1-cent coin’s cost makes penniless U.S. possible

updated 2:45 p.m. ET July 2, 2006

PLYMOUTH, Mass. - In this village settled by thrifty Pilgrims, you can still buy penny candy for a penny, but tourist Alan Ferguson doubts he’ll be able to dig any 1-cent pieces out of his pockets.

He rarely carries pennies because “they take up a lot of room for how much value they have.” Instead, like so many other Americans, he dumps his pennies into a bucket back home in Sarasota, Fla.

Pity the poor penny!

It packs so little value that merry kids chuck pennies into the fountain near the candy store, just to watch them splash and sink. Stray pennies turn up everywhere: in streets, cars, sofas, beaches, even landfills with the rest of the garbage.

A penny bought a loaf of bread in early America, but it’s a loafer of a coin in an age of inflation and affluence, slowly sliding into monetary obsolescence.

For the first time, the U.S. Mint has said pennies are costing more than 1 cent to make this year, thanks to higher metal prices. “The penny is going to disappear soon unless something changes in the economics of commodities,” says Robert Hoge, an expert on North American coins at The American Numismatic Society.

That very idea of spending 1.2 cents to put 1 cent into play strikes many people as “faintly ridiculous,” says Jeff Gore, of Elkton, Md., founder of a little group called Citizens for Retiring the Penny.

A hard habit to break
And yet, while its profile of Abe Lincoln marks time in the bottom of drawers and ashtrays, the penny somehow carries a reassuring symbolism that Americans hesitate to forsake.

“It’s part of their past, so they want to keep it in their future,” says Dave Harper, editor of Numismatic News.

Gallup polling has shown that two-thirds of Americans want to keep the penny coin. There’s even a pro-penny lobby called Americans for Common Cents.

The Mint’s announcement is a milestone, though, because coins have historically cost less to produce than the face value paid by receiving banks. They are moneymakers for the government.

U.S. Rep. Jim Kolbe of Arizona wants to keep it that way. But when he asked Congress to phase out the penny five years ago he failed; he intends to try again this year. If he fails again, he joked recently, he may open a business melting down pennies to resell the metal.

For many, a ‘nuisance coin’
The idea of a penniless society began to gain currency in 1989 with a bill in Congress to round off purchases to the nearest nickel. It was dropped, but the General Accounting Office in a 1996 report unceremoniously acknowledged that some people consider the penny a “nuisance coin.”

In 2002, Gallup polling found that 58 percent of Americans stash pennies in piggy banks, jars, drawers and the like, instead of spending them like other coins. Some people eventually redeem them at banks or coin-counting machines, but 2 percent admit to just plain throwing pennies out!

“Today it’s a joke. It’s outlived its usefulness,” says Tony Terranova, a New York City coin dealer who paid $437,000 for a 1792 penny prototype in what is believed to be the denomination’s highest auction price.

“Most people find them annoying when they get them in change,” he adds. “I’ve seen people get pennies in change and actually throw them on the floor.”

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