A penny saved is a penny that needs to be circulated


August 28, 1994|By Ben Grove | Ben Grove,Chicago Tribune

CHICAGO -- Each evening as Americans empty their change from purses and lint-lined pockets, many pennies get tossed into jars, boxes or jugs.

So sometimes, as it happened in many parts of the country recently, penny supplies dry up.

"It just comes out of nowhere every once in a while," said Illinois Armored Car coin manager Phil Kuzniewski, referring to what common folk term a penny "shortage."

The U.S. Mint prefers to use the more accurate term "uneven distribution" to refer to sporadic penny droughts.

But what, or who, is at fault?

Perhaps just shifts in the economy. But also ordinary people who quite innocently pitch copper change into a home collection.

Representatives at the U.S. Mint don't like the circulation pattern of the penny: cash register drawer to pocketbook to penny jar. But they understand who drives it -- thousands of people like Liz Weiner, spokeswoman for The First National Bank of Chicago.

"I hoard pennies," said Ms. Weiner. "It just gets to the end of the day, and you don't know what to do with them."

The penny has long been a coin of controversy. For years, advocates of changing the currency system have lobbied to abolish the one-cent. As the single penny has lost its buying power, people have lost respect for the coin.

In 1989, Congress even considered abolishing the penny and instituting a price rounding system. But studies indicated that the United States wasn't ready to pitch its penny.

So the coin, still hoarded, ignored, abused -- and even sometimes thrown into the trash, according to one study -- has survived. Now it's being produced in near-record numbers.

The mint is producing 13.3 billion pennies this year, the most in a decade.

"We're encouraging people to put their pennies in circulation," said Michael White, spokesman for the mint.

"It's a matter of demand being up and, at the same time, people not circulating them. They just put them in piggy banks or in drawers."

This summer, shortages got so bad in Mississippi and Ohio that banks appealed to patrons to bring in their socks full of pennies. A few New York banks even reportedly offered $1.10 for $1 in pennies.

Penny hoarders were at their worst in 1982, when worldwide copper prices made pennies worth more than their denomination value.

Those coins were 95 percent copper. But the federal government has since made pennies with 97.5 percent zinc and just a trace of copper plating in hopes that this would again spur circulation. Over time, it did.

But the penny's critics remain. Jim Benfield has long and loudly questioned the need for the one-cent.

"The U.S. Mint is making roughly 50 pennies for every person in the United States," said Mr. Benfield, founder of the Washington-based Coin Coalition. "And that is just this year. You right now are responsible for about 350 or 400 pennies. Do you need those pennies for your daily purchases? There are a lot more pennies than are needed in the marketplace."

But the penny has strong allies. A 1990 survey found 62 percent of Americans want to keep the penny, said Michael Brown, former U.S. Mint press secretary and leader of the now-defunct Americans for Common Cents. Mr. Brown is one of the penny's most valiant supporters.

The recent penny drought was just a "summer spot shortage," Mr. Brown said.

When retail sales are brisk, so too is the penny flow, he said.

Mr. Brown said he founded the pro-penny organization to "fill in the information void" that penny opponents were creating.

For mostly sentimental reasons, it seems, citizens favor keeping the penny.

But numbers in support rise when people are told that, in a price-rounding system, merchants probably would round up.

As Mr. Brown puts it, "The penny is here to stay."

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