U.S. Mint to release new dollar coin: Chester Arthur
Latest in series of presidential coins will be available only to collectors paying at least $1.70. 4A.
WASHINGTON — Today, the U.S. Mint will release the Chester Arthur dollar — the latest in its series of presidential $1 coins. This one will be available only to collectors paying at least $1.70.
The Obama administration has suspended mass circulation of dollar coins after the government racked up a $1.4 billion surplus of them.
“Nobody wants these things, and if they don’t want them, we shouldn’t keep making them,” Vice President Biden said last December.
Internal government documents and interviews with former Mint officials suggest that government policies were partly to blame for the backlog.
-Overordering. During special “introductory periods” of new presidential coins, the Mint swallowed the shipping and handling costs for coins sent to banks, making it cheaper for banks to order them. A memo by U.S. Treasurer Rosie Rios last year estimated that 75% of all orders for coins came during those introductory periods, artificially inflating orders for new coins, even as banks were sending unwanted old coins back to the Federal Reserve.
“The Mint doesn’t just produce as many coins as it wants,” said former Mint director Philip Diehl; it makes coins to fulfill orders from banks.
In reports to Congress, the Federal Reserve has estimated that 40% of dollar coins were returned by banks. The Fed proposed building a $650,000 storage vault in Dallas and spending $3 million on armored cars to take the coins there.
-The ghost of Susan B. Anthony. The unpopular coin, first minted from 1979 to 1981, never really caught on. Consumers thought they looked and felt too much like quarters.
The banking system has never officially taken them out of circulation, so banks ordering previously circulated coins ended up with a mix of Susan B. Anthony, Sacagawea and presidential dollar coins.
-Credit card miles. The Mint, in an effort to get the coins directly to people who would spend them, offered them to consumers for face value with free shipping. The Mint abandoned the program after discovering that some customers were ordering the coins on credit cards to earn free airline miles, then depositing them in bulk at a bank.
Congress is considering a proposal to eliminate the dollar bill entirely and replace it with the dollar coin. The Government Accountability Office says the move could save more than $5 billion over 30 years because coins last longer.
Interests backing the dollar bill — including paper and ink manufacturers and armored car companies — have escalated their lobbying campaigns to fend off the coin.
Even coin advocates such as Diehl worry that the experience with the presidential dollar coins is helping make the case for paper dollars.