Amazing Power of the Penny
By: John Shepler
What's that laying on the ground? There. See it? That small round object with the brown tint sends maybe 10,000 disadvantaged students to college. It supports a children's hospital, a church restoration, computers for grade school kids, preservation of the rain forest, one man's retirement fund and even research on a cure for leukemia. Incredibly, its presence in our money system adds $40 million to the government's income each year. Bend over. Pick it up. Add it to your own wealth. After all, a penny saved is, well, you know, a penny earned.
Who said that, by the way? Benjamin Franklin. In fact it was Franklin himself who suggested the design of the first one-cent coin and got our "pocket change" started. In 1787 a private mint struck the first U.S. penny, known as the Fugio cent. It was made of 100% pure copper. None other than Paul Revere himself would supply some of the copper used in making pennies during the early 1790's.
How many pennies have been minted since 1787? Take a guess and we'll see how close you come to the real total. Hint: it's more than THAT. Guess again.
Speaking of mints. The U.S. Mint was the very first Federal building to be erected by the government under the constitution. And they say money doesn't make the world go round. Those innocuous little pennies have changed hands in commerce through countless transactions over the years. Some people think that we should gather all the pennies together, melt them down to make electrical wire and just charge at least a nickel for everything. Well, there are at least two problems with that.
First of all, melting pennies to make copper wire might not work too well, electrically speaking. Today's penny is only 2.5 percent copper. The rest is zinc. Pure copper pennies were minted only until 1837. Then the composition changed to a copper alloy, which included 95 percent copper for most of the years until 1982. The composition used for the last couple of decades has a big advantage in that it only costs seven-tenths of a cent to make a cent. The three-tenths cent profit is called seignorage. A penny here, a penny there, and pretty soon it adds up the staggering sum of $40 million a year. That's $40 million that won't have to come out of your paycheck.
The other problem with getting rid of pennies and making the nickel the lowest denomination coin is that most everyone is going to round up not down. Anything that costs less than 3 cents isn't going to be free. It's going to be a nickel. Unless you count getting somebody's two-cents worth, which always seems to be free regardless of whether you want it or not. On a larger scale, store prices and bills will be rounded up to the next five cents. One report to congress pegged the cost to consumers at $600 million annually. Adds up, doesn't it?
Pennies just don't get the respect they deserve. It takes a real pile of them to buy what a thin dime will buy. Quite a few people unload their pockets at night and put those pennies in jars and piggy banks that won't head to the bank for years to come. As a result, some parts of the country are experiencing a genuine penny shortage. Stores and banks are pleading for change rather than bills. In extreme cases, they'll pay a dollar bill for something less than 100 pennies. Now, don't you wish you'd picked up those pennies in the parking lot instead of giving them a kick?
By the way, some pennies are really valuable. The rarest, with only four known to exist today, were minted in 1793. They're worth an estimated $275, 000 each. You're probably more likely to come across a 1943 penny in grandpa's money jar. If it is a real copper penny, you'll be holding a cool $80,000.
Eighty thousand bucks for a 1943 penny? What gives? You see, 1943 was a special year in that the U.S. was running short of copper for the war effort and minted pennies out of steel for that year only. But, while they were switching over the equipment at the mint, about 40 or so pennies were struck on copper blanks that had been left in the hoppers of the machines. So, if you find a 1943 copper penny, go ahead and yell "jackpot!" But before you count your riches, better see if that penny will stick to a refrigerator magnet. Real copper won't but a fake copper plated steel one will.
Oh, yes. I promised an answer for the penny quiz. How many pennies have been minted? Well, you've demanded change from your government and they've obliged with over 300 billion one-cent coins since 1787. Thirty million new ones are added each day, which accounts for two-thirds of all coins produced by the U. S. Mint. Unlike dollar bills, which seem to disintegrate just sitting in your wallet, an average penny lasts for 25 years. Sometime during those 25 years, the little cents may well become "pennies from heaven" for the many charities that collect and turn them into thousands and millions of dollars in good works. So, brother, can you spare a penny or two.
Books of Interest:
One-Minute Coin Expert by Scott A. Travers. One of the most knowledgeable and influential coin dealers in the world will teach you how to turn your pocket change into dollars. Do you have a 1995 Lincoln head penny with doubled letters in your pocket? It could be worth as much as $100! Learn how to take care of your treasure coins and make sure you buy and sell at the best price.
Striking Impressions; A Visual Guide to Collecting U.S. Coins by Robert R. Van Ryzin. Pictures and descriptions of all regular issue U.S. coins from 1792 thru 1992.
Edmund's United States Coin Prices 1999 by Edmunds Publications. An excellent reference for both novice and expert collectors.
Also visit Books-A-Million for an excellent selection of new books, magazines, e-books, audio books and more at low, low prices.
Also visit these related sites:
Americans for Common Cents - A broad-based coalition of business and charitable organizations dedicated to keeping the penny, this site includes facts and history of the penny, plus results of a recent survey about whether to keep or eliminate the penny.
The U.S. Mint tm - This is the federal agency that makes all of the coins for the United States. You can read the history of our coins, learn about the new 50 State Quarterstm , purchase commemorative coins and more from their online shop and even download a screensaver of the 50 State Quarterstm.
Pennies For College - If you don't think that little pennies add up, read how one ingenious student funded his entire college education.
Copyright 1998 - 2018 by John E. Shepler. Contact me at: John (at) JohnShepler.com
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First Published: August 23, 1999 as part of A Positive Light