Friday, July 1, 2011

Buffalo buffalo Buffalo buffalo buffalo, buffalo Buffalo buffalo.

Recent coverage of the billion one-dollar coins stacking up in Federal Reserve vaults (whose continued production is mandated by the law that created the series) has gotten people to talking about our currency system, how it should be changed, and why it just isn't going to be.

One common thread is pointing out that the dollar bill still exists primarily due to lobbying by the paper and cotton industries, and that any attempt to make our coins' sizes more appropriate to their values will be blocked by vending machine companies. This is absolutely true. The mistake is thinking this is something new. US currency has been subject to political pressure for as long as there's been such a thing. Sometimes the pressure has been significant--like the continued production of unpopular silver dollars by the hundreds of millions, which acted as a subsidy for the silver mining industry--to the utterly trivial.

In 1912, when the US Mint announced the upcoming switch from the uninspired Barber nickel to the much-more-attractive-but-poorly-thought-out buffalo nickel*, the vending machine industry was concerned. A detailed response from the Secretary of the Treasury put their minds at ease; the diameter, thickness, composition, and weight of the new coins would all be identical to the old, so there was nothing to worry about. But Clarence W. Hobbs of the Hobbs Manufacturing Company was not satisfied. His company, you see, manufactured a counterfeit-detecting device for nickel vending machines. The device worked poorly, and was used in only a very small number of machines, but he was convinced the new design would make it work even worse and was not pleased. His complaints--including a direct appeal to the President--tied the Mint up for the better part of a year before the Treasury Secretary felt confident telling him to take a flying leap.

The Sacagawea and Presidential dollars are too big and heavy for their value, and they're like that because when they were released, five percent of the country's vending machines took Susan B. Anthony dollars, and the companies didn't want to retool them. The new coins tarnish rapidly and unattractively, because when the Mint tested potential alloys, only the poor ones were compatible with devices intended to catch fake SBAs.

If even minuscule vending machine company interests trump currency design, then our chances of getting an overhaul to a sane system are nil. Just wait it out until we're all buying cheeseburgers with RFID implants.

[* - Which describes a few of the early 20th century coin designs. That's what you get when you hire fine art sculptors instead of coin engravers: innovative and bold designs, with inadequate attention to little workaday details like whether the inscriptions will stay legible as they wear, or whether the Mint's presses are physically able to strike the design.]

1 comment:

  1. You forgot "free and unlimited silver at sixteen to one"