NEW BRITISH COIN COMPOSITION CALLED 'A DISASTER'

Changing the metal composition of any coin should only be accomplished with great care. The British Royal Mint is learning this the hard way.

A news story in today's Sunday Telegraph points to the proposed composition of a nickel coated steel where steel is replacing the price increasing copper in the nation's 5 and 10 pence coins. The new composition is magnetic and, it is rightly expected, to play havoc with the country's half million vending machines.

Like it or not, coins must be compatible with vending machines. In England 42 million pounds -- that's the amount of money, not weight -- of coins pass through this industry's machines every year. Such small cash transactions are vital to this industry, and, to take a futuristic view, to the very existence of coins themselves. If it were not for vending machines, all transactions would soon become entirely electronic.

Wake up collectors and numismatists! Support the vending machine industry and their desire to continue the use of coins, or future collectors won't have coins to collect from circulation!

The British proposal of replacing any coin metal with a steel substitute should be strongly considered by the U.S. Treasury Department. Don't use steel at all. Don't do it. England's problems would be multiplied five-fold here in America.

Instead, consider the far more intelligent solution of eliminating low denomination coins. For two reasons, it completely eliminates now and forever, the rising cost of any metal used in the manufacture of low denomination coins. Second, in an ever increasing economy, the purchasing power of low denomination coins are such their value becomes uselessly smaller in time.

The solution, which I have mentioned many times here in E-Sylum: abolish low denomination coins, replace with rounding transactions to a convenient value (as 10 cents), and strike higher value coins. Ideally the U.S. Treasury should stop striking the cent and nickel, and start striking $5 and $10 coins for circulation.

By press time there were 81 public comments to the Sunday Telegraph story. Some were political, some nostalgic about bygone coins and purchasing power, some about the unintended consequences of government actions, but some endorsed the elimination of the coins and adopting rounding. Bully for them!

Historically, the U.S. Treasury Department has made intelligent decisions about changing coin compositions. I have applauded the Treasury for such actions in the past as not endorsing the proposed Feuchtwanger composition for cents in 1837, to the copper coated zinc cent change of 1982. The former would have been a scrap metal nightmare when coins would have to be scrapped and melted. The 1982 decision is brilliant for the present scrap technology in that the melted copper-zinc composition could easily be transformed to brass.

Let us hope present Treasury officials are just as intelligent with the problems they face today with low denomination coins.

Read the Sunday Telegraph story. It is an eye opener!

To read the complete article, see: New steel 5p and 10p coins a 'disaster' (www.telegraph.co.uk/finance/personalfinance/consumertips
/banking/7979997/New-steel-5p-and-10p-coins-a-disaster.html)

Wayne Homren, Editor

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