Bill Seeks Immediate Steel Cents, Nickels, Dimes, and Quarters

[madfranks]

They've been talking about it for years now, maybe it's about to actually come true?

http://news.coinupdate.com/bill-seeks-steel-cents-nickels-dimes-and-quarters-1952/

On April 25, 2013, Rep. Steve Stivers of Ohio introduced a bill in the House of Representatives which seeks to immediately alter the metallic composition of the one-cent, five cent, ten-cent, and twenty-five cent coins. The legislation would require all four coins to be minted in American steel, with the cent coated in copper to preserve the current appearance.

The bill H.R. 1719 has two cosponsors, Rep. Tim Ryan and Patrick Tiberi, both from Ohio, and has been referred to the House Financial Services Committee. Ohio is ranked among the top three states for steel production and processing.

The cent currently has a composition of 97.5% zinc and 2.5% copper and cost the United States Mint 2.0 cents to produce and distribute during the most recent fiscal year. The smallest denomination accounted for 64.2% of all circulating coin shipments in FY2012, with more than 5.8 billion units shipped to Federal Reserve Banks.

The five-cent coin or "nickel" currently has a composition of 75% copper and 25% nickel and cost the US Mint 10.09 cents to produce and distribute in the latest fiscal year.

The dime and quarter both have a composition of 91.67% copper and 8.33% nickel and each cost less than their respective face values to produce.

Although the text of the bill is not yet available, a press release from Rep. Stivers notes that the majority of the copper, nickel, and zinc used to produce the cent, nickel, dime, and quarter is imported from Canada. The bill would specifically require the coins be made of American steel going forward. The appearance of the coins would not change, just the materials used to make them. The press release states that according the the House Financial Services Committee, the United States would save up to $433 million over 10 years by changing the composition of the coins to steel.

In 2011, Rep. Stivers had introduced two separate bills seeking to change the composition of the cent and nickel to steel. Subcommittee hearings were held, but neither bill was voted on.

Under the Coin Modernization, Oversight, and Continuity Act of 2010, the United States Mint has been conducting ongoing research and development activities on alternative metallic compositions for circulating coinage. After the first two years of study, the Mint released its first required report to Congress, which had indicated that additional work was required before any recommendations could be made.

[vacuum]

Why not just re-value them? What's the point of having steel coinage?

[Twisted Titan]

The five-cent coin or "nickel" currently has a composition of 75% copper and 25% nickel and cost the US Mint 10.09 cents to produce and distribute in the latest fiscal year.



When you go to bank for a 2 dollar roll. You are actually getting 4 dollars.

Thats a 50% return on your investment tax free.

Try getting 5% on your 401k

[vacuum]

Thats a 50% return on your investment tax free.


It's actually a 100% return on investment.

[VX1]

Spend 'em quick, before they rust away! Also, keep them away from any open flames, or they will either vaporize or turn into molten liquid pools, much hotter than the original fire.

[Spectrism]

Copper & steel- dissimilar metals that will have a galvanic reaction- corrosion, when the two have an electrolyte between them. So, a scratch in the coating/ plating and a wet environment will destroy these coins.

[madfranks]

What's the point of having steel coinage?

Because the sponsor of the bill is from Ohio, and mandates that Ohio steel be used to make the coins.

[madfranks]

Copper & steel- dissimilar metals that will have a galvanic reaction- corrosion, when the two have an electrolyte between them. So, a scratch in the coating/ plating and a wet environment will destroy these coins.

Finally, a coin that will look and perform as inferior as it really is.

[ximmy]

Isn't this what the Romans did with their coinage?

[Sparky]

The five-cent coin or "nickel" currently has a composition of 75% copper and 25% nickel and cost the US Mint 10.09 cents to produce and distribute in the latest fiscal year.



When you go to bank for a 2 dollar roll. You are actually getting 4 dollars.

Thats a 50% return on your investment tax free.

Try getting 5% on your 401k


It's actually a 100% return on investment.

Actually it's zero return. The material cost (which you get) is 5 cents of metal. The remaining cost is for production. You don't get that.

[madfranks]

Actually it's zero return. The material cost (which you get) is 5 cents of metal. The remaining cost is for production. You don't get that.

Sparky makes an important point. Just because it cost the government 10 cents to make a nickel does not make said nickel worth 10 cents. In fact, according to coinflation, right now a nickel has only 4.57 cents worth of metal in it.

[Sparky]

Here's the part I don't understand: Nearly two years ago, the Treasury awarded a 2-year contract to investigate the best alloy to use for a composition change. This new bill specifically requires that the coin be made out of steel. Does this mean that the results are in from testing and that steel is the best choice, or are the sponsors of this new bill not even aware of the existing contract?

[madfranks]

Here's the part I don't understand: Nearly two years ago, the Treasury awarded a 2-year contract to investigate the best alloy to use for a composition change. This new bill specifically requires that the coin be made out of steel. Does this mean that the results are in from testing and that steel is the best choice, or are the sponsors of this new bill not even aware of the existing contract?

It's an independent bill, not related to the treasury study. In fact, the treasury issued a report saying that copper plated steel would cost basically the same as the current recipe of copper plated zinc. This bill is simply the Ohio representative looking for federal money to fund a local steel industry in his home state.

[Twisted Titan]

Sparky makes an important point. Just because it cost the government 10 cents to make a nickel does not make said nickel worth 10 cents. In fact, according to coinflation, right now a nickel has only 4.57 cents worth of metal in it.

So sayeth The Gubbermint

The Free market will price said nickles accordindly.

This is just a confirmation of Greshams Law playing out.

[Ponce]

Hey Agnut, another good one by Ponce hahahaahah........looks like my collect collection of the now coins that I have been saving since 1977 will be worth more than what ever they will come up with.

V

[mamboni]

Isn't this what the Romans did with their coinage?

Yes, they debased and we're debasing. In fact, our coins are already badly debased. They have to outdebase the previous debasement to achieve debasement sufficient to reflect the devaluation of the currency. It's sort of the coinage version of going to maximum potential greater than the previous potential until you can't get any higher potential and the top sucks from the bottom of all us hairless monkies who are trying to buy increasingly shrinking snickers candy bars with increasingly worthless rusting decomposing steel copper-clad slugs called nickels, dimes and quarters. I hope this explained it and answered your question and hopefully didn't shatter your cherished delusions.

Meow

[Sparky]

So sayeth The Gubbermint

The Free market will price said nickles accordindly.

This is just a confirmation of Greshams Law playing out.

If you are talking about looking forward, I wholeheartedly agree that the metal content for that $2 roll of nickels will easily exceed $4.

[Spectrism]

If they wanted to go the steel route... why not stainless steel? I know it costs a little more than iron or carbon steel but the alloy will hold up many centuries more than copper plated steel. Why even bother making pennies if this is the concern?

[Son-of-Liberty]

Canada stopped making pennies already and our currency is about the same as USD.

[madfranks]

Yes, they debased and we're debasing. In fact, our coins are already badly debased. They have to outdebase the previous debasement to achieve debasement sufficient to reflect the devaluation of the currency. It's sort of the coinage version of going to maximum potential greater than the previous potential until you can't get any higher potential and the top sucks from the bottom of all us hairless monkies who are trying to buy increasingly shrinking snickers candy bars with increasingly worthless rusting decomposing steel copper-clad slugs called nickels, dimes and quarters. I hope this explained it and answered your question and hopefully didn't shatter your cherished delusions.

Meow

Quoteth Ron Paul, "We can't even maintain the zinc standard". Ain't that the truth.

[drafter]

If they wanted to go the steel route... why not stainless steel? I know it costs a little more than iron or carbon steel but the alloy will hold up many centuries more than copper plated steel. Why even bother making pennies if this is the concern?

Probably for the same reason they keep jacking with reserve notes. It's less about counterfitting and more about designing "expiration" into the "product". They really don't care if it lasts because they'd rather you didn't use it in the first place. They'd prefer you used "plastic" to make all your transactions and relegate "cash", in any form, to history.

[Sparky]

Here's the part I don't understand: Nearly two years ago, the Treasury awarded a 2-year contract to investigate the best alloy to use for a composition change. This new bill specifically requires that the coin be made out of steel. Does this mean that the results are in from testing and that steel is the best choice, or are the sponsors of this new bill not even aware of the existing contract?

Apparently, the two-year study is completed, and is found to be inconclusive. Here's a summary article:

http://news.coinupdate.com/us-mint-reports-findings-of-alternative-coin-materials-research-1765/

Here's the complete report to the Mint. I'm going to go read it now...

http://www.usmint.gov/about_the_mint/PDFs/United_States_Mint_Report_2012_Biennial_Report_to_ the_Congress_on_the_Current_Status_of_Coin_Product ion_Costs_and_Analysis_of_Alternative_Content_Dece mber_2012.pdf

[Sparky]

Here are the key findings from the report. I've marked what I think are the most important points in bold:

1. The Mint constructed a dedicated R&D laboratory within the Mint at Philadelphia and conducted two series of test strikes and evaluations on 29 different formulations. The evaluations consisted of tests for hardness, ductility, weight, color, surface finish, coinability (ability to be struck into a coin), corrosion and wear resistance, electro-magnetic signature, supply chain availability, and cost.
2. CTC and the Mint conducted significant outreach to the public and other key stakeholders including the vending industry, the commercial coin processing equipment industry, laundromat operators, car wash operators, the armored car industry, the public transportation sector, the FRBs, and current coin material suppliers. Size, weight, and electromagnetic signature of the metallic coin alternatives were the principal attributes of concern for these stakeholders.
3. The vending machine industry estimates that the best and worst case cost scenarios to modify the vending machines in the United States to accept coins of the same size and similar weight as existing coinage but with a different electro-magnetic signature would be between $700 million and $3.5 billion, assuming a one-time, standalone, universal upgrade. CTC’s analysis includes consideration of the refresh and maintenance cycles of existing vending machines and places the conversion estimate at between $380 to $630 million.
4. Of the 80 metals on the periodic table of the elements, only aluminum, iron (used to manufacture steel), zinc, and lead cost less than the metals currently used in circulating coinage. For this reason, CTC and the Mint focused the alternative metals research on commercially available formulations of alloys and plated metals that use aluminum, steel, zinc, copper, and nickel.
5. When attempting to emulate current circulating coin attributes with those of potential new metallic alternatives, the electromagnetic signature was found to be the most difficult attribute to duplicate. With the exception of the one-cent coin, all current U.S. circulating coinage demonstrates the electromagnetic properties of copper.
6. At present, changes to the metals formulation of the one-cent coin would not yield significant cost improvements over the current formulation because the current market price of zinc is competitive with the prices of the credible alternatives, steel and aluminum.
7. For all denominations other than the one-cent coin, the current electromagnetic signature could be maintained with a slight reduction in nickel content, generating minimal cost reductions. Changing the electromagnetic signature potentially enables additional cost reductions that need to be confirmed with further research.
8. Additional production scale testing is required to confirm preliminary cost estimates of all the alternatives tested, including those which may not match the electromagnetic signature of existing coins.
9. Benchmarking against other global economies shows that providing industry with significant advance notice (two to three years) is a best practice before changing the metallic composition of circulating coins.
10. The Mint currently employs state-of-the-art coin manufacturing equipment and operates using similar production processes as other large, world-class mints around the world.

So, the bottom line is that they can't seem to find any cheaper alternatives that won't require a complete overhaul of the vending machine industry. I think the primary goal was to eliminate copper and nickel, but it turns out that copper is too important to remove because it defines the electro-magnetic properties relied upon by current vending machines. It looks like the penny won't change regardless, because apparently aluminum alloys and steel really aren't much cheaper than zinc. And any major change in electro-magnetic properties would take a few years of testing and advanced notice prior to actual implementation.

So it looks like nothing will change until 2016 at the very earliest, if at all, and it looks like the cupro-zinc penny is here to stay.

A couple of things strike me as baffling:

1) This report has been available since December, yet the new bill that is the topic of this thread got introduced anyway, totally ignoring the findings and recommendations of this study.
2) They could accomplish the most savings with the least pain by simply eliminating the penny. Yet they continue to refuse this stubbornly, yielding to the zinc lobby.
3) Savings could be even more substantial by eliminating the nickel. Seems unlikely if they can't even get past the penny.

[midnight rambler]

Copper & steel- dissimilar metals that will have a galvanic reaction- corrosion, when the two have an electrolyte between them. So, a scratch in the coating/ plating and a wet environment will destroy these coins.

This already happens with the zinc pennies.

[Twisted Titan]

Yes sir

I have seen zinc pennies get destroyed and the only thing that remains is the flashing of copper

[Spectrism]

This already happens with the zinc pennies.


Yes sir

I have seen zinc pennies get destroyed and the only thing that remains is the flashing of copper

I haven't seen it.... but if that is happening with zinc, multiply that by 100 for a steel penny. People will have rust stains in their pockets.

[midnight rambler]

I haven't seen it.... but if that is happening with zinc, multiply that by 100 for a steel penny. People will have rust stains in their pockets.

I've seen it happen to pennies left on the ground for a period of time as well as pennies retrieved from fountains.

[Ponce]

If they are made out of steel it would be easier to fish them out of the storm grates, in Miami a lot of them came out of the one right next to the bus stops with a retriever that I made......people could never understand how come I always had money.

V

[Sparky]

They minted steel pennies during World War 2. How have those held up? I don't recall there being problems with them.

But I suppose even if they held up, it still leaves the electro-magnetic issue for other coins. Pennies are a non-factor for vending.

It's irritating that they want to switch composition just because the coins are slowly beginning to have actual value compared to face value. Coins are our currency that closely resembles real money. Nickels are actually real money.

[Spectrism]

Steel pennies from WW2 held up if they were kept dry. I picked up a batch from an old woman selling her "junk" that were exposed to attic moisture. They are marred with rust.

Steel pennies also have a coating- except the edges. If the coating is not scratched or worn off, they are fine on the flats. The edges are the weak spots to start the corrosion.


Due to wartime needs of copper (http://gold-silver.us/wiki/Copper) for use in ammunition (http://gold-silver.us/wiki/Ammunition) and other military equipment during World War II (http://gold-silver.us/wiki/World_War_II), the United States Mint (http://gold-silver.us/wiki/United_States_Mint) researched various ways to limit dependence and meet conservation goals on copper usage. After trying out several substitutes (ranging from other metals[1] (http://gold-silver.us/forum/#cite_note-USPatterns_P2077-1) to plastics[2] (http://gold-silver.us/forum/#cite_note-USPatterns_P2073-2)) to replace the then-standard bronze (http://gold-silver.us/wiki/Bronze) alloy, the one-cent coin was minted in zinc (http://gold-silver.us/wiki/Zinc)-coated steel (http://gold-silver.us/wiki/Steel). This alloy caused the new coins to be magnetic and 13% lighter. They were struck at all three mints: Philadelphia (http://gold-silver.us/wiki/Philadelphia), Denver (http://gold-silver.us/wiki/Denver), and San Francisco (http://gold-silver.us/wiki/San_Francisco). As with the bronze cents, coins from the latter two sites have respectively "D" and "S" mintmarks (http://gold-silver.us/wiki/Mintmark) below the date.
However, problems began to arise from the mintage. Freshly minted, they were often mistaken for dimes (http://gold-silver.us/wiki/Dime_(United_States_coin)). Magnets in vending machines (http://gold-silver.us/wiki/Vending_machine) (which took copper cents) placed to pick up steel slugs (http://gold-silver.us/wiki/Slug_(coin)) also picked up the legitimate steel cents. Because the galvanization (http://gold-silver.us/wiki/Galvanization) process didn't cover the edges of the coins, sweat would quickly rust the metal. After public outcry, the Mint developed a process whereby salvaged brass shell casings were augmented with pure copper to produce an alloy close to the 1941–42 composition. This was used for 1944–46-dated cents, after which the prewar composition was resumed. Although they continued to circulate into the 1960s, the mint collected large numbers of the 1943 cents and destroyed them.[3] (http://gold-silver.us/forum/#cite_note-Street_Directory.2C_1943_Steel_Cent-3)
The steel cent is the only regular-issue United States coin that can be picked up with a magnet. The steel cent was also the only coin issued by the United States for circulation that does not contain any copper.[4] (http://gold-silver.us/forum/#cite_note-Headley_about-4) (Even U.S. gold coins at various times contained from slightly over 2% copper to an eventual standard 10% copper).

[madfranks]

They minted steel pennies during World War 2. How have those held up? I don't recall there being problems with them.

To the contrary, the steel cents did not hold up well at all, they quickly corroded from everyday handling. It was public outcry that made them change the steel back to copper. The steel cent is regarded by some numismatists as one of the biggest mistakes the mint ever made.

[Down1]

I think these bozos file this bill every year.
http://gold-silver.us/forum/showthread.php?57140-Legislation-Seeks-Steel-Cents-and-Nickels

They likey this word for some reason.
immediately

[Spectrism]

I vote that we get Hank Johnson to invent a new coin material.... maybe something renewable like water.

He can work with fellow brilliant men and stabilize frozen di-hydro-oxide.


http://www.youtube.com/watch?v=mnk0tIqsbYM