In an effort to save taxpayers money, the federal government is making new money.
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.
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Proposed Liberty Coin
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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.
