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TOM BEARDEN: The federal government has decided to try to save taxpayers money by making new money, a new $1 coin and 50 new kinds of quarters. Coins are cheaper to use than paper money. It’s because they stay in circulation thirty or forty years, while the average dollar bill wears out after just eighteen months.
Some estimates show that converting to dollar coins could save the Treasury $150 million a year, which is no small pocket change. But that means the public has to use the coins. In 1979, a Susan B. Anthony dollar coin was minted, but people didn’t use it because it looked too much like a quarter.
To avoid that confusion the new dollar will be gold in color, with smooth edges. The Treasury secretary will determine what design will appear on the coin. Coin experts, however, say a new look doesn’t ensure success. They argue that unless the government gets rid of the paper bill, the new dollar coin will suffer the same fate as the Anthony dollar. Jim Smith is a professor of money and banking at the University of Colorado at Denver.
JIM SMITH, Economist: Never in any country that I know of have you had a paper denomination and a coin denomination both simultaneous in circulation and both survive. One is going to drive the other one out.
TOM BEARDEN: But Congress refused to do away with the paper bill. In fact, it wouldn’t authorize the dollar coin unless the very popular paper bill stayed in circulation. Surveys show that 75 percent of the public prefers a paper dollar to a coin.
JIM SMITH: You end up putting them in your wallet. They stack very nicely. They’re light. With coins, you have them jingling in your pocket. I think it’s just a matter of convenience.
TOM BEARDEN: However, a tour of the Numismatic Museum in Colorado Springs, Colorado, shows the dollar bill hasn’t always been preferred. Curator Robert Hoge.
ROBERT HOGE, Curator: The United States legal tender $1 bill was introduced in 1862 and was not popular. In fact, they were discounted to the extent that people would only give 40 cents for them during the Civil War.
TOM BEARDEN: Why was that?
ROBERT HOGE: Because people didn’t trust paper money. We had a history of disliking paper, and it was due to the distaste of Americans from the colonial era and especially the Revolutionary War when we had had to fund the whole war effort with paper money, which was essentially worthless.
TOM BEARDEN: People valued the value of the metal in the coin, itself.
ROBERT HOGE: Exactly. Now, since 1964, of course, though, our United States coins have not represented intrinsic value. So they’re essentially metallic paper money, if you like.
TOM BEARDEN: There is one other controversy that will undoubtedly arise in designing the new dollar–what to depict on it. Many in Congress want an allegorical representation of liberty, a theme which has been on U.S. coins since the founding of the republic. But many other people think a portrait of a real person should be on the dollar. Hoge says that controversy is at least 200 years old.
ROBERT HOGE: Thinking back to George Washington, he probably would not have approved of this idea. He thought it was a monarchical practice because portraiture had been a symbol of sovereignty back to the time of the ancient Greeks. Roman emperors put their portraits on coins, for instance, kings of Britain, but good Americans would just have liberty, was the feeling, I guess, among the founding fathers.
TOM BEARDEN: Washington’s portrait didn’t appear on a coin until 1932, when a commemorative quarter was issued on the 200th anniversary of his birth. That coin was so popular it became the standard quarter with the Washington portrait on one side, an eagle on the other.
They make nearly 2 1/2 million of those quarters every day here at the Denver mint. In 1999, the design will change for the first time in 65 years. The front will stay the same, but the back side will contain a design representing each of the 50 states, starting with Delaware. The new coins are also a marketing device intending to attract new collectors. Interest in the possible designs has already sparked contests like the one held by a Wilmington, Delaware newspaper. The entries varied from the serious to the silly.
Some people in Illinois have urged that basketball star Michael Jordan should be on the Illinois coin. And some Kansans want a Wizard of Oz depiction. That’s unlikely to happen, though, since the legislation prohibits frivolous depictions and the Treasury must approve all designs. Nevertheless, Robert Hoge says he’s excited by the prospect of the 50 new quarters.
ROBERT HOGE: It’s marvelous. Nothing like this has happened in American history before. We believe that it will bring to public attention the intimate connection between numismatics–coins and related objects–in history, in civilization. We tend to take our money for granted, I think, in this country, but having this great variety of interesting little specimens out there coming into our hands is likely to call attention to the close connection between historical events and monetary systems, both things that maybe we hold dear.
TOM BEARDEN: But Prof. Smith says coins, themselves, may soon be a thing of the past; that debit cards that are used today are just the beginning of a new way of envisioning money. Smith predicts that for financial transactions of the future people will place their eyes or fingers on scanners, which will identify them and then authorize purchases.
JIM SMITH: Anything that will uniquely identify you so that the information will then be transmitted to your bank and your account will go down by the amount of your purchase. I don’t think it’s far off because the technology, which we have today, is coming on line. I think for large transactions you’re already seeing some of those things. And in the future I think ten years, ten to fifteen years, you will not have any currency at all.
TOM BEARDEN: Workers at the U.S. mint are skeptical of that. They plan to stick to their production schedule. The new dollar coin is expected by the year 2000, and all 50 designs for the quarter will be out by the year 2008.