Talk About Passing the Buck! $1 Coins Get Shortchanged

The banks say no one asks for them. The stores say consumers don’t want them. The consumers say they’ve never heard of them. Or they’re too heavy. Or they tarnish.

Only truck drivers and the tooth fairy have embraced America’s newest currency, the golden Sacajawea $1 coin. One year after its introduction, the U.S. Mint’s most ambitious effort to launch a metal version of the paper dollar is a flop, albeit not as disastrous as the Susan B. Anthony silver dollar before it. While Canada, England and other countries have successfully replaced their lower-denomination paper money with coins, the United States has failed to win acceptance for its own, despite a $40-million advertising campaign.

The reason, numismatists agree, is the American refusal to dump the dollar bill. Congress considered and rejected that idea in 1997 when it authorized minting the coin.

“We’re the only country that hasn’t figured this out,” said David Sundman, president of Littleton Coin Co. in Littleton, N.H., one of the country’s largest coin dealers. “There has to be some pain before there’s change.”

The pain, in this case, is partly emotional.

“Marilyn Monroe, Coca-Cola and the dollar bill are three internationally known icons of the United States,” said James C. Benfield, lobbyist for the Coin Coalition, a collection of coin-dependent businesses that favors eliminating the paper dollar. And it’s partly political. The printers’ union at the Bureau of Engraving and Printing and the paper and ink industries lobbied against eliminating the dollar bill. So did the Mount Vernon Society, which didn’t want to lose the image of George Washington.

Most of the 700 million coins in general circulation are given as gifts or kept in a bureau drawer.

“Haven’t seen one,” said Chevy Chase, Md., supermarket manager Jason Kirsch. “We’ve had a lot of customers asking about the quarters, though, trying to collect all the states.”

Congress authorized the coin to give the public another cash option and to save the government money. A coin costs 12 cents to make and circulates for 30 years; a paper dollar costs 3 cents to make but must be replaced every 18 months.

But consumers don’t have an option if they never see the coin. And even as the U.S. Mint ponders how to remedy that, the computer chip is threatening to replace cash in many transactions. The trend is apt to make the coin obsolete in the very settings where it was supposed to make life more convenient: vending machines, toll booths, mass-transit lines--anywhere coin-operated machines are a mainstay.

“The coin may catch on in time, but I don’t think it will be in extensive daily use,” said Rep. Michael Castle (R-Del.), who sponsored the bill that President Clinton signed in 1997 to create the coin.

Only the U.S. Mint counts the coin as wildly successful: Director Jay Johnson said the billion coins minted so far exceed the 120 million it expected to issue in the Sacajawea’s first year. Still, demand would have to be many times that to rival the paper dollar.

The Sacajawea, named after the American Indian guide who helped explorers Lewis and Clark cross the Rocky Mountains, has the same dimensions as the Susan B. Anthony, but its golden color (it’s 90% copper, with some zinc, manganese and nickel) and smooth rim distinguish it from any other coin.

Castle and other supporters of the coin think it will become more of a substitute for four quarters than for the $1 bill. It weighs 8.1 grams, far lighter than four quarters, which weigh 5.67 grams each.

Meanwhile, retailers and bankers can’t agree on who needs to jump-start the process of getting the coins into greater circulation.

The Federal Reserve, which gets the coins from the Mint and distributes them to banks, says it has about $356 million of the coins ready to distribute. John Hall, spokesman for the American Bankers Assn., said banks won’t order more coins from the Fed until retailers ask for them.

“Look, retailers would like the consumer’s dollar however they can get it,” said Mallory Duncan, general counsel for the National Retail Federation, “but if the banks and the U.S. Treasury aren’t creating the demand, we can’t make it happen.”