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Makes Cents

A recent news item described the dilemma of the US Mint: It costs more than a cent apiece to make pennies.

Quelle surprise!

For 30 years pennies haven’t even been made of copper; they’re copper-plated zinc, as you can see when you pick one up from the street that has been run over. They were made of bronze (95% copper) until 1982. At today’s value of copper, ($3.88 a pound in late March), there is 2.5 cents worth of copper in one of those old bronze pennies. (A bronze penny weighs 3.11 grams, 146 bronze pennies weigh a pound.)

So copper was eliminated a long time ago, and now the cost to produce a zinc penny exceeds its face value. (It still doesn’t have a penny’s value of zinc in it. The raw material is just a small part of the total cost.)

Let’s help the Mint solve its dilemma. Let’s write our Congressman and ask him to take part in eliminating the useless cent.

Consider the history. In 1794, the United States minted its first dollars. Real dollars were coined using roughly an ounce of silver. In fact, the Mint still produces one-ounce silver coins stamped ONE DOLLAR, bearing the current year’s date. These, of course, are for collectors and for people who stockpile silver.

An ounce of silver today is worth about $35. Coincidentally, the prices of things today is about 35 times what it was 50 years ago. And what happened then? In 1964 the Mint produced its last money made of coin silver. I was 14 years old. I had a job and, when I could afford to, I would take a dollar bill to the bank and exchange it for a silver dollar. (And then I would spend them.)

When a dollar would buy 35 times what it will today, a penny would too. Back then it would buy what 35 cents will buy today. (Hmmmm… and just what will 35 cents buy today…?)

Why did we stop making silver coins?

Why, indeed…

Because when coins contained silver, and contained gold up until 1932, then money had intrinsic value – the coin was actually worth something. And the person who held the coin held the value in his hand.

This made problems for the federal government. The money supply was limited to the amount of precious metal that had been been placed into circulation. An economy based on debt, rather than value, could not be created until the people were relieved of the material that actually had value.

Starting in 1933, when gold was eliminated from circulation, reinforced in 1965, when silver was reduced (and eliminated by 1971), and sealed when the U.S. went off the gold standard for its currency in 1972, the United States, and perforce the rest of the world, concluded a tradition, as old as history itself, during which people used something of value as a medium of exchange.

Let that sink in. If you are over 40, in your lifetime a practice that dates back 5,000 years was stopped by the action of the Congress of the United States.

We now use paper notes, basically fancy checks printed by the government promising to pay the bearer in more fancy notes. And we use the cheapest possible metal chips to represent the coins that used to have value.

Copper has value, too. That’s why, in 1982, the Mint began making pennies of zinc. With the dollar as devalued as it is today – utterly without value, really, except for the faith of foreign governments in its stability -- it costs more than a dollar to produce a hundred zinc pennies.

When we use money, nothing of value is being exchanged by people purchasing goods and services.

The advantages to the federal government are two: The supply of money in circulation is no longer limited; more can be printed whenever needed to shore up some political design. And with the dawn of what might be called digital currency, the government can control any individual’s money with a keystroke, although a judge’s order might still be sought occasionally. Except for the federal reserve notes in your wallet, all of your liquid assets are yours by the grace of a respectful government.

So the Mint has a dilemma. And my answer is to stop producing pennies. In fact, it makes little sense to have any denomination smaller than a half dollar, or a quarter at the smallest.

If a dollar today is worth perhaps 1/35 what it was 50 years ago, and maybe 1/100 what it was 200 years ago, then a penny today may be worth 1/10,000 of a dollar of 200 years ago – (1/100 of 1/100).

But how would we make change? To simplify, suppose we stopped making pennies and nickels and let the dime remain as the smallest fraction of a dollar still in use. Your charge at the check-out counter would simply cut off the last digit. Two bags of groceries that cost $76.34 today would simply cost $76.3 instead – or $76.30 if you need to think in two decimal places.

Round up or round down? Would it matter?

You might ask how all the cash registers and vending machines now in use would cope.

Aren’t they almost all computers anyway? Reprogram them. And what would we do with all the pennies and nickels (and dimes, if they were on their way out)? Any revision like this would naturally have a phase-in period. Heck, federal budget cuts are phased in over decades, so only the next President or the one after that will have to deal with the effects. This could be no different.

Incidentally, and importantly as well: Kennedy half dollars were first made in 1964, the last year of regular silver coinage. For the next six years the silver content was reduced to 40%. Since 1971, half dollars have been minted every years, billions and billions of them. But we see them in circulation only when some aging die-hard like me gets a handful at the bank and hands them to puzzled young cashiers or waitresses. But, along with a dollar coin, they ought to be the most common pieces in circulation.

People began hoarding them when they first saw the silver content dwindling, and have hoarded the non-silver halves ever since in some mis-guided suspicion that they are worth something. They are worth no more than the few cents worth of copper that they are made of. Eliminating the useless minor coins could bring them out of hiding.

This is the solution to the Mint’s dilemma, but Congress thinks we are blindly attached to our useless and worthless pennies. We need to tell them we are not.

The silver dollar at the bottom has about $32 worth of silver in it, depending which day's market you look at, which means that the quarter and half dollar at the top, from the last year of silver coinage, have about $8 and $16 worth of the metal in them now. The 2007 dollar, in the center, is 88.5% copper, pretends to look like the 1910 ten dollar gold piece to the right of it, and is about the same size. It's also the same size and about the same purchasing power as the 1846 penny to its left. (Small pennies were first made in 1856.) So why does Congress permit the middle coin, which is really just a penny stamped with the word DOLLAR, to be divided into 100 smaller and utterly useless units?


Second Nature

When he was here not long ago, a visitor from Chicago, a complete city person whose shoes have seldom stepped off carpet and asphalt, remarked on some of what he saw at our house and in this part of Maine: pickup trucks, gun racks, wood piles, camps equipped with kerosene lamps and outhouses.  I realized then how easily we could forget that these sights are second nature for us, but not for most Americans.


A hundred years ago, pickups were still in the future, but the rest of what struck him unusual were familiar even to city-dwellers.  Not so any more.


We, who live with the contrast of a computer and a glowing wood stove in the same room, with snowshoes next to the insulated door, with gallons of wild blueberries beside the moose meat in the freezer -- we are not some throw-backs to lost centuries past.  We are the present, and future, in a region that the city-dweller will only dimly appreciate.


I am glad my friend made the comment, because it brought back to me the value of these things.  Yes, we have the advantages of what is produced in cities: movies and music, automobiles and books, convenience foods and fashions.  It would be easy to suppose that, without cities, we would not have symphonies and Subarus.  But it is also worth recalling that television was invented by a boy on a Utah farm, books are written by authors who can gaze out over Penobscot Bay, Subarus are made in rural Indiana, and inconvenient but infinitely more healthful food can be harvested in one's own back yard.


To get fiddleheads or wild raspberries means someone has to work for it and endure a few scratches and bug bites.  Perhaps we enjoy that work more than we would enjoy an urban job that pays a lot but stresses one more.  I am amazed that someone would prefer a metro bus ride to a walk in the winter woods, or an avant garde play to an evening of snapping beans.  I feel my family is more secure against global calamity for having an axe and 16-gauge than having deadbolts and a metropolitan evacuation plan.


Visit almost any house in rural Maine and you will find a staggering variety of tools and materials.  Within a small rural area, or small neighborhood in any Maine town, are the people and the skills to use those tools to build and maintain just about anything necessary to live simply.  This is also a phenomenon to urbanites, who, with their higher incomes, are accustomed to hiring things done or to letting the landlord take care of it.


If I let myself feel smug just because I have a garden plot and a garage full of useful culch I am no better than the city person who feels superior for having all the modern conveniences.  If not smug, though, I can at least be grateful to have settled in so beautiful and peaceful a river valley, to be surrounded by individuals so practically gifted as my friends and neighbors, and to have luxuries that the city person lacks: a pair of pileated woodpeckers on my back yard tree, homemade maple syrup, stunning sunsets, stars at night and total silence as I sleep, fish in the lake, more land and water surrounding me than I know what to do with.


There are other parts of the country, and of the world for that matter, where the people are as fortunate to live with their resources just as close at hand and their resourcefulness in demand - the deep South comes to mind first, the prairies, the far West.  The details vary but the phenomenon is the same.


We don't get to a fancy restaurant as often as our Chicago friend does, or see a concert or go to a professional ball game.  We do on rare occasions, but I'd rather undergo a long trip to get to these things than to get away from them.


So I celebrate where I live -- I suppose that's the word for it.  I don't feel stuck here. -- I choose to be here.  And I welcome any escapees from a metropolitan maze who make it across the river and into our quiet dooryard.  They will see our enthusiasm for living in Maine north of the 45th parallel.

A response from one of our site visitors:

March 22- "Kudos to you! I just bought a farm house in Enfield and am learning all about the things you talk about....How lucky we are, huh? I do a lot of traveling and I feel great sadness that some children and even adults don't know what it is to hear the loons call or how much fun as a kid it is to go and get all muddy because you were down by the lake fetching polliwogs or just the feelings of pure serenity/peace when you feel as though your the only one kayaking across a huge calm lake! Thank you for putting into words what it means to be a "Mainah" and why when someone in the city asks "where are you from?" with pride we say with a smile "Northern Maine!" : ) I look forward to reading more...Well done!" - Alicia



David Woodbury comes from the Farmington area, where his family has roots and where Fly Rod Crosby was a not-so-distant cousin.  According to local history, the first settler in what is now Lincoln, in the 1820s, was Aaron Woodbury, also a cousin, (but more distant).  Along with his wife, Beth, and son, Sam, David came to Lincoln in 2001 after more than 20 years with Great Northern Paper in Millinocket.  With a University of Maine degree in Wildlife Management, he is an active Maine Guide and promotes his writing and other enterprises at Comments on his column are welcome.  Just email This e-mail address is being protected from spambots. You need JavaScript enabled to view it . All Mark My Words columns copyright 2012 by David Woodbury.