JOHN REGITKO’S NUMISMATIC EH-BULLETIN

A free electronic publication about the weird, unusual, entertaining and funny stuff about coin collecting and money generally. Most of the articles will be funny, some might make you think…but above all, most will be a complete waste of your time.

 

Volume 1, Number 4 – April 22, 2008

 

SPOTLIGHT ON THE LOWLY CENT - PART TWO

Last Tuesday, I published a few items about the possible elimination of the cent. Here is part two on things that deal with the same topic.

 

 

MY OPENING SHOT

For years, surveys have shown that merchants want to eliminate the cent, while a lot of customers wouldn’t mind if it was gone. However, the demand on the Royal Canadian Mint is for over 1 billion a year. Statistically at least, I assume that there is a great demand for the penny to keep commerce going. I do not believe that tells the whole story, though. I suspect that the majority of those little pieces of copper…well, actually, mostly steel…wind up being involved in a transaction exactly once.

 

Each evening, when I empty my pockets, they wind up in a drawer. I do not carry cents around from one day to the next, but leave them at home, only to receive more because I don’t have exact change for my purchases. I counted the number of cents in my drawer at the beginning of the month. Since then, I have added another 64, making the present total 401. The reason it is so low is that a couple of months ago, when the bottom of the drawer broke out, I rolled them all up and took them to the bank.

 

If I am typical and you multiply that by millions of people doing the same, I don’t have to be a rocket scientist to know where all the cents are going.

 

 

SPOTLIGHT ON LETTERS

In last Tuesday’s bulletin, I asked for your thoughts on the penny; Here are a few:

 

Letter #1 – From Matthew Sztym: “I have 3 statements.

 

- The formula for rounding the penny up to the nickel would probably be given a budget by the government for $100 million nation wide to implement. After all the paperwork, court challenges, "missing funds" and poor handling, the program will exceed the budget and approach 1 billion in a few years, and around 2 billion by the time it is properly implemented.

 

- If the penny is discontinued, everyone who supported getting rid of the penny will become agitated. Due in fact that because there is no penny, purchases are automatically rounded for both cash bearers and debit and credit users. Given the new formula, store owners will cleverly raise their prices by a few cents so that they always round up, nickel and dimeing away the bank accounts of the card users who supported the elimination of the penny.

 

- Banks will use the elimination as an opportunity to make money. Because there are no pennies in circulation the bank can simply round down everyones bank account. Banks, of course, are not bound by the same rounding formula that stores are, due in fact that the government did not spend enough money implementing the 2 billion dollar program. They justify the rounding by stating that if someone closed their bank account today, we could not pay them the last 4 cents in their account and they would sue us for taking their money. With this new scheme, banks will advertise high earning chequing accounts that compound interest daily. That way every day they add a penny to your account, and every day they truncate the value back to a nickel.

 

Those are my 3 cents, but I guess I would have to give you a nickel.”

 

Letter #2 - From Jack Hepler

If you are taking votes, I vote for eliminating the Cent in commerce but retaining it in collector sets such as Proof and Mint Sets. But such a move to eliminate the Cent would require some other changes in the commercial system such as prices being rounded off to the nearest Five Cents, gas pumps clicking over to the nearest Five Cents. Incorporating taxes into the advertized or posted prices, etc. But this could all be done and after a few months/years, no one would notice any more. The rest of the world has been doing this kind of thing for a long time, sometimes changing the entire monetary system; e.g. United Kingdon, EU, etc.

 

Letter #3 - From Ben Boelens:

Eliminate the cent. Many countries have done so. Try to find a Mexican centavo after 1973 or a Dutch cent after 1980 or a Hong Kong penny after 1941. But I like the idea of including all taxes in the price of goods. It just makes sense. Europe does so. Just make a law that every company can only show prices with tax included. Eh!

 

Letter #4 - From Colin Bruce:

I recently wrote to our local pollee-tician that we should change to aluminum pennies and use up all the old air force plane carcasses in the vast boneyard in Arizona...well they just announced scrapping out the boneyard.....for $$$ Cheezettes.

 

Letter #5 - From Dan Buss:

If there are 20 billion pennies rattling around in Canada, then why continue to produce more each year if they're so useless. Just simply stop production and use what we got. This would also prevent all those pennies ending up as landfill and pollution.

 

Letter #6 - From Terry Johnson

Maritime Greetings.....loosing the penny is like loosing a friend or a loved one....we the consumer will be at a loss if this happens...what once cost 96 cents....will now cost $1.00... you will not be given the lesser cost of 95 cents...(we lose)  but wait...if your paycheck is say $249.64 you will be given the lesser amount of  $249.60 (you lose again) open your eyes, not your wallet...you will always come out on the short end of change. Now when some people go to Timmy's for their coffee and they get pennies in their change, usually the counter lady will receive these as a tip (counter coffee people don't get paid as much as other workers). And some people even give the pennies to the camp for kids. Pennies do add up. But eliminate the penny and the small change tip goes out the window with the bath water and the baby. Now the business that you deal with every day will put their hand into your pocket. Isn't it bad enough that the government already has their hand in your wallet where the big money is? Be honest.. if you throw away your pennies, do you throw away your Canadian Tire money as well...give it all to your children or to a service group: cubs, scouts, guides, etc. There are a lot of needy groups trying to raise money: United Way, cancer fund, kidney foundation - save the pennies for them. Better still, if you have a bill and are displeased with the service, arrange to give them a hand full of pennies - it does work both ways. FLASH: the government will then do away with the 5 dollar note and now give you another coin into your pocket. They will do away with the penny and then give you another bigger coin to take its place in your pocket, not your wallet. Save your pennies and buy a belt for your pants. You will need it!

 

Letter #7 - From Ken Grahame:

Of course it should be scrapped – immediately, with no further discussion. Just look how much time has been taken up already with discussing it's demise, including reading all that you have printed on the topic and are about to print next time. Eventually it will probably be scrapped anyways, so why not just save everyone a whole lot of time and scrap it right now. Besides, we would probably also save a bunch of trees that way too, because there would be less articles printed about the subject. So, which is more important to us: time and trees or the lowly cent? Case closed.

 

Letter #8 - From Nancy the Neighbour:

In March I initiated a drive for spare change in my office - to collect $ for Dr. Roz' Healing Place (a shelter for victims and families of domestic violence). We raised $360, preceded by $260 over 2 days in December. It is a great idea because people have jars of change they never have time to roll or use, so it was "painless." Good title for this is “Change for a Better World” or use the acronym PIG (Painless Initiative Giving) like a piggy bank. I baked a huge double layer sheet cake as a prize to the winning team. (Editor’s Comment: Nancy is my neighbour who is also involved with good causes involving animals - and she lets me taste her baking.)

 

 

SPOTLIGHT ON COPPER

A kindly Jewish gentleman told me the following joke, but to be politically correct, I have made a slight change, with apologies to anyone on my distribution list of Scottish descent.

 

Q. How was copper wire invented?

A. Two Scotsmen were fighting over a copper penny.

 

 

SPOTLIGHT ON COIN SHORTAGE

The Free Republic published “Coin shortage could turn pennies to nickels” on their website recently. Following are excerpts:


Talk about pennies from heaven. A potential shortage of coins in the United States could mean all those pennies in your piggy bank could be worth five times their current value soon, says an economist at the Federal Reserve Bank of Chicago. Sharply rising prices of metals such as copper and nickel have meant the face value of pennies and nickels are worth less than the material that they are made of, increasing the risk that speculators could melt the coins and sell them for a profit. Such a risk spurred the U.S. Mint to issue regulations limiting melting and exporting of the coins. But Francois Velde, senior economist at the Chicago Fed, argued in a recent research note that prohibitions by the Mint would unlikely deter serious speculators who already have piled up the coinage.

 

The best solution, Velde said, would be to "rebase" the penny by making it worth five cents rather than one cent. Doing so would increase the amount of five-cent coins in circulation and do away with the almost worthless one cent coin. "History shows that when coins are worth melting, they disappear," Velde wrote. "Rebasing the penny would ... debase the five-cent piece and put it safely away from its melting point," he added.

 

Raw material prices in general have skyrocketed in the last five years, sending copper prices to record highs. Copper pennies number 154 to a pound. Since 1982, the U.S. Mint began making copper-coated zinc pennies to prevent metals speculators from taking advantage of lofty base metal prices.

 

Though the penny is losing its importance, the Mint is making more and more pennies. Velde said that since 1982 the Mint has produced 910 pennies for every American. Last year there were 8.23 billion pennies in circulation. "These factors suggest that, sooner or later, the penny will join the farthing (one-quarter of a penny) and the hapenny (one-half of a penny) in coin museums," he said. (End of article.)

The above article caused some people to post responses. Here are some of them:

 

- I hate bringing in pennies. The bank clerks look at you like you just plopped a steaming pile of do-do on their desk.


- I like paying annoying institutions and government agencies in pennies - for the exact same reason.


- Here in NYC, I have had homeless guys say "no thanks" to pennies.

 

- Udder non cents


- We have groups that complain about the gas stations rounding off to the nearest cent on their pumps.


- The pennies help the clothing industry by causing holes in pockets.

 

- What a centsless tragedy.

 

- I don't know why people say pennies aren't worth the time it takes to wrap them. If I am sitting on my butt at home, I am not getting paid by anyone. If I wrap $5 in pennies rather than throwing them away, I've got $5. Would I throw away a $5 bill every few weeks?

- A penny will still buy a kid a ride on a mechanical pony at Michigan Meijer stores.


You might find the statistics about pennies at http://www.kokogiak.com/megapenny/ interesting.

 

 

SPOTLIGHT ON NUMBERS

2 cents - the most I ever gave my opinions for. With the discontinuance, would I have to give two-and-a-half times my opinion to give my nickels worth?

 

13 cents – amount that Professor Hedy Lee is suing hundreds of Chinese ladies for, which translates to 1 yuan,  Nicknamed China’s “Complaining Queen,” she has filed complaints to stop public spitting in the street, queue jumping, littering, public cursing, keeping fowl in their gardens, people going shopping in their pajamas, passengers throwing up in taxis and other “shame suits.” She is doing this in a crusade to improve civility in China for the Olympics.

 

54 cents - amount (which is equivalent to 5,000 ruphiah) that you must contribute for each of five seedlings in Indonesia’s Sragen district when you want to get married. The person that officiates the marriage then hands them to the government to be planted. Couples who are looking to divorce must donate 5 times the cash amount.

 

$2.95 - amount that the Canadian Radio-television and Telecommunications Commission (CRTC) ordered that Telus must refund to its customers, after charging them that amount each month if they did not sign up for a long-distance plan.

 

$1 - amount that a letter-writer to the Toronto Sun proposed paying to people to get them to come out and vote. He thinks it would be an incentive to show up and pay them for the time it takes to go in to vote. Oh, how many people in the world would gladly give a dollar or two for the privilege of being able to vote?

 

 

SPOTLIGHT ON LETTERS TO THE EDITOR

The following letters appeared in the Toronto Star:

 

“It’s time to scrap the myth that scrapping the penny will be inflationary. Companies have been instructed to set prices based on psychological thresholds. That’s why a $10 item is priced at $9.99, because it “feels” like $9 to most people. Does anyone believe that companies will suddenly decide to give up this advantage? Instead, the $9.99 item will now be priced at $9.95, and this deflationary advantage will carry through on most purchases. Some people are also afraid that no one will give them a penny for their thoughts or they won’t be able to put in their two cents. I say that’s penny wise and pound foolish.” - Eric J. Mantel, Mississauga.

 

“In your casual dismissal of the penny, you should keep in mind the large cost to convert every single cash register and all other computer accounting programs to adjust prices up and down when the nickel becomes the smallest coin.” - Gary Reid, Brampton, Ont.

 

 

SPOTLIGHT ON THE DISAPPEARING CENT

A recent letter from Karen Turk-Dynes of Stouffville, Ont., published in the Toronto Star, gave me a clue where some of the 1.2 billion cents went that the Royal Canadian Mint struck last year. It appeared in the useful tips column entitled “Reader Exchange.”

 

“I love cleaning with vinegar. But the best use for it I’ve found is for cleaning the scale from a kettle. Simply put a few pennies in the kettle and then fill half the kettle with white vinegar and the other half with water. Bring to a full boil. Simply rinse out the kettle with water and your scale is gone.”

 

What caught my attention was the ending to her letter: “Remember to count how many pennies go in so the same amount comes out.”

 

So that’s where some of our pennies are going. You are not checking your kettles!

 

 

SPOTLIGHT ON PRICE OF COFFEE

Tim Hortons Inc., Canada’s biggest coffee-and-donut chain, recently boosted prices at its Ontario stores to compensate for higher operating costs. Tim Hortons introduced what it called “moderate” price increases.

 

When I recently went (actually, it was every day) to purchase an extra-large hot cappuccino for me and a half coffee/half chocolate for my wife, rather than paying $3.36 as in the past, the price was $3.50.

 

That’s good enough prove for me that they planned the pricing for the day the cent would be eliminated, eh.

 

 

MY CLOSING COMMENTS

Much ink has been spilled writing about the importance…or rather lack thereof…of the cent. It would appear that the majority of people can live without it…except the collectors of proof-like sets and other Mint products that want the cent to continue to be included in their collections. In the meantime, I am sure we will be “nickel and diming” the subject to death.

 

Until the next time…

 

John Regitko

Your Eh-Bulletin Editor

 

For submissions of material for publication, to be removed from this Eh-Bulletin ro to receive back issues: coinman@look.ca. These Eh-Bulletins may be copied, in whole or in part, in club bulletins, either in print or on the Internet, if proper credit is given, including my e-mail address.