bmy88 America Must Free Itself from the Tyranny of the Penny
The penny may seem like a harmless coin.
But few things symbolize our national dysfunction more than the inability to stop minting this worthless currency.
America Must Free Itself from the Tyranny of the PennySupported by
SKIP ADVERTISEMENTThe Great ReadAmerica Must Free Itself from the Tyranny of the PennyFew things symbolize our national dysfunction as much as this accursed coin, which we mint by the millions because it’s too worthless to spend.
By Caity Weaver
Caity Weaver is a staff writer for the magazine. For her reporting of this article, she visited the Treasury, the United States Mint, the Library of Congress, the National Portrait Gallery and the coin vault at the National Museum of American History.
Sept. 1, 2024I was disappointed to learn, recently, that the United States has created for itself a logistical problem so stupendously stupid, one cannot help wondering if it is wise to continue to allow this nation to supervise the design of its own holiday postage stamps, let alone preside over the administration of an extensive Interstate highway system or nuclear arsenal. It’s the dumbest thing I ever heard. I have come to think of it as the Perpetual Penny Paradox.
Listen to this article, read by Julia WhelanMost pennies produced by the U.S. Mint are given out as change but never spent; this creates an incessant demand for new pennies to replace them, so that cash transactions that necessitate pennies (i.e., any concluding with a sum whose final digit is 1, 2, 3, 4, 6, 7, 8 or 9) can be settled. Because these replacement pennies will themselves not be spent, they will need to be replaced with new pennies that will also not be spent, and so will have to be replaced with new pennies that will not be spent, which will have to be replaced by new pennies (that will not be spent, and so will have to be replaced). In other words, we keep minting pennies because no one uses the pennies we mint.
A conservative estimate holds that there are 240 billion pennies lying around the United States — about 724 ($7.24) for every man, woman and child there residing, and enough to hand two pennies to every bewildered human born since the dawn of man. (To distribute them all, in fact, we’d have to double back to the beginning and give our first six billion ancestors a third American penny.) These are but a fraction of the several hundreds of billions of pennies issued since 1793, most of which have suffered a mysterious fate sometimes described in government records, with a hint of supernaturality generally undesirable in bookkeeping, as “disappearance.” As far as anyone knows, the American cent is the most produced coin in the history of civilization, its portrait of Lincoln the most reproduced piece of art on Earth. Although pennies are almost never used for their ostensible purpose (to make purchases), right now one out of every two circulating coins minted in the United States has a face value of 1 cent. A majority of the ones that have not yet disappeared are, according to a 2022 report, “sitting in consumers’ coin jars in their homes.”
Advertisement
SKIP ADVERTISEMENTIt’s crucial that they remain there. Five years ago, Mint officials conceded that if even a modest portion of these dormant pennies were suddenly to return to circulation, the resulting flow-back would be “logistically unmanageable.” There would be so unbelievably many pennies that there most likely would not be enough room to contain them inside government vaults. Moving them from place to place would be time-consuming, cumbersome and costly. (Just $100 worth of pennies weighs a touch over 55 pounds.) With each new penny minted, this problem becomes slightly more of a problem.
The United States government has willfully ignored this nonsensical math problem for decades. Forty-eight years ago, in letters to Congress, William E. Simon, then the Treasury secretary, begged lawmakers to “give serious consideration” to abandoning 1-cent coins as soon as possible. The frantic tempo at which pennies were plummeting out of circulation, a Treasury report warned, would soon plunge the Mint into “a never-ending spiral” of “ever-increasing production” as it flailed to replace unused pennies with more pennies that would likewise remain unused — a bit like deploying a bucket to combat a dripping ceiling leak, and it turns out the leak is the ocean because the room was built under the sea, and the only way out of this anyone can think of is to engineer increasingly large buckets. The coin should be eradicated, the report reasoned, “no later than 1980.”
Twenty-five years ago, Philip Diehl, then the director of the United States Mint, stated that “two-thirds of the pennies produced in the last 30 years” — 1969 to 1999 — had “dropped out of circulation.” So even at a time when three-quarters of Americans’ payments were still settled with cash, pennies were not being spent. A 2022 Federal Reserve survey found that Americans paid with cash just 18 percent of the time. It’s impossible to know how many of those transactions might have involved coins, let alone pennies; the Fed doesn’t even try to track this. One thing we know for sure about America’s 1-cent coins, however, is that just one of them costs more than 3 cents to produce.
Why, in 2024, does our nation still spew out pennies like a two-liter in eternal agitation, gushing undrinkable fizz? The people I asked (government officials, numismatists, economists, scientists, scrap-metal industrialists, souvenir-elongated-penny machinists, historians, businesspeople, poverty researchers, Canadians) assigned blame widely: to an uninterested Congress; to highly interested lobbyists; to the sentimental; to people bad at math; to a populace willing to provide, in perpetuity, free private storage for pointless copper-plated tokens. (This last group encompasses every person currently possessed of at least one penny.) But the truth about why Americans are doomed to trudge eternally through a blood-scented bog of pennies-as-currency may be simultaneously the most dispiriting and encouraging reason imaginable: We may have forgotten that we don’t have to.
Advertisement
SKIP ADVERTISEMENTThe necessity of abolishing the penny has been obvious to those in power for so long that the inability to accomplish it has transformed the coin into a symbol of deeper rot. Eleven years ago, President Barack Obama called the penny “a good metaphor for some of the larger problems” of the U.S. government. “It’s very hard to get rid of things that don’t work,” Obama said, adding that eliminating the penny is something a president (for example: Barack Obama, 11 years ago) would “need legislation” for.
When Robert Whaples, an economist at Wake Forest University, published an article in 2006 about the imperative to eliminate America’s 1-cent coin, he received a personal note: “Get it done, and you will deserve the Nobel Prize!” The note was from Paul Volcker, the former chairman of the Federal Reserve, in which capacity he technically oversaw the annual ordering of billions of pennies from the Mint for distribution among the American populace.
“At the policy level,” Philip Diehl, who served as the 35th director of the Mint, from 1994 to 2000, told me by phone, “I think everybody agrees this is ridiculous.”
“I went to Congress saying, ‘Listen, I’m losing $90 million a year on pennies,’” recalled Edmund Moy, the Mint’s 38th director, from 2006 to 2011. “I said, ‘You guys need to pass a law forcing me to change it.’”
Steve Stivers, a congressman from Ohio’s 15th District, led multiple unsuccessful attempts to revise coinage laws while serving in the House from 2011 to 2021. (He hoped to enjoin the Mint to make pennies out of cold-rolled American steel, something they happen to produce a lot of in Ohio.) Stivers attributed his bills’ failures to “a reluctance to change, and this idea that we had to study every little thing before they would even think about a change.” He was particularly irked that a Mint-commissioned study on alternative cent compositions concluded, in part, that there would be no major savings if pennies were minted from stainless steel. “We weren’t proposing stainless steel, for God’s sake!” Stivers exclaimed from his office in Columbus. (He is now the president of the Ohio Chamber of Commerce.) “Stainless steel is a lot more expensive!”
Advertisement
SKIP ADVERTISEMENTI consulted Andrew Von Ah, who, as a physical-infrastructure analyst for the Government Accountability Office, has examined our physical-currency program in scrupulous detail and is better positioned than most to explain why the United States still makes pennies. “There’s no great reason why,” he said.
The recursive and maddening logic of penny-making is embedded in the coin’s very name. The value represented by what modern Americans now call “pennies” was counted by English colonists in “pence”; “pence” was a contraction of an older English word: “pennies.” Officially, American colonists followed the British system, which divided a pound into — sure, why not? — 240 parts. In practice, though, America’s “money” was a mutating mishmash incorporating Spanish silver dollars (known as “pieces of eight”; they could be physically chopped into — sure, why not? — eight equal “bits” to make change), beaver skins, tobacco leaves, wampum and (frequently worthless) slips of paper.
Years before America inaugurated its first president, Thomas Jefferson urged that the denominations of a nationwide currency be reconfigured until they were as moronically easy to understand as possible: Everything done by tens. In 1784, he proposed a dollar for the nation’s base unit, because Spanish silver dollars were so popular that people already understood how much a dollar bought. (As Treasury secretary, Alexander Hamilton recommended decimal coin names: “disme” from the Latin decimus for the one-tenth; “cent,” from centum, for the one-hundredth.) Spanish influence survives in our 25-cent piece, a denomination representing “two bits” — one-quarter — of a Spanish dollar. One or two bits — 12½ cents or 25 cents — were, for many years, “extremely popular” prices for little items like hairbrushes or handkerchiefs, says Jesse Kraft, a curator of American numismatics at the American Numismatic Society. Ultra-inexpensive stuff cost a couple of pennies — or would have, if there had been enough to go around. But a lack of small change circulating during the country’s infancy made it tricky to buy or sell individual items cheaply. So urgent was the crisis that the Mint was the first public building erected by federal law, on the site of an abandoned whiskey distillery in Philadelphia. It was guarded at night by a sword-bearing man and a “savage” dog (cost: $3) that no one but he was allowed to feed, lest it become sweet.
Image
Today pennies are still minted in Philadelphia and in Denver. The Mint’s official reason for minting pennies is that the Federal Reserve orders them. Specifically, the Federal Reserve “buys” coins from the Mint at face value and stores them in bags all over the United States for distribution to banks. I hoped to watch the birth of a new cohort of pennies in person, but a Mint press representative insisted to me that he and other Mint professionals had “no idea” when or where the Mint would ever be making pennies — that these people could not narrow it down by day, or even week, at either facility. Did this mean, I asked, that it was standard procedure at the largest coin-making operation on Earth (Philadelphia), which last year minted more than two billion pennies, to decide “day of” which of six possible denominations it was going to produce? “Yeah,” he said — though, to be fair, there is vanishingly little proof he was paying attention to what either of us was saying. (The press representative later clarified that the Philadelphia Mint does not decide which coins to produce “day of.”)
Advertisement
SKIP ADVERTISEMENTI gleaned more substantive details from a retired Mint spokesman: Tom Jurkowsky, who led corporate communications for the Mint from 2009 to 2017. Jurkowsky felt that, during his tenure, the public-relations strategy within the Treasury Department, which oversees the Mint, was to avoid drawing attention to the penny’s zombie survival. Officials dreaded public ire if a critical mass of Americans should ever notice the irrationality of the production statistics and come face to face with the truth: “How silly it is,” he said. “How much money it costs to produce pennies.”
Nearly every former federal official I interviewed about America’s interminable penny production pointed a finger at a small private company in Greeneville, Tenn., called Artazn. For 43 years, Artazn has held contracts with the Treasury Department to manufacture the zinc “blanks” that the Mint stamps into 1-cent coins. These contracts have earned it more than $1 billion in revenue since 2008 alone. Jurkowsky cited the company’s lobbying efforts as the No. 1 reason that coin-reform bills die in Congress. That may be true in terms of explicit dollar allocation, but political inertia has done even more to help Artazn’s cause, for free. According to the government transparency group OpenSecrets.org, since 2006 the company has spent less than $3 million — a charmingly modest amount — on coin-related lobbying.
Follow The New York TimesFind us on Instagram for the best of our visual journalism and beyond.Join our WhatsApp Channel for breaking news, games, recipes and more.Connect with us on Facebook to get the best of The Times, right in your feed.The story of the Artazn contract begins in an age of spiking copper prices: the early 1970s. America’s pennies, then still 95 percent copper, suddenly began vanishing — though not for the accepted reasons (worthlessness, pointlessness) pennies disappear today. These were vanishing because they had suddenly become valuable and even useful. The Secret Service confiscated a cache of cents from a General Electric plant in Kentucky, where they were being punched through and sneaked into appliances as cheaper substitutes for copper washers. McDonald’s paid customers to bring them in; at some locations, a person could trade in 100 pennies and receive a dollar, plus a dime and a nickel. Fearing endless cycles of hoarding and penny ransom, Congress sought a new base metal for the coins. It would have to be cheaper than copper. It would need to withstand the trauma of being near keys in a pocket (a condition researchers dutifully replicated by rotating coins and keys inside a cotton-lined drum). Because a portion of America’s children will, inevitably, swallow her currency, it should be detectable by X-ray.
The new coins, it was suggested, could be almost 98 percent zinc, with a copper coating to ensure that they still looked like pennies. The zinc industry loved this idea. The Copper and Brass Fabricators Council sued the Department of Treasury — unsuccessfully — to prevent its implementation. The camps clashed over whether the proposed coins would, essentially, self-destruct. Copper is exceptionally resistant to corrosion. In theory, then, a zinc object that is entirely and perfectly encased within copper will corrode slowly. But pennies’ thin copper plating is easily scratched — and, for esoteric but indisputable metallurgical reasons, exposed zinc that is adjacent to copper can corrode rapidly. “From a corrosion perspective,” said Suveen Mathaudhu, a professor of metallurgical and materials engineering at the Colorado School of Mines, “it doesn’t make much sense.”
Online forums whose bailiwicks are the diverse manifestations of humans’ eternal pursuit of shiny items (metal detection, coin collection, etc.) are littered with images of modern pennies disintegrating from the inside out. Gathered from backyards and beaches, they are pitted, covered in chalky scabs or possessed of an element foreign to most circles: corners. Some have holes clean through them. Aficionados employ a derogatory term for the post-1982 pennies that often resemble artifacts dredged up from Aegean shipwrecks. They call them “zincolns.”
Advertisement
SKIP ADVERTISEMENTWe were warned about all of this. In March 1981, an engineer from the Copper Development Association told Congress that the proposed apposition of copper and zinc in pennies represented “the worst possible arrangement” from a corrosion standpoint. Congress approved it anyway. But because the U.S. Mint, which had made all coins in-house since 1792, was unequipped to produce zinc discs electroplated with copper, the manufacture of penny blanks was outsourced. In July 1981, the Treasury awarded its first multimillion-dollar contract for this work to the metal and chemical division of the Ball Corporation, makers of the famous glass jars (crowned with less famous screw tops, made from zinc). Today’s coin-blanking operation is a division of a private-equity-owned portfolio company that was sold off after becoming part of a conglomerate after being spun off from a previous Ball subsidiary into an independent company; names along the way have included Ball Brothers Glass Manufacturing (in the 1880s), Jarden (named after jars) and, today, Artazn (climaxing with the chemical symbol for zinc).
Artazn largess has helped secure the URL “pennies.org” and finance the creation of the official webpage of “Americans for Common Cents,” a self-styled “organization” that essentially consists of just one man, a Washington lobbyist named Mark Weller. In Weller’s capacity as executive director of Americans for Common Cents, he has testified before Congress, been cited in government reports and written nationally circulated editorials. He declined to be interviewed for this article, but the arguments he makes in favor of continued penny production are well represented on the Americans for Common Cents website, an invaluable propaganda armory for penny-manufacture zealots.
The website’s “Penny Myths and Facts” page reproduces one of the organization’s most passionate assertions: “The penny aids charities in raising hundreds of millions of dollars each year for important causes.” I contacted the Leukemia & Lymphoma Society, which Weller describes as relying “significantly on small, yet critical penny contributions,” to inquire about its coin dependence. Coker Powell, the organization’s executive vice president and chief revenue officer, told me that the society has discontinued physical coin-collection programs, which had become increasingly costly. Donations of spare change had slowed in recent decades, she said. Fortunately, despite a dearth of pennies, the nuclear winter for charity forecast by Americans for Common Cents did not crystallize. Soliciting donations in the form of “roundups” (and add-ons) to credit-card transactions, Powell said, has proved “much more lucrative” than coin gathering ever did.
So who really needs these coins? The poor, Weller claims — “people with relatively low incomes (particularly the young, elderly and minorities),” who use cash more frequently than high-income earners; also, “‘unbanked’ Americans” who “have no other option.” Sociologists I consulted whose fieldwork examines the economics of American poverty challenged this notion. Carrying around “bundles” of hundreds of pennies to purchase, say, a beverage “doesn’t seem feasible,” said Jacob Faber, a professor at New York University who studies inequality. And the cashless economy has ballooned in the last decade. Sarah Halpern-Meekin, a sociologist at the Institute for Research on Poverty at the University of Wisconsin-Madison, told me that “the majority” of people with low incomes make cashless transactions — on apps like Cash App, for instance. Walmart, the nation’s largest private employer, pays employees who do not provide banking info with Walmart-branded debit cards. Plasma banks often distribute payments in the form of prepaid debit cards. It’s true that cash usage is highest among households with the lowest incomes; neither expert suggested that it was obsolete or unpopular. But if significant numbers of Americans rely on penny coins to make purchases, there is no evidence of it.
-If the importance of a money-furnishing institution correlates with the quantity of money it furnishes to the public, the U.S. Mint matters far less to Americans than the private company Coinstar, whose kiosks annually disgorge about twice as many coins into circulation as do government coin presses. Yet Coinstar not only exists but thrives — and not only thrives but is indispensable to the American money supply chain — solely because, every year, the United States elects to issue a portion of its currency in a format that a majority of Americans deem inconvenient for most uses: little metal discs. For a fee, Coinstar transfigures these discs into the other, more popular formats in which the bulk of U.S. currency is issued: paper bills or electronic payments. The setup works basically the same as if the United States issued a portion of its legal tender encased in an inch-thick layer of Saran wrap and Coinstar’s machines provided an instantaneous Saran-wrap-removal service that anyone could pay to use. Since debuting in 1992, Coinstar machines have processed over one trillion little metal discs of various denominations, worth a whisper under $67 billion.
Advertisement
SKIP ADVERTISEMENTSay an American upends a Big Gulp of coins worth $25 into a kiosk at a Fiesta Mart in Houston. Each dumped coin flashes before a sensor that, in a fraction of a second, analyzes its metal content; this compositional analysis reveals its denomination, which the machine tallies before plinking it into a bin at the kiosk’s base. After every coin has plunked, Coinstar takes a service fee (say, 12.5 percent) and maybe a transaction fee (say, $0.59) to return something like $21.28 in (mostly) bills. Over the course of roughly 22 days, about 550 pounds of loose coins will plonk into the belly of the Fiesta Mart kiosk, at which point — once it is at least 90 percent full — the machine will alert dispatch: Time to harvest the coin crop.
From Fiesta Mart, the coins are trucked to a regional processing center, where they are divided by denomination. Most end up inside enormous white cubes, called ballistic bags, many of which are distributed into locked cages designated by bank. When a ballistic bag of pennies is deposited into a, say, Bank of America cage, Bank of America sends Coinstar an electronic deposit equal to the value of its mammoth coin cube. Now say a store in Katy, Texas, needs pennies. It can call its bank, say, Bank of America, to request a delivery. Bank of America calls them up from the cube and has them sausaged into 50-penny rolls and dropped off. Upon arrival at the store in Katy, the rolled pennies are dumped into a compartment of a register’s cash drawer, where they will remain piled until they are handed over as change in a cash transaction — whence, statistically speaking, they will most likely find their way into another cup, cup holder or other theoretically accessible (but, in practice, rarely accessed) location. Counting their initial trip in the Big Gulp, these pennies will have changed custody five times, and taken multiple car rides, to facilitate the absolute least important part of one transaction.
The pandemic annihilated this cycle. Erstwhile commuters had no reason to feed coins into parking meters, bus fare boxes and tollbooths; even when they did leave the house, millions of people, determined to spend as little time as possible in enclosed public spaces, stopped pausing on their errands to redeem their change at Coinstar machines. Coinstar deposits dropped by 60 percent at the start of the pandemic. As a result, banks, which rely on Coinstar to choreograph the nationwide coin-recirculation ballet, received 60 percent fewer coins than usual. Signs soon bloomed along the windows and checkout lanes of American businesses, prevailing upon customers to pay with either credit or debit cards, or exact change, because of a nationwide “coin shortage.” In fact, the country still had all the coins it needed for making change. The problem was that they were sitting in jars and pockets and cup holders. Pennies, in particular, were not returning to businesses. This is because Coinstar is practically the sole medium by which the pennies churned out with trochilidine vigor by the Mint migrate around the United States.
Coinstar’s Kelly green kiosks could already be found in most major American cities when its current chief executive, Kevin McColly, joined the company more than 20 years ago. McColly’s job, he said, was to figure out “how to get to Scranton, Pa.; how to get to Chattanooga, Tenn.; how to open Alaska.” Today, 92 percent of Americans live within five miles of one of some 18,000 Coinstar machines. The early genius of Coinstar was that it charged people a little for something they could get for free: their own money, counted. Dealing with coins was enough of a hassle that people were willing to pay a machine to do it on their behalf. So, it turned out, were banks. Myriad financial institutions that previously processed customers’ coins directly, gratis, now outsource that time-consuming task to Coinstar. (Except in Minnesota, which McColly described as “historically a bad state” for Coinstar; owing to their ferocious commitment to Midwestern friendliness, he said, a disproportionate number of Minnesotan bank locations still handle coins for free.)
Image
But even people who bother to deposit the spare change they accrue — who represent only a portion of people who accrue spare change — are losing interest in redeeming 1-cent coins. Every year, McColly said, the value of the average Coinstar deposit creeps up, because people are depositing fewer pennies. Pennies still constitute the plurality of coins in a deposit — most recently about 49 percent of the average jar — but 15 years ago, the jars were more than half pennies. Pennies in any quantity occupy disproportionate space; at 49 percent of a jar, they contribute only about 6 percent of its value. For one person, that’s annoying. For Coinstar, it’s a major expense. Half the haul it’s schlepping from the Fiesta Mart kiosk — i.e., 225 pounds, out of 550 pounds of coins total — is just pennies.
Advertisement
SKIP ADVERTISEMENTCoinstar makes the same amount of money counting the same coins over and over as it does counting brand-new coins for the first time. It doesn’t help Coinstar if the Mint makes shiny pennies that no one troubles to keep track of; it’s much more important, for Coinstar, that people save (and then exchange) their coins. Nevertheless, if the United States simply stopped making pennies, McColly said, “there would be hardly any impact on Coinstar.” McColly has even proposed to people within the government that his network of machines could eliminate the hassle and expense of making new pennies, by helping existing ones circulate more easily, for a fraction of the production cost. “I’ve had very frank conversations with both the Mint and the Fed,” he said. “And they are so — I don’t know what the right way to say this is, because I know I’m talking to a reporter.” He paused. “It’s just not very efficient, how they manage that process.”
Americans accumulate pennies not because we desire them but because we are entitled to them. If we pay for something in cash with more than exact change, we expect to receive back the difference; if the difference ends in any number other than 0 or 5, we will receive at least one penny. We are entitled to pennies because they exist. But imagine a world where they didn’t. Imagine a world where it was Canada.
Many Americans will be surprised to learn that Canada eliminated its 1-cent coin more than a decade ago. Canadians are aware of this — how little Americans know of their world, and how bewildering it must seem in the rare instances we contemplate it. When I interviewed Canadians about their abolition of the penny, I often sensed from their responses that they were handling me gently. “Our country,” one official from the Royal Canadian Mint informed me with an almost apologetic smile, “is just as big as yours.” For all I know, he could be right.
Advertisement
SKIP ADVERTISEMENTCanada got rid of its penny in 2013 because it cost 1.6 cents to produce and had, like its American cousin, become essentially worthless. Here is the most important detail to understand: Canada eliminated only its physical coin, not the mathematical concept of 1 cent. Payment by credit card, debit card, mobile phone or check — any kind of noncash transaction — is calculated exactly as it was before the penny was abolished. If, after tax, a bill comes to, say, $20.11, a Canadian paying by credit card will be charged $20.11. A Canadian paying by cash can expect to pay $20.10.
The final digit of Canadian cash transactions is rounded to the nearest nickel: 1 and 2, nearest to 0 nickels, round down to 0; 3 and 4 round up to a nickel — 5; 6 and 7, also nearest to one nickel, round down — 5 again; 8 and 9, nearest to 10 cents, round up. I admit that the thought I might be asked to pay, say, $3.80 (cash) for something that, according to the laws of God and man, has been calculated to cost $3.79 (cash) is not only reflexively infuriating to me but a potential source of permanent confusion. The Canadian government mitigated one of those problems (no hope for the other) with an information campaign that included signs with simple charts dividing potential prices into two columns: “Round down” and “Round up.” I asked Karl Littler from the Retail Council of Canada if there were still signs at cash registers explaining the rounding. “It’s 10 years now, so even the most obtuse people have pretty much figured it out,” he said, and laughed.
Although they hardly ever use penny coins, fears of being deprived of one to two per transaction are a knee-jerk concern for Americans invited to contemplate a hypothetical world without them. Rounding opponents point out that a disproportionate number of prices end in double nines, e.g., a $5.99 gallon of milk. Retail legend claims that the “odd cents” pricing strategy (a Parisian trick imported by Rowland H. Macy to his New York City dry-goods store) proliferated after the cash register’s invention in 1879, as a tactic to prevent sales clerks from stealing. If a customer paid $3 for a $3 item, the logic went, a cashier could stealthily pocket the bills; if the price was $2.99, the customer would be owed a coin; to open the register, the cashier would need to key in the sale, thus creating, within the register’s hidden recesses, an incorruptible record of the transaction. That consumers tend to associate these prices with better deals (incorrectly, according to studies) was an added benefit.
But while it is theoretically possible that a retailer could see a surplus profit of up to 2 cents on every transaction, the number of variables that need to be precisely manipulated to pull off the feat would require such convoluted mathematical and psychological calculations that it stretches credulity to suppose anyone would bother.
In 2007, Robert Whaples, the Wake Forest economist, analyzed tens of thousands of transactions from a convenience-store chain to see whether cash-register totals would tend to be rounded up more often than down. “The last digit’s pretty random,” Whaples said. Averages worked out in customers’ favor about as often as they didn’t. But also, the gains and losses in question amounted, in the aggregate, to fractions of a penny either way, so why are we even talking about it? “I’ve yet to find somebody who’s off skiing in Gstaad because of the extra money that they made on the penny,” Karl Littler said.
Advertisement
SKIP ADVERTISEMENTAlthough Canadians were not required to cash in their cents, based on statistics from New Zealand and Australia (divorced from pennies since 1989 and 1992), officials anticipated that Canadians would choose to return lots of them. Explaining the transportation of more than 44 million pounds of pennies across Canada, rumored to be a quite large country, visibly tickles Anthony Rotondo, the Mint’s senior manager of domestic circulation. (The Royal Canadian Mint has achieved such international renown in coin production that about 80 other countries have paid it to make their coins. No other countries hire the United States to make their coins.) Trucking obsolete cents from financial institutions to their final recycling site required 1,200 trips in tractor-trailers. The penny metal was sold to help cover such costs.
At the recycling site, cents were deposited onto a conveyor belt. Plated steel pennies — minted in Canada for 12 years — flew up to a gigantic magnet, leaving only copper-alloy and copper-plated zinc coins behind. “Copper and zinc are very hard to separate,” Rotondo said; uncoupling them required “a special million-dollar machine” that creates a field of artificial gravity inside a tank, in which zinc floats and copper sinks. Canada’s pennies were mostly copper, “lucky for us,” Rotondo said. “Copper is typically worth three to four times what zinc is worth.” Were the United States to ever round up its pennies, our hoard would be predominantly zinc; since 1982, we’ve made about 2.1 billion pounds of them. Unlucky for us.
The words Canadian officials used to describe their recycling of, to date, nearly eight billion pennies are not ones typically associated with undertakings on the national scale in the United States: “success”; “very smooth”; “not an issue”; “a nice story.” But in addition to working with a population about one-ninth that of the United States, the Canadians had a hidden advantage. Their mint shepherds its coins through every stage of their life cycle: forecasting the need for them, producing them, distributing them, recirculating them and retiring them. In the United States, these responsibilities are divided among a hodgepodge of public and private entities. The wisdom of Canada’s system — in which the coin people handle all the coin stuff — was spotlighted during Covid lockdowns. The natural flow of coins was similarly interrupted across both countries: public-transit usage receded; reliance on self-checkout machines, which require up to three times the amount of coins to operate as standard checkouts, surged. But in Canada, there were no signs of any coin shortage.
Within the United States, it is accepted that the Treasury Department will relentlessly flood the penny-sogged nation with nuisance pennies until Congress passes a law to stop it from doing so. But how could such legislation ever, reasonably, be proposed? Pennies are not even important relative to other American minor coins, let alone in comparison to, for instance, the rights of man. Vaporizing every single penny would have virtually no effect on the amount of money we have in circulation. They are worth so little that almost no one I approached — including representatives for the entities that make and distribute them — was able, or willing, to discuss them.
Advertisement
SKIP ADVERTISEMENTCompounding this lack of interest is the sobering fact that the government would not necessarily save a fortune by not making pennies. Because it costs the Mint less than 10 cents to produce dimes, less than 25 cents to produce quarters and less than 50 cents to produce half dollars, when the Mint “sells” these coins to the Federal Reserve at face value, the payment it receives constitutes a sizable “profit.” This revenue, called seigniorage, is used to finance the national deficit; it reduces the amount of money the government would otherwise borrow, and the interest that would have been charged on that borrowed money. Pennies have “negative seigniorage,” as do nickels, though we produce many fewer nickels. (The hierarchy between the two manifests inside coin-operated machines, many of which still accept nickels but nearly all of which, since the 1960s, have been engineered to automatically reject pennies.)
In 2023, creating dimes, quarters and half dollars generated more than $433 million in revenue. Minting pennies and nickels ate away about $179 million of that profit. Even undiminished, however, $433 million would have represented less than a fraction of 1 percent of the government’s $6.13 trillion budget. At this scale, the question “Should we make pennies?” is, essentially, a personality quiz: Does the idea of losing money bother you enough that you feel compelled to stop it, even if the amount of money is trivial? Americans confront this question individually each time they receive pennies. Every penny deserted at checkout is a no. The government’s approach is the same as its citizens’. Sure, a person will eventually lose the price of a cup of coffee in left-behind pennies, and a nation will sacrifice enough money to install several hundred thousand reflective road signs that can be read at night. But if you can stomach the arrant waste, you are spared its contemplation.
“My sense,” said Jeff Gore, a professor of biophysics at M.I.T., “is if something is easy to do and it makes the world better, then we should do it.” Gore is the creator of what is now called Citizens to Retire the U.S. Penny, the inverse of Mark Weller’s Americans for Common Cents. Gore jokingly refers to his undertaking as a “grass-roots organization”; “the reality is it’s a website,” he said. He came up with it one night while killing time in his lab two decades ago. It hasn’t needed much updating.
“There are lots of problems in the world that are important and difficult,” Gore said, “but this is just not one of them.” To Gore, the dearest cost of penny production is not the money spent manufacturing and distributing the coins but that the cent “does the opposite of what currency is supposed to do” — facilitate transactions. “People think that because it exists and is used, it means that it’s useful,” Gore said. He compared the Treasury Department’s effect on the raw metals that compose a penny to a reverse Midas’ touch: “We’re taking something that is actually a valuable commodity,” he said, “something that has actual value, and then we’re converting it into something that people just throw away.”
Image
Advertisement
SKIP ADVERTISEMENTContemplating minor coins may be an arcane, practically pointless duty of the secretary of the Treasury of the United States, who is, based on the latest information available, Janet Yellen; nonetheless, as treasure-adjacent business, it is soundly, and legally, her purview. For months, via her staff, I begged Yellen for an interview. The secretary of the Treasury, I was informed, is “one of the most accomplished economists of our time” — a condition that evidently renders her unable to talk to me about pennies, even by phone, even for five minutes. She was busy; she was overseas. What was she doing there, I asked. She was meeting with green-business leaders in Germany.
I wanted to ask Janet Yellen if the United States needs pennies, because I believe that she may be the only human being whose answer matters: While consulting Title 31 of the U.S. Code (to see how much annual penny minting was required by law), I came upon a statute outlining general instructions for the apportionment of American coins. “The Secretary of the Treasury shall,” Section 5111 reads, “mint and issue” denominations of coins “in amounts the Secretary decides are necessary to meet the needs of the United States.” I reread the sentence several times. Groping for a light switch in a bolted room, had my fingers brushed over the knob of an unlocked door? Amounts the Secretary decides are necessary. What if the secretary decided the amount of pennies necessary was zero?
I contacted Christine Desan, a Harvard law professor who specializes in the constitutional law of money. I asked what she made of Section 5111. “The way it reads to me as a lawyer,” Desan said, is that “there’s nothing in here that indicates the secretary has to issue them.” No one I interviewed had mentioned this statute. In fact, every news article, government report and congressional transcript I read — as well as every person I consulted, including former Mint directors — appeared to assume that penny production could not cease until Congress passed a law halting it. But if this interpretation was correct, no law was needed. Or rather, no new law: In passing the statute, a previous Congress — a very, very previous Congress, now confined to the realm of history — had already declared that pennies could stop any time a Treasury secretary wished them to.
Does Yellen earnestly believe it necessary for the United States to issue billions more pennies every year? Her spokesman provided a general statement about coins, asserting that the Federal Reserve is in charge of determining the country’s coin needs. I asked if Yellen knew of any legal reasons Section 5111 could not be carried out as written; if she considers any factors other than the Federal Reserve’s coin orders when deciding what denominations are “necessary” in the United States; if she could comment on the Treasury Department’s own conclusion that hardly any of the billions of cents minted in the United States are spent by anyone — that they mostly just disappear, which is why the Federal Reserve needs constantly to order more, destined for the same fate. Days later, her spokesman replied: The Treasury relies on the Federal Reserve to determine the amount of coins needed; I should contact the Federal Reserve if I had any more questions. When I approached the Federal Reserve, a representative informed me that “any questions on coin” should, in fact, be directed to the Mint. The Mint, in turn, advised me to seek answers from the Federal Reserve.
Advertisement
SKIP ADVERTISEMENTIn May, I took a trip to Washington to visit Abraham Lincoln relics: the palm-size glass negative from Mathew Brady’s studio, on which his penny portrait is based; the Georgia marble colossus at whose feet — in memoriam, apparently — visitors deposit trash in the form of 1-cent coins. Our murdered president is a primary character in our nation’s story of endless penny production. If America’s deference to the penny can be imagined as a single vine, its curlicues knotted together in such density as to blot out all light of logic, the bullet that ripped through Lincoln’s skull is its seed. “You find out fast how much people care about coins the moment you start talking about removing” Lincoln, Philip Diehl told me. “All of a sudden, there are a lot of people who care about coins.”
Lincoln never expected his legacy would include being pictured on pennies until the end of time. At no point in his life had any president appeared on coins. It was American law, and tradition, that coins should not portray them. Congress decided this in 1792, when it created the Mint; putting rulers on coins was un-American — behavior that would “gratify our enemies.” U.S. coins obeyed this edict for more than a century, depicting, instead, abstract symbols “emblematic of liberty,” helpfully labeled “LIBERTY” (this is why it says “LIBERTY” behind Lincoln’s neck; legally, he can only appear on the coins if he is emblematic of liberty) until Theodore Roosevelt took office. Roosevelt had a habit of unilaterally replacing American coins he considered ugly — “artistically of atrocious hideousness,” to use his words — with designs he liked more. He installed Lincoln on the cent because he felt like it. He doesn’t appear to have run the idea by anyone.
Secreted behind a series of security doors inside the National Museum of American History is a vault of charcoal filing cabinets. The cabinets are nearly as tall as their custodian, Ellen Feingold, the curator of the Smithsonian National Numismatic Collection, under whose supervision the drawers can be unlocked to reveal hundreds of stacked shelves, each no wider than a penny’s height. The shelves pull out like oven trays, bearing honeycombs of miniature storage boxes. Inside this climate-controlled ventricle, the shelves and boxes preserve the money history of the human race over the last 3,000 years.
Monetary design, in Feingold’s telling, reveals more about a nation’s values than its monuments. “You could put a statue up, but the statue is in one place,” she said. “Most people will never go there.” Currency is unique: an everyday object, saturated with symbolism, of tremendous practical importance, that can find its way to every American, regardless of demographic. Because American money is intended for use by Americans, it’s natural that the way money functions in their real lives — the ways in which they actually do use it, not merely the ways in which it can, theoretically, be used — should dictate its configuration. It is, in fact, tradition to modify our currency based on majority preference. Recall how the persistent popularity of Spanish pieces of eight destroyed Thomas Jefferson’s decimalized dreams — dreams that, if strictly realized, would have denied today’s Americans their most-used coin, the (indivisible-by-10) quarter.
A permanent deference in our national currency design to the tastes and practicalities of a particular year — to that year’s president; to Teddy Roosevelt’s preferred pennies — “to me is ahistorical,” said Feingold, fresh off examining a pinky-nail-size ancient coin with gloved fingers. (Recall that when Roosevelt installed Lincoln on the cent, the coin was worth more than a quarter in today’s money.) This fact is inescapable in the coin vault, with its racks of wartime stamp currency and flimsy Depression-era tokens and centuries-old chits of paper insistently labeled “12 shillings.” American money — like, it is easy to forget, all facets of public life — can be anything Americans need or want it to be. It must not be a certain way simply because it has long been so. It does not have to be pennies.
Photographs by Jamie Chung for The New York Times
Read by Julia Whelan
Narration produced by Tanya Pérez and Krish Seenivasan
Engineered by Sharon Kearney
Jamie Chung is a photographer in Brooklyn who has shot nearly a dozen covers for the magazine. His work has been recognized with awards from American Photography and the Society of Publication Designers.bmy88