Mint reported that circulating coin production increased substantially over the past year, while numismatic and bullion coin sales decline sharply.
The Government Accountability Office
reiterated its conclusions from February of this year that replacing
dollar notes with coins would save $4.4 billion over 30 years but added
some qualifications to its analyses based on issues such as the cost to
ramp up production of $1 coins in the aftermath of the move last
December to stop producing these coins except for numismatic sales.The Canadian Mint’s chief operating officer drew from her country’s experience with dollar and two dollar coins and coins made of multi-ply plated steel as well as cutting-edge coin production technologies.
Former Mint Director Philip Diehl made the case for replacing dollar notes with coins, drawing from his experience when the Sacagawea coins were launched in 2000, while former Office of Management and Budget Director James Miller made the case against dollar coins, and Mark Weller explained why cents should be made of steel.
Witnesses for the first panel included Acting Director of the U.S. Mint Richard Peterson, Lorelei St. James, head of the physical infrastructure team at the Government Accountability Office, and Beverly Lepine, the chief operating officer of the Royal Canadian Mint.
Acting Director of the U.S. Mint, Richard Peterson, discussed the decrease in revenue in the Mint’s numismatic and bullion coin programs, the research and development program the Mint has been using to explore metallic alternatives to the current metals used in circulating coinage, and said that in December the Mint will issue its first annual report on the findings of the R&D program, which is a result of provisions in the Coinage Modernization, Oversight, and Continuity Act of 2010.
Circulating coin production increased 24% over the past year from 7.4 to 9.2 billion coins. It has grown 20% a year over the past three years since a low reached in 2009 at the height of the recent economic crisis.
Despite
the fact that the cost to produce the penny and nickel “exceeded their
face values again, just as they have for each of the last six years,”
circulating coinage production costs decreased 25% over the past three
years through the use of greater efficiency in production. Director
Petersen also noted that seigniorage [which is the difference between
the face value of a coin and the cost to produce and distribute it -LG]
was positive for fiscal year 2012.He did not provide specifics on either seigniorage or the cost to make pennies and nickels, but these will presumably be included in the Mint’s annual report to congress for the past fiscal year, which should be available soon.
As far as bullion sales, the Mint sold 788,000 ounces of gold and 34.1 million ounces of silver, but net income decreased 57% “because of lower volumes and pricing.”
The Mint held meetings with its network of authorized purchasers to assess market trends and discuss “more effective and efficient bullion coin operations and to improve communication between the Mint and the private sector.”... More
