PERSPECTIVES: Inflation Has Killed the One-Cent Coin

Where Goes the Lowly Cent?

By
James C. Johnston Jr.

Perhaps the possibility of no
longer minting the one cent coin is an indictment of our times and a
not-so-mute testament to the fact of our awful inflation. I have seen
people literally throw away one-cent coins, because they are such an
inconvenience to carry around in pockets in any great number and to
otherwise store. A very nice lady, historian, and published scholar,
whom I have known for more than half-a-century, suggested that I
write an article about the cent after my response to her bemoaning
the fact that this old small denominated friend may no longer be
minted by our government.

To do away with a circulating
coin is not at all a strange event in the history of our coinage in
the good old U. S. of A. There is a rather impressive list of United
States coinage that was made up of round disks of: silver, copper
[bronze], nickel, and gold no longer circulating in these United
States that once did good and specific duty as circulating specie in
this “land of the free and home of the brave”.

Well, that’s not exactly
true either. We have only been the home of the free since the passage
of the Thirteenth Amendment in 1865. For 246 years before that, we
were the home of legally institutionalized slavery, but that is
another story for another time even though this story greatly needs
telling lest we forget.

During the colonial period of
1607 to 1776, some colonies, including Massachusetts-Bay-Colony
minted their own coinage. In 1652, Massachusetts Mint Master John
Hull and his associate Robert Sanderson minted the famous “Pine
Tree Shillings”. Other silver coins featuring: the initials “N E”
for New England, the Willow Tree, and the Oak tree were also minted
about the sane time. The famed Brasher Doubloon was minted not far
from Washington’s New York residence in 1787. These coins, along
with European specie [gold and silver coinage] circulated as legal
tender until 1857 when Congress put an end to this practice.

It is interesting to note
that the coins minted by Hull and Sanderson all bore the date 1652
during all of the years that these coins were minted. The reason
frequently cited for this is that the colonials did not wish the
“Mother Country” to know what we were up to from the point of
view of our wealth and relative prosperity and exactly how much cash
we might actually have! It might be well to remember that
Massachusetts was pretty much on its own by virtue of benign neglect
by Jolly Old England at that time, and in fact, we were
all-but-independent as far as being self-governing.

England had been at war with
itself from the early 1640’s as King Charles I and Parliament were
fighting that “Great English Civil War” in a fierce contest to
see who would rule the troubled kingdom, King or Parliament. In 1649,
King Charles the First was physically separated from his head after a
trial in the House of Commons as a traitor to the nation. The
Monarchy was abolished and nominally Parliament ruled, but in
actuality Oliver Cromwell evolved into a dictator and after he
dissolved a corrupt Parliament, he ruled until his death in 1658. By
the way, as a historical note, Charles’ head was sewn back onto his
body for his burial. Now wasn’t that considerate as well as neat
and tidy!

When Charles I’s son,
Charles II, was restored to the throne in 1660, he had small pity for
the Puritans who had beheaded his father. Many of them had gone into
exile and self-imposed seclusion, and some had even gone to
Massachusetts Bay Colony where their co-religionists held sway. It is
true that during King Philip’s War, not only did England do nothing
to protect the English colonists in Massachusetts and Plymouth
Plantations, but Charles II was most likely cheering for the
Wampanoags!

Dealing with Britain’s
strange and complicated coinage, along with all of the other European
coins that were freely circulating, would have been a bit of a
headache for anybody doing business in those days, and Washington was
not anxious to keep the British system, and people like Thomas
Jefferson were great advocates of the decimal system. Our exotic
domestic coinage of the 1792-1873 period alone would have given most
of you a bit of a headache as you sorted out coinage from your purse
to settle up with the inn-keeper for lunch.

I taught with an older
gentleman whose father had been a doctor who died quite unexpectedly
during The Great Depression in the early 1930’s. Being about 19
years of age at this economically troubled time, he had been
expected to go out and make his own way in the world as his mother
was hard pressed to support his numerous younger siblings. This poor
guy, who was both highly intelligent and very sensitive, had not been
educated to such a hard life after living for nineteen years as an
upper middle class child of privilege.

He told me about his life in
episodic-vignettes over the space of several years. One day he began
talking about a very interesting incident which had involved him in a
bit of economic drama as we were walking down the halls of Franklin
High School between classes. He began his narrative with, “Around
lunchtime shortly after I was asked to leave home and make my own way
in the world, I found myself to be really hungry. I tried to regulate
my eating so that my money would last until I could get some more
work,” he told me, “and in 1932, there wasn’t much of that. I
went into a lunch-cart [diner] and ordered beans and ham. When my
bill came, I had to pay with coins from my coin collection, because
that was all of the money which I had left. I left the lunch cart,
and a few seconds later the large red-faced man who owned the
lunch-cart charged out onto the street screaming, “Hey Bub! What
the Hell are you trying to pull here?”

He bounded after me and
grabbed me by the shoulder and spun me around, “What’s this crap
you are trying to pass off as money? You own me thirty-five cents
American. Now hand it over Bub!” he roared in my face which was
practically nose-to-nose with his.

“That is American coinage,”
I told him, “These are two-cent, and three cent coins, and those
two little silver coins are half-dimes,” I explained.

He then went on raving, and
asking me if I thought he had just fallen off of a turnip-truck. Then
he continued his story, “It took me longer than I had spent eating
lunch to explain to this guy just what these American coins were, how
I came to have them, and the fact that they had a premium value over
their face value as collectible coins. Eventually he was convinced.
When I told him that I was sleeping in sheds and using my coin
collection just to keep me alive, he wasn’t moved by my sad
condition. In fact, he chuckled to himself that he had just had some
good luck in acquiring some interesting treasure and at my expense at
that. My frequent state of hunger did not seem to bother him in the
least as he walked off and celebrated his good fortune and possession
of these curious and previously unknown and scarce United States
coins.”

It was a sad story, and
provided me with an explanation; it explained to me the sometimes
quirky behavior and “odd-character” of this somewhat older man.
The Great Depression dramatically altered the lives of a lot of good
people and inflicted great psychological damage on many.

But it is quite true that the
United States once minted two and three cent coins and half-dines of
five-cent value. The two cent pieces were made of bronze and the
three-cent coins were first made of silver in the 1850’s and then
nickel beginning in 1865. Silver half-dimes were minted from 1794 to
1873 which was long run of almost eighty years. The three-cent nickel
pieces are very attractive in really high degrees of preservation.

About the same time, the
United States also minted twenty-cent coins of “The Seated Liberty”
design which were the same size and weight as French, Belgian, and
Swiss one-franc coins, and English shillings of that period of the
1870’s. However, this fact did not make the coin popular. Americans
kept confusing this coin with the slightly larger quarter dollar
resulting in a loss of five-cents in many transactions. And one must
remember that five cents was a somewhat considerable loss when you
consider the substantial purchasing power of that coin in the 1870’s
when the twenty-cent piece was both current and confusingly similar
in appearance to the slightly larger quarter-dollar.

The very first coins that
were minted under the Federal government in the capital city of the
United States, Philadelphia, were silver half-dimes in 1792 struck
from Martha Washington’s silver service! These coins were
originally called half-dismes when they were first minted, and within
a short time everybody called them “Half-Dimes” which they most
decidedly were.

Half-cent coins were struck
just before one cent coins in 1793 and continued with design changes
until 1857. By now, I think that you are getting the picture that
these abandoned coins are not missed by an adoring public. Gold
coins: in the form of dollar, two-and-a-half-dollar values, five
dollars, ten dollars, and twenty dollars don’t seem to be missed
either. People carried federal paper currency in preference to gold
coinage until gold was demonetized in 1933.

Imagine carrying three or
four hundred dollars around with you in silver dollar coins or even
in gold coins? Your clothing would hardly be up to the challenge of
pocketing all of that bulk and weight. Even Fifty dollars’ worth of
specie in your pocket would be a daunting prospect. It is interesting
to note that a twenty dollar gold piece which was legal tender until
1933 now has an intrinsic value of about $3,000.00 more-or-less
depending on the London Exchange-Market. That might be a hard-one to
get your head around. It sort of makes crypto-currency look like the
trash that I think it to be whereas it is backed-up by nothing
visible or by a sovereign government. It has worked out for our
president by making him billions of dollars richer in the last few
months so….If you want to try it, give it a shot. Let me know how
you make-out. I guess if I wanted to enter the Crypto Market, I would
call my “Coin” the “Jimmo”.

The point that I am making is
that there have been a lot of archaic coins, which for one usually
good reason-or-other, have passed from common usage eventually
without regret. I do not see the stoppage of minting the United
States one cent coin as a great tragedy. I am sure that these
one-cent pieces with my favorite president Abe Lincoln, on them will
be struck for both proof and mint sets sold by the U.S. Government
just to balance things off. Such things are not without precedent.

I shall confess to you that
I shall not miss the minting of the one cent piece. I shall say
goodbye to the pesky little thing, which costs more than a cent to
manufacture in the first place, sans regret. By the way, as added
note of non-regret, this country has not minted a “Penny” under
the Constitutional Period of our governance ever. Remember that the
“Penny” is an English coin struck for more than a thousand years
initially in fine silver in a ratio of 240 silver pennies to one
English pound of fine silver. If you understand English coinage, in
all of its crazy complexity as it existed until the new British
coinage of 1971, you should be very happy that we won the American
Revolution. If we had been so unfortunate as to have lost, you would
have had to have known that: a penny was made up of four farthings,
or two half-pence, and that two pennies were tuppence
[copper-cartwheel], and three pennies were treppence, four pennies
were a grote, and that 12 Pennies were a shilling, and 20 shillings,
or five florins, or four crowns were a pound and that 21 shillings
was a guinea! And by the way, there were also: quarter-guineas,
half-guineas, double-pound, five pound, and 4 shilling silver coins
that also come to mind , as well as one-penny, two-penny,
three-penny, and four penny Maundy sets to consider. Oh happy day
when we adopted the decimal coinage system back in Washington’s
Day!

Now does the abandonment of
minting the one-cent Lincoln coin look like such a big deal now? Now
in my eighty-second year, as I look at the two-cent cost to mint the
one-cent coin, I say listen to Charlie Darwin. He was right. Adapt or
become extinct! It’s always good advice. Remember that the “Good
Old Days” are mostly mythic!