Kondracke: Dollar Coins Make Sense — but Public Rarely Sees Them
Every time a vending machine won’t take your dollar bill, you ought to plunk in a dollar coin. But, more likely than not, you don’t have one. [IMGCAP(1)]
And, more likely than not, you didn’t even know they existed — even though the government last week issued 170 million new gold-colored Thomas Jefferson dollars, the third in a series that will feature all deceased ex-presidents.
The new dollar coins are attractive, collectible and convenient — a lot easier to tote than rolls of quarters and accepted by most vending machines without quarrel.
They also represent a potential fiscal boon for the government because they cost 12 cents to make and they sell, of course, for a dollar. They also will remain usable for 30 years, versus 18 months for a dollar bill.
And yet they are not catching on. One reason is lack of adequate marketing by the U.S. Mint. Another is the chicken-and-egg reluctance of retailers to stock them because consumers don’t use them, and vice versa.
And then there’s the conspiracy theory: The Federal Reserve, which has to order them from the Mint and distribute them to banks, prefers the dollar bill (its very own “Federal Reserve Note”) and is contriving to torpedo the coin.
Coin advocates say the Fed is failing to send banks adequate supplies of new dollars so that consumers who want them often can’t find them.
And, with each new issue, the Fed is ordering and circulating fewer coin dollars, arguing — and ensuring — that demand for them doesn’t exist.
The Fed distributed 300 million George Washington dollars in February, 220 million John Adams dollars in May and 170 million Jeffersons this month. In November, it’s expected, there will be fewer still for James Madison.
If you go to a bank and ask for a Jefferson — as I did this week near Seattle — the teller is likely to say, “We’ve got them on order. They were supposed to be here last Thursday, but they aren’t.”
If you ask for Washingtons and Adamses, you can get them two ways — in rolls of 25 that are kept in a vault, or mixed up with predecessor issues, Susan B. Anthonys and Sacagaweas, at the teller window.
The Susan B. Anthony dollar, which looks like a quarter, was issued in 1979 and bombed — mainly because it looked like a quarter and both retailers and consumers hated it.
Congress authorized a new gold-colored dollar in 1997 and the Sacagawea was issued in 2000, bearing the image of the Shoshone woman who guided Lewis and Clark on their exploration of the Northwest in the early 1800s.
The Sacagawea dollar also largely bombed, even though its release was backed by a $67 million advertising and PR blitz that included co-marketing arrangements with Wal-Mart, Safeway, various transit agencies, vending machine companies and Cheerios.
The Fed ordered nearly a billion Sacagaweas in 2000, then only 88.5 million in 2001 and 30 million in 2002, after which the Mint stopped making new ones.
A Government Accountability Office report in 2002 declared that “until individuals can see that the coin is widely used by others and that the government intends to replace the dollar bill with the dollar coin, they will be unlikely to use the coin in everyday transactions.”
Other countries creating “high value coins” — including Canada, Japan, Australia and the United Kingdom — took equivalent bills out of circulation. The European Union issues one- and two-Euro coins and no bills under five Euros.
Even as it decided to try again in 2005 with the presidential golden dollar series, Congress was unwilling to phase out the dollar bill, seen by some as an important worldwide American “brand” and preferred by the public to heavier coins.
The GAO estimated that replacing the dollar bill with the dollar coin would save the government about $500 million a year. But a Gallup Poll this month showed that 65 percent of the public prefers the bill.
And, the poll showed, only 26 percent of Americans have ever seen a golden dollar. That’s partly because Congress also discouraged the Mint from mounting another expensive marketing campaign to sell it. The Jefferson was released with a ceremony at the Jefferson Memorial, but with little other fanfare.
The gold dollar deserves a bigger boost — including marketing links with Coca-Cola and Pepsi, whose vending machines are among the few that don’t accept the coins, an important exception.
Highway toll authorities and transit systems generally accept the coins — although not the Washington, D.C., and San Francisco Bay Area subway systems — and they should be enlisted. Municipal parking authorities are a natural, although most parking meters don’t take the coins yet.
Potential marketing partners also might include youth-oriented retailers, stimulating a learner and collector market that has made the new state quarter series such a success.
And somebody ought to say that a coin works better than a bill. The Treasury Department nixed such an ad in 2000 because it didn’t want to show a preference between products of the U.S. Mint and the Bureau of Engraving and Printing.
Vending machine operators should take out those ads now. After all, it costs them $1 billion a year to clear out dollar bills jamming their machines.