A billion dollars in unwanted American dollar coins sits in specially-made vaults the size of soccer fields in Texas and Baltimore and other undisclosed locations. They’re heavily guarded — according to NPR’s Planet Money team, even journalists must be watched carefully as they check out the “clear plastic bags piled high on sturdy metal pallets that looked like baby cribs,” 1,000 coins per bag, about 35 pounds a piece.
But why are they just sitting there? A recent example from my own life illustrates the problem.
A few weeks ago, I got a dollar coin as change from a farmer’s market stand. “I’m sorry,” said the cashier. “It’s all we have.” It was special enough to keep, but one day I needed $2.05 for the bus and could only find a dollar’s worth of quarters in a rush. Dropping that gold coin into the fare box may have been the last time I’ll see one of those for weeks — or longer.
Even though I love them (“No apology necessary!” I had said to that cashier, taking the legal tender eagerly), I seem to be in the minority — the demand for dollar coins over the past several decades has continued to underwhelm experts in monetary policy. The fact is, people just don’t want them.
And the demand — or rather, the lack of it — is one half of the reason those coins are just sitting in vaults, collecting dust.
The other half of the equation — the supply side — goes like this: Congress passed a law.
In 2005, Rep. Mike Castle — a Republican from Delaware who has since left office — sponsored The Presidential $1 Coin Act, a law that requires the U.S. Mint to create tender that displays “each former President of the United States on the dollar coin, in succession, for a 10-year period,” according to Rep. Carolyn Maloney, the bill’s co-sponsor.
So as not to mess with the good people of North Dakota, who claim Sacagawea as their own, the law also requires that one new Sacagawea coin must be made for every four Presidential coins or other dollar coins produced. And the new presidential coins made each year must be enough to “satisfy initial demand,” a different amount for each coin — an estimate that means another billion of the dollar coins will be protected by the time the Obama coin is made, in 2016 sometime.
But Americans just don’t like dollar coins, a mystery that economists and social anthropologists have never quite been able to figure out. It’s too bad: Dollar bills wear out in about 18 months, vs. 30 years for a coin, making coins far more economical for the mint (given the assumption that we’re not producing and protecting them in unwanted mountains).
Europeans have adopted and use coins for similar denominations. But Americans are nothing if not obstinate: Decades of trying to get the public to accept them and use them, up to and including recent expensive marketing campaigns, just won’t work. I like ’em; my kids like ’em. Sadly, this just isn’t enough to keep them out of their vault cribs.
The next presidential coin? Rutherford B. Hayes, followed by such popular, scintillating historical figures as James A. Garfield and Chester A. Arthur. Yes, there was a president named Chester Arthur. Will you buy his coin?