Few Americans realize it, but there’s a stash of more than $1 billion sitting in Federal Reserve vaults that apparently almost no one wants.
Unused dollar coins have been quietly piling up in breathtaking numbers (see above photo), thanks to a government program that has required their production since 2007, according to NPR.
And even though the pile of coins recently passed the $1 billion mark, the US Mint will keep making more and more of the coins under a congressional mandate, it added.
“The pile of idle coins, which so far cost $300 million to manufacture, could double by the time the program ends in 2016, the Federal Reserve told Congress last year,” according to NPR.
The coins, which represent the third failed congressional effort to get Americans to embrace dollar coins in daily commerce, were the result of a 2005 legislative decision. These would bear the likeness of every former president, starting with George Washington, with one being issued every quarter.
So, far, the Mint has produced coins through the 18th president, Ulysses S. Grant.
“But as the new presidential dollar coins rolled out, the greenback lost none of its dominance in Americans’ hearts and wallets,” according to NPR.
Indeed, a big part of the problem lies with the fact that the US has never stopped producing $1 bills. Canada, for example, ceased production of its $1 bills in the 1989, shortly after it introduced its $1 coin, called the loonie, for the image of the loon on the front of the coin, into circulation.
With dollar coins replacing worn out dollar bills, the transition was relatively easy in Canada, so much so that our neighbors to the north phased out the $2 bill for a $2 coin in 1996.
The new coins were quickly accepted by the Canadian public, owing largely to the fact that the mint and government forced the switch by removing the $1 and $2 bills from circulation, according to Wikipedia.
It was easier for the bill’s sponsor, then-Rep. Mike Castle, Republican-Delaware, to move the presidential coin bill forward if it didn’t displace other dollar coins honoring Sacagawea, the guide to Lewis and Clark.
As a result, a deal was struck whereby the mint would be required to make a quota of Sacagawea coins. Currently, the law says 20 percent of dollar coins made must have Sacagawea on them.
So, there are now about 1.2 billion dollar-coin “assets” sitting in Federal Reserve vaults. By the time the presidential coin series finishes, and there are coins honoring all past presidents, there could be 2 billion.
NPR reports that some 2.4 billion dollar coins have been minted since the start of the program in 2007, costing taxpayers about $720 million. The government has made about $680 million in profit by selling some 1.4 billion dollar coins to the public since the program began.
(HT: Wrisley.com)
The Cotton Boll Conspiracy 
It appears we were both listening to the same broadcast this morning.
Apparently. And I was surprised by how indepth and detailed it was. Quite well done.
Sorry, but speaking as a long-time collector (50 years) with a lot of knowledge about the US coinage system, the NPR story was ANYTHING but well done.
First and foremost, the stories completely ignored the profit that’s made on each and every $1 coin produced whether it’s spent or not. That’s an economic concept called seigniorage and is at the heart of any nation’s coin and currency production.
Second, it ignored the _much_ higher costs to the economy resulting from continued production of the $1 bill. 47 other countries including all other major industrial nations long ago replaced their low-denomination notes with coins as cost-saving measures. The US on the other hand stands alone, with $1 bills making up over 45% of all production.
Various estimates dating back to the 1990s have pegged the cost of continued use of $1 bills at anywhere from $600 million to $1 billion per year. These costs include not just printing, but also disposal (an increasing environmental problem), the need for expensive bill acceptors on vending machines, the need to hand-process bills that aren’t in pristine condition, as well as “soft” waste like time spent feeding bills into transit fareboxes and other equipment versus simply dropping a coin.
Yes, people in other countries fussed when their bills were replaced with coins but inside of a few months everyone adapted, the world kept on turning, and life went on as if nothing had happened. It’s a sad commentary on our country that over a billion people in those other nations adapted, but the US, alone, isn’t capable.
Munzen – You make good points. Canada certainly had no problem transitioning to a $1 coin and doing away with the $1 bill, for example.
Of course, I think the move would be accepted much more quickly if the coins actually had some intrinsic value. Or aesthetic appeal. I too collect coins, and as far as I’m concerned the US hasn’t produced an attractive mass-produced $1 coin since the Peace Dollar was ended in the 1930s.