Melting Coins Now Illegal In the U.S.

A number of readers have noted the action by the U.S. Mint to outlaw the melting down or bulk export of coins. This has come about because the value of the precious metals contained in coins now exceeds their face value. The Mint would rather not have to replace pennies (at a cost of 1.73 cents per) or nickels (at 8.74 cents). The expectation is that Congress will mandate new compositions for some U.S. coins in 2007.

Comments

If this keeps up...

[KingSkippus]

If this keeps up, .002 cents really will = $.002

(Sorry, but it had to be said...)

Re:If this keeps up...

[abe ferlman]

If I had a nickel for every time I heard that one...

Re:If this keeps up...

[dgatwood]

.05 cents? Let us know when you've reached 20 and maybe somebody will send you a penny for your thoughts. :-D

Re:If this keeps up...

[YrWrstNtmr]

Those are illegal. It's just that no one actually cares enough to enforce it.

It's only illegal if you intend to use/distribute them as 'money'. Novelty items are OK.

(Text as of 2/19/02) 18 U.S.C. 331:
Whoever fraudulently alters, defaces, mutilates, impairs, diminishes, falsifies, scales or lightens any of the coins coined at the mints of the United States, or any foreign coins which are by law made current or are in actual use or circulation as money within the United States;

Re:If this keeps up...

[basscomm]

From the US Mint FAQ (emphasis mine)

60. Is it illegal to damage or deface coins?

Section 331 of Title 18 of the United States code provides criminal penalties for anyone who "fraudulently alters, defaces, mutilates impairs, diminishes, falsifies, scales, or lightens any of the coins coined at the Mints of the United States." This statute means that you may be violating the law if you change the appearance of the coin and fraudulently represent it to be other than the altered coin that it is. As a matter of policy, the Mint does not promote coloring, plating or altering U.S. coinage: however, there are no sanctions against such activity absent fraudulent intent.

Re:If this keeps up...

[Sparr0]

Getting rid of pennies has nothing to do with getting rid of cents. The two are distinct. Most banks already handle transactions down to the 6th decimal place. My bank account at any given time could have a certain number of thousandths of a cent in it. The only time it has to be converted into coins is when I withdraw it. Getting rid of the penny just means that physical money transactions have to be rounded. The same thing happened when we got rid of the 1/2 cent piece. When you buy something and the total comes to a non-nickel-aligned amount, it gets rounded. Easy, simple, any idiot can handle the math.

Re:If this keeps up...

[sholden]

Australia manages just fine.

You just round to the nearest 5 cents. If something costs $13.23 then you end up paying $13.25 if you pay cash, if it costs $13.27 then you also pay $13.25 if you pay cash. When paying by EFTPOS (think swiping your debit card in the US) or credit card or cheque (think check it the US :) you pay to the exact cent. Actual prices are still specified to individual cents, the rounding is done on the total purchase not on each individual item.

It works perfectly well, sure you can get 2c worth of free petrol (gas...) by putting $40.02 in the tank, but no one does because it's 2c... Sure you could try buying 2c (or 7c) worth of petrol over and over again, but no one does that either because it's retarded.

Just because you remove something from cash transactions doesn't mean you change the "base" of your currency - to claim that is just being moronic. Amazingly Australia didn't collapse, the banks didn't have a field day with "false" interest rates, in fact the only thing that changed is you don't end up carrying 10kg of coins at the end of the day...

Inflation means that a penny now is a *much* *much* finer resolution on prices. People managed perfectly well 50 years ago with a much coarser price scheme... Seriously who gives a stuff if something costs $12.32 or $12.33 - can you even tell the difference at the end of week?

Re:If this keeps up...

[Bloke down the pub]

Most banks already handle transactions down to the 6th decimal place. My bank account at any given time could have a certain number of thousandths of a cent in it.

I've worked in the USA, Europe and the UK. I've never had a bank account with more than 2 decimal places. What's more, I work on business & accounting software, and the only times I've seen that use a resolution finer than what's available in the local currency is for highly specialised functions - and even then, it's only for internal, intermediate calculations.

To put it another way: I call bullshit.

Re:If this keeps up...

[technothrasher]

've worked in the USA, Europe and the UK. I've never had a bank account with more than 2 decimal places. What's more, I work on business & accounting software, and the only times I've seen that use a resolution finer than what's available in the local currency is for highly specialised functions - and even then, it's only for internal, intermediate calculations.
 
You really need to get out more. Gasoline, cheap electronics parts like resistors, mutual fund values... lots of stuff is accounted for at greater than 2 decimal point accuracy.

Re:If this keeps up...

[crlove]

My bank account takes those little remainders and puts them into another account. It's just like taking pennies from the tray.

Re:If this keeps up...

[sholden]

Say you're buying a $5.23 lunch, five days a week. You're actually paying $5.25 a day.

You conveniantly ignore all the occassions you buy a $5.27 lunch and save 2c. Or you're too stupid to read a simple post. Or maybe to stupid to understand what rounding means.

It averages out - sometimes you pay a cent or two above the total price. Sometimes you pay a cent or two below the total price. If you really care about 2c you can always arrange to be paying less, you just have to add/remove items with non-multiples of 5c prices until your total ends in 1c, 2c, 6c, or 7c.

Of course no one does because, they know it evens out in the long term (heck even in the short term).

I would bet the store you're giving those two or three or four cents to does not see it as insignificant, considering that they may be getting that extra one to four cents on hundreds of transactions in a day. Free extra revenue, from people who think that pennies don't matter!

You can't seriously be that dumb, there are only 5 possible results for an individual transaction.

1. the price paid is exactly the total price
2. the store gets an extra 1c
3. the store gets an extra 2c
4. the customer gets an extra 1c
5. the customer gets an extra 2c

There is no 3 and 4 cent option, as is pretty obvious if you think for about a quarter of second instead of just making shit up.

And if you are retarded enough to care, then just always arrange to but things which total $X.02. Congratulations, you save 2c on every transaction you make. Of course the time required to make sure the transaction ends in 2, and the extra items you have to buy to do so will probably make it not worth while - but feel free to stick it to the man!

For everyone else it averages out.

Re:If this keeps up...

[JakusMinimus]

In what crazy world is the debtor able to punish the one that wanted to condom the debt? In what crazy world would one want to condom the debt ?

Paper?

[Shadow Wrought]

Can I continue to light my cigars with hundreds?

"precious metals" in pennies?

[plasmacutter]

They stopped making em out of copper before the 50's (I forget exactly when its finals week XD)

they make them out of an electroplated nickel alloy now..

Dare i say it shouldn't just be oil we should be concerned about running out?

JUNK METAL coins are now worth more than their face value... I think this is a sign that asteroid mining could be feasible (the average nickel iron monster is worth several trillian.. not counting any incidental precious metals)

Re:"precious metals" in pennies?

[Phreakiture]

They stopped making em out of copper before the 50's (I forget exactly when its finals week XD)

I'll give you some slack for finals week, but you are off by three decades. Pennies were made of 95% copper until the mid 80's. Dimes, quarters, half-dollars and full-sized full dollars (i.e. not sacagawea-sized) were made of silver until 1963.

(Yes, I am a coin collector)

they make them out of an electroplated nickel alloy now..

Zinc, actually, not nickel.

Dare i say it shouldn't just be oil we should be concerned about running out?

Well, not exactly a misplaced point, but we can recycle metals, hence the very problem the article was about. We can't recycle oil once it's been burnt.

Re:"precious metals" in pennies?

[pthisis]

Found it. 1982 they switched from 95% copper, 5% zinc to 97.6% zinc with 2.4% copper plating.

The previous composition (95% copper/5% zinc) went back to 1962. 1864-1962 it was 95% copper/5% zinc/tin alloy, except in 1943 they were zinc-plated steel.

Just get rid of pennies

[Anonymous Coward]

A worthless coin anyway.

Intrinsic Value

[Bastard of Subhumani]

Dada21 will be along to spout something about precious metals, followed at 11 by a film.

How much does it take to refine the metal?

[east coast]

As much as I can understand why they do not want people melting down these coins, how much is the metal really worth in it's "raw" form unrefined?

My second question is how much would it cost to refine these metals to make them worth the most? Copper prices are sky high right now but a lump of melted pennies probably wouldn't be able to be sold as a "copper" since there are a number of other metals involved. Is this something that can really be profitable?

Re:How much does it take to refine the metal?

[Phreakiture]

As much as I can understand why they do not want people melting down these coins, how much is the metal really worth in it's "raw" form unrefined?

About 1.7 cents for a current penny, about 2.3cents for a pre-1986 penny, about 7.5 cents for a nickel.

get rid of pennies altogether?

[jimfinity]

It might just be more feasible to get rid of pennies altogether.

here is an article i have found to be particularly illuminating.

http://www.straightdope.com/classics/a981009a.html

Re:get rid of pennies altogether?

[hey!]

Why stop there?

Why not get rid of nickles and dimes as well?

And why we're at it, let's get rid of all paper currency, replacing it with coins in the following denominations: $1, $5, $20, $50. Then we can stop printing money to replace all those torn dollar bills.

Think of the affect on crime. While you could carry a couple thousand dollars on your person if you really needed to, the drug kingpin who wants payment of a million in cash is going to need a forklift, not a suitcase. Similar issues of phyiscal inconvenience will deter counterfeiting.

Re:get rid of pennies altogether?

[mfrank]

You can't fold a dollar coin in half and stick it behind a G-string.

Re:get rid of pennies altogether?

[couchslug]

That will not be missed as alternative coin-reception techniques have been developed.
"Juicies" in the Phillipines have perfected a very entertaining way of picking up stacked change from atop a San Miguel bottle. The more skillful can return the stack coin-by-coin.
Shouts to any Nipa Hut or Fire Empire patrons in da house! :)

Devalue

[HappySqurriel]

I wonder how much of this is because of "increasing value of precious metals" and how much is "The devaluing of the American dollar" (I recognize that from the perspective of Americans this would be the same thing); if it is based on the dollars value, why wouldn't you attempt to correct the problem with the dollar (by not running a 1/2 trillion dollar deficit) rather than finding cheaper materials?

Re:Devalue

[Skreems]

Ah, but that assumes that the government actually cares about the deficit, and would rather pay down the national debt than blow untold billions of dollars on pork barrel spending for their own states.

My question

[UbuntuDupe]

Since they only penalty is a fine, can you pay the fine out of the money you made selling the metal from the melted down coins?

Possibly do as other countries did...

[b0s0z0ku]

And deprecate the coins equivalent to the penny and have the lowest monetary unit be 5 cents (it's obviously possible to make a coin for under 5 cents since a penny costs 1.75 cents to make). Also, encourage the use of $1 coins and create $2, $5 and possibly $10 coins as well (keep the $10 bills at least though). That way, it'll be easier for automated machines to give change. When I go to NJ from NYC, there's few things more annoying than the river of $1 coins that the ticket machine vomits as change when you put a $20 in to buy a $10.25 ticket!

And for folks who'll ask, replacing cash with electronic transactions isn't the answer. I for one like the anonymity of cash and the fact that I'm carrying a physical object of known value that can handle some pretty heavy abuse before becoming worthless.

-b.

How can they do this?

[stry_cat]

How can the US Mint make something illegal, only Congress has the power to pass laws. Someone please explain.

Bah, I'm too busy anyways

[TheWoozle]

I'm too busy straining the gold out of seawater and reclaiming the platinum out of old catalytic converters to mess with melting down pennies and nickels...

under what authority?

[Speare]

Under what authority can the US Mint create new law? The US Mint, the Secret Service and the Treasury are all in the enforcement, not the legislative branch.

Some AC said it was illegal to mutilate or deface paper money. Uh, no, it's not. It's also not illegal to cut up a US coin in some artistic fashion and sell it for a higher amount; this is done all the time. In terms of defacement, you can't stick a picture of Kennedy on a quarter and try to redeem it as a half-dollar, and the same goes for gluing a "20" on the corner of a one-dollar bill. That's simple fraud, in this case called counterfeiting.

Re:under what authority?

[qweqazfoo]

Ever heard of Administrative Law? Most of the laws in this country are made by federal and state executive agencies. http://en.wikipedia.org/wiki/Administrative_Law

And to blow your mind even further, the judicial branch makes law too! It's called common law. The federal judiciary and 49 of the 50 states operate under common law. If you don't like it, you have to move to Louisiana or France.

Re:redundant posting?

[Moofie]

Sounds like somebody needs a hug. C'mere, big guy.

Another Solution

[rlp]

I always thought that the mint should make all coins out of radioactive waste. It would solve the problem of nuclear waste disposal. It would encourage consumers to spend money - quickly. This would help the economy. And it would definitely discourage hoarding of currency.

Re:Another Solution

[slashjames]

Gives a whole new meaning to having money burning a hole in your pocket...

Re:Does anyone else here see the bigger problem?

[RKBA]

the value of copper has gone up significantly since 1998

You have it backwards just as almost all so called "news reporters" do (including even financial reporters). The value of copper, gold, nickle, etc., hasn't changed at all. The reason copper and all other items cost more than they used to is because the value of the US Dollar has declined. One ounce of pure gold still buys a good quality men's suit just as it always has.

Re:Does anyone else here see the bigger problem?

[feepness]

It isn't just a decrease in the value of a dollar, it's also an increase in the value of the metals.

I'm sorry and this isn't personal but I'm amazed at how little financial acumen we collectively have. This is the financial equivalent of being surprised that 40% of all sick days are taken on Monday and Friday.

The dollar being worth less and things costing more are exactly the same phenomenon. The value of the metals did not inherently increase. Were this lmited to a specific metal or commodity I would believe it, but it is very broad based and therefore can be traced to a monetary phenomenon (record low interest rates, loose lending practices, and increased consumer/government debt).

Re:Does anyone else here see the bigger problem?

[rrkap]

The dollar being worth less and things costing more are exactly the same phenomenon. The value of the metals did not inherently increase.

The value of metals DID increase relative to other commodities. So the parent post is right to say that it is a combination of a general decline in the value of the Dollar and an increase in the price of Zinc and Copper.