In search of the elusive 20 cent coin

I was using the self-checkout at the Giant Food store on Arlington Road and noticed the example coins were the 5 cent, 10 cent, and 20 cent. I wonder who came up with that graphic. I know these machines also take dollar coins (and quarters) and won't accept half-dollars.

Pennies and Nickels

Pennies used to be made out of 95% copper and 5% zinc. Until 1982 that is. After that, they were made with 97.5% zinc and a copper coating. Why the change? cost cutting. Inflation made copper too expensive and zinc is much cheaper. Today, a pre-1982 penny has over 2 cents worth of copper in it. It is currently illegal to melt them down so there isn't much you can do with it. Some people do collect them and you can find them for sale on E-Bay as well as other places on the web. There have been times in the past where they have, for short periods, changed the composition, like in WWII when they made them out of steel. Zinc pennies only have about two thirds of a cent worth of metal in them.

There has been off and on talk about either making the penny out of a different, cheaper metal (like steel), or eliminating it altogether. How likely is it? I don't know, but I wouldn't be surprised to see them change the composition. I expect them to make pennies for a long time to come though. Probably people will stop using them by choice long before the mint stops making them, similar to what happened to the half-dollar. I have been to a number of stores that didn't give pennies as change, they just round up the amount the give back to the nearest nickel.

The U.S. nickel has never been pure nickel, it has always been 75% copper and 25% nickel, an alloy called cupro-nickel. For a few years in WWII there (1942-1945) they made some nickels with 35% silver. They currently have right around five cents worth of metal in them. A nickel weighs 5 grams and been has ever since it was first made in 1866. The introduction of the 5 gram nickel was shortly before the Metric Act of 1866 made the metric system legal in the United States. Canadian nickels used to be pure nickel, then they changed them to cupro-nickel, and now, they are plated steel.

Why dimes are so small

Ever wonder why dimes are so small and half-dollars are so big? The United States used to be on a silver standard (and some of the time a gold and silver dual metal standard). Most coins were made out of 90% silver (pure silver is too soft and wears down quickly) and dollars were backed by silver. You could turn them in and get silver back. Since a quarter has 2.5 times the value of a dime, it had to contain 2.5 times as much silver. A 50 cent piece had 5 times the silver of a dime and a dollar coin (the old, big ones) had 10 times as much. Pennies and nickels didn't have any silver in them so weren't constrained the same way (well, the nickel did for a few years in WWII) I'll cover them in a later post.

Since money was based on silver and gold, the government couldn't print money whenever it wanted, it first had to get silver or gold to back it. This was both good and bad. It was good in that you didn't have much inflation, the money supply couldn't increase faster than gold and silver were mined. During times of war, the government did go off the gold/silver standard and print extra money and there was inflation then, and a couple of times the government re-valued the dollar to be worth less gold or silver which caused inflation. It was bad in some ways too. As the country grew, more money was needed for day to day transactions. When the need for money was growing faster than gold and silver were being mined, there was a shortage of money which resulted in deflation (the cost of things going down). Also, in times of recession or depression, the government couldn't prop up the economy by printing money like it is doing today (some people see this as a good thing, others think it is a bad thing, time will tell who is right).

50 cents, a half dollar

Last month I picked up a few at the bank and decided to spend them around town. So far, I have spent them at a number of places in Montgomery County. One person commented she hadn't seen them in a long time, another person swapped them out for money in his wallet, the most amusing one was the person at Giant who looked at them hard for about 20 seconds then put them in the cash drawer, then, took them out again and looked some more. Everyone else has just taken them without comment.

You can join in too. Next time you go to your bank, ask if they have any. I'd love to see the half-dollar be a little less obsolete, at least in Bethesda. Post your experiences in the comments.

It doesn't have to be just a Bethesda, MD thing though, other Bethesdas can join. So can Rockville and Silver Spring if they want. In fact, lets open it up to the whole country. Hey everyone in the U.S., go get some 50 cent pieces and spend them!