The View From Here . . .
By Bob Morgan, Jr.

The issue certainly does not rank with the war on terror, fiscal policy or education but our country's quirky coin and currency system is certainly in need of rethinking.

Let's review the current lineup of coins and bills. The largest regularly circulating coin is the lowly quarter, which in the present day cannot buy a typical candy bar or newspaper. Fifty cent coins, which at one time were widely available, have been relatively rare since the advent of the John F. Kennedy coin in 1964, which was hoarded in tribute to the slain president. Dollar coins are also fairly unusual, despite successive efforts by the United States Mint to popularize the large and cumbersome Eisenhower dollar, followed by the Susan B. Anthony coin (which looked too much like a quarter), the brass Sacagawea coin and, starting this year, a series honoring the presidents. The vast majority of dollar transactions are effected using paper currrency, frequently well worn from overuse.

Meanwhile, pennies remain in circulation, despite being virtually useless. Many people have large drawers of pennies in a jar at home and machines now appear in supermarkets that offer to change loose coins into cash vouchers - for a fee, of course.

At the other end of the spectrum, although larger bills are theoretically legal tender, since 1969 the largest note circulated by the Treasury is the $100, which has lost much of its purchasing power.

Change number one should be to replace the dollar bill, which has a lifespan of about 18 months, with coins, which last about 25 years on average. This is the solution adopted virtually everywhere. For example, Canada has a one and two dollar coin and there are one and two dollar euros. Even Morocco, a relatively poor country, has a 10-dirham coin, worth about a dollar and Mexico has a similar 10-peso coin.

Second, the penny should be retired. According to a 2006 article in The New York Times, it currently costs about 1.4 cents to mint each penny (.8 cent for the metal and .6 cent for production costs) and there seems to be little value in keeping up production. In addition to being hoarded in jars, pennies create additional labor cost for retailers and banks and tend to slow down transactions.

Finally, I believe that consideration should be given to issuing a bill larger than $100. While large denominations were removed from circulation in an effort to thwart organized crime in the 1960's, one would think that competent criminals could rather easily get past this prohibition if they desired. Moreover, in the current era a $100 bill may or may not buy dinner for two and it is not really a "large" note. Even in this electronic age, there are occasionally times when sellers don't accept credit cards and don't want checks and other times when it is necessary to transfer cash. Larger bills, such as $200 or $500 (denominations that are available in euros) would help facilitate these occasional transactions.

There are other possible changes, such as increasing the size of banknotes as denominations increase or having different colors for each denomination. The bottom line, however, is that the Treasury and the Mint should take a careful look at our current coin and currency system and move it into the 21st century.