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Jacob Dobbs
Prof. Gabrielle Turgeon
UWRT 1101-008
13 March 2017
Production of the penny needs to end. It costs more to make than it is worth. In 2016

one-cent pieces, or pennies as they are popularly known, cost 1.5 cents to make, that is up from

1.43 cents 2015 and in 2013 it cost 1.83 cents per penny. In 2016 the U.S. Treasury spent

$136,710,000 to make $91,140,00 worth of pennies. Which means they spent $45,570,000 more

to make pennies than they are worth. Simply put the government is wasting approximately

$136,710,000 making pennies annually. That is $136,710,000 that could be spent on education,

public transportation, our aging infrastructure, or any number of other important underfunded

programs. And with an annual inflation rate of 2.2 percent, over the last 20 years, that disparity

will only continue to rise. The government needs to stop producing the penny and begin

collecting the pennies that are in circulation.

This would not be the first time the U.S. has removed a coin from circulation. In 1857

the U.S. stopped producing and using the half-cent, which had a relative value of 14 cents as of

2014. Use has already been eliminated at Army & Air Force Exchange Service (AAFES) stores

oversees with no negative effect on AAFES or their customers. Canada, Australia, and New

Zealand have similar economies the U.S. and they have all eliminated their one cent piece. None

of these countries have reported any negative effects from the discontinuation of their one cent

piece.
The U.S. Mint has tried to make pennies cheaper to produce, and they succeeded in doing

so in the past. Pennies were originally 100 percent copper and weighing 13.48 grams, but after

going through many changes in both size and composition, to save on cost, they are now 97.5

percent zinc and 2.5 percent copper and weigh just 2.5 grams. In a 2014 report to Congress the

U.S. Mint stated There are no alternative metal compositions that reduce the manufacturing unit
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cost of the penny below its face value. Efforts to phase out the penny have been going on since

as early as 1989 when Representatives James A. Hayes, of Louisiana, and Jim Kolbe, of Arizona

introduced the Price Rounding Act of 1989. While it would not have eliminated the penny

outright it would have made it virtually obsolete.

One good reason is that most people do not often use cash to pay anyways. As of 2016

only 24 percent of people use cash for most of their transactions, down 12 percent from 2011.

With most people using cards to pay more than of Americans would not be effected by the

change. The few that do still use cash also would not see a difference because cash transactions

would be rounded, with 1, 2, 6, 7 rounding down to the nearest 0 or 5 and 3, 4, 8, 9 rounding up

to the nearest 0 or 5. Many people fear that rounding would lead merchants to raise prices to

favor them, causing a so-called rounding tax. However, a 2007 study by economist Robert

Whaples showed that the fear of a rounding tax was unfounded. He looked at approximately

200,000 cash transactions form 20 different gas stations and convenience stores in seven

different states and found that customers would have gained one cent for every forty transactions,

basically both stores and customers broke even. Additionally, none of the other countries that

have gotten rid of their one cent coin have reported price inflation due to the elimination of their

one-cent piece.
Another reason to get rid of the penny is that nothing costs that little. In 1900 a penny

bought a newspaper Monday thru Saturday. In 1870 a penny could buy a loaf of bread. In the

1930s a penny could buy a piece of candy at the corner store or an apple from a street vender.

But today a penny cannot even buy itself. In 2014 Robert Smith and Jacob Goldstein of NPR

went around New York City to try to buy something for a penny and could not find anything

worth that little.

Machines also do not accept pennies. From food and drink machines to movie machines,

such as Redbox, no modern vending machines accept the penny. Not even penny slots in casinos
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accept the coin anymore. Even though there are more one-cent slots than five-cent to 100 dollar

slots combined. The only machines that do accept pennies are stamp machines, and the U.S.

Post Office is having trouble getting new ones and maintaining the few they do have. Coinstar

machines also accept pennies, but they are just for getting rid of them and they take 8.9 percent

for doing it.

In March 2015 then Secretary of the Treasury, Jacob Lew, wrote in a memo to President

Barack Obama that the U.S. should eliminate the penny. He also went on to say in November

2015, Weve been looking at the penny for a long time, because obviously, the value of a penny

has gotten smaller and smaller as time has gone on, even with low inflation, it continues to

diminish. Former President Barack Obama has also supported eliminating the penny when he

was in office. When asked why the U.S. has not eliminated the penny yet in an online interview

in 2013 he said, I dont know.

As mentioned previously pennies are 97.5 percent zinc which is a toxic metal.

Swallowing only one penny is enough to be harmful to a child. In one case a boy was taken to a

medical center to have a penny removed and it has lost 25 percent of its mass while in the boys

stomach and created an ulcer. It was also stated that other coins would not have this problem

including copper coins, which the penny used to be. Pennies are also harmful to pets. I one case

study of the 19 dogs with zinc toxicosis only 17 survived.

Pennies production is also harmful to the environment. Zinc production is harmful to the

environment. Zinc ores contain only 3-10 percent zinc. Additionally, all zinc smelting processes received

an emission factor rating of E, the worst possible rating. And with pennies making up more than 50

percent of the circulating coins produced annually stopping the production and distribution of pennies

could cut the energy used by 50 percent. With no alternative to the current metal composition there is

only one solution.

So, who wants to keep the penny? One of the biggest supporters is Americans for

Common Cents(ACC). One of the founders and biggest contributors to ACC is Jarden Zinc
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Products. Jarden Zinc Products is the sole supplier of penny blanks to the U.S. Mint. In 2012

alone Jardon Zinc Products Paid Mark Weller, the head of ACC, $340,000 for Issues related to

the one-cent coin and U.S. Mint alternative metals study: The U.S. Mint should not keep the

penny just to help protect one companys bottom line especially when that company has a vested

interest.
Some people also argue to keep them because they honor Abraham Lincoln. But Lincoln

is also on the five-dollar bill. He is also honored with the Lincoln Memorial, on Mount

Rushmore, on many stamps, and many other statues and monuments around the country. He also

has an aircraft carrier named after him, the USS Abraham Lincoln. He has many towns named

after him including Lincoln, Nebraska the capital of the state. He has the Abraham Lincoln

Presidential Library and Museum in Springfield, Illinois. He is also featured in movies, such as

the 1908 film The Reprieve: An Episode in the Life of Abraham Lincoln and the more modern

Lincoln and Abraham Lincoln, Vampire Hunter. He has also had numerous documentaries made

about his life, for example Looking For Lincoln and Abraham Lincoln: American Mastermind.

He has also been remembered by people outside of America. English playwright wrote Lincoln

which was popular in Europe as well as America. He is honor by Jules Verne in Twenty

Thousand Leagues Under the Sea and The Mysterious Island. No one will ever forget who

Abraham Lincoln was or what he did to keep this country together during the Civil War and to

abolish slavery and make the United States a truly free nation, regardless of what currency he is

on.
Another common reason given to keep the penny are penny drives held by charities.

There have been no reports of charities being effected by penny elimination in Canada, Australia,

or New Zealand. As Jeff Golby, director of charity bank Chimp Fund, put it, On some level you

go, OK, it cant hurt, but when you factor in what it costs to charity . . . in time, in rolling costs,

its not a cost-effective way for charities to really actually net decent money. When pennies are
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eliminated charities will be able to throw multiple penny drives to help collect them. After

pennies are all collected, the charities could simply move on to nickel drives.
The solution is simple, stop producing pennies. The U.S. can look at Canada as good

example of how to stop penny production, as they got rid of the penny in 2012. The Mint would

stop production approximately 1 year after the legislation was passed. Use in stores would then

be phased out 2-3 years after passing. During this time businesses would be encouraged to round

the price up or down, but could decide whether or not to except pennies. After that 2-3 years,

pennies would no longer be accepted by businesses. However, you would always be able to

deposit them or turn them in for any other legal tender at a bank or in change machines such as

Coinstar.
What should be done with the 16.31 billion pennies in circulation? After stopping

production of the penny, the U.S. Mint would begin collecting them and sending them back to

their factories where they would be melted down for the zinc and copper and then the metals

could either be used to make other coinage or sold. The only impact eliminating the penny

would have is saving the taxpayers money. It is not a matter of if we get rid of the penny, but

when.
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