U.S.
BUSINESS > An
Overview of the U.S. Economy > Dollars & Cents: Fundamental
Facts About U.S. Money
U.S.
Coins
U.S. coins have changed many times since the
Coinage Act of 1792, which adopted the dollar
as the standard monetary unit.
Silver dollars have been minted and issued
at various times since 1794. Dollar coins were
discontinued in 1935, then resumed in 1971
with the introduction of the silverless Eisenhower
dollar. The silverless Susan B. Anthony coin,
honoring the famed women's suffrage advocate,
replaced the Eisenhower dollar in 1979. A new
dollar coin authorized in 1997 replaced the
Susan B. Anthony coins in 2000. The new coin
depicts Sacagawea, the Native American woman
whose presence was essential to the success
of the Lewis and Clark expedition. The coin
has a copper core clad in an alloy of copper,
zinc, manganese, and nickel, which gives the
coin a golden color.
The first step
in minting coins
is the production
of strips of metal
in the proper thickness.
(The U.S. Mint buys
these strips, for
all coins except
pennies, from commercial
suppliers.) Strips
for pennies are zinc.
Strips for nickels
are an alloy of 75
percent copper and
25 percent nickel.
Clad dimes, quarters,
half-dollars, and
dollars are produced
from three layers
of metal fused together;
the outer layers
are the same alloy
used for nickels,
and the core is copper.
The metal strips
are fed into blanking
presses, which
cut round blanks
(planchets) the
approximate size
of the finished
coin. (The blanks
for pennies, made
of zinc, are coated
with copper before
going on to the
next step. Commercial
companies provide
the planchets for
pennies to the
Mint.) The blanks
are run through
annealing furnaces
to soften them
and then through
tumbling barrels,
rotating cylinders
that contain chemical
solutions to clean
and burnish the
metal. Next, the
blanks are washed
and put into drying
machines. Then
the blanks go through
milling or "upsetting" machines,
which produce the
raised (upset)
rim.
Blanks next proceed
to the stamping or
coining press. The
blank is held in
place by a ring,
or collar, as it
is struck under tremendous
pressure. Pennies
require about 40
tons of pressure,
and the larger coins
require proportionately
more. Upper and lower
dies stamp the design
on both sides of
the coin at the same
time. Grooves inside
the ring holding
the blank form the "reeding" or
ridges on the rim
of finished coins,
except for pennies
and nickels, which
have smooth rims. |
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Half-dollars virtually disappeared from circulation
following the introduction, in 1964, of the
Kennedy half-dollar. Despite the fact that
huge quantities were produced, the half-dollar
remained scarce in general circulation through
1970. Silverless halves first appeared in 1971.
Other coin denominations in common use today
are the 25-cent, 10-cent, five-cent, and one-cent
pieces, familiarly known as the quarter, dime,
nickel, and penny.
The composition of U.S. coins has changed
considerably over the past few decades. Because
of a growing worldwide silver shortage, the
Coinage Act of 1965 authorized a change in
the composition of dimes, quarters, and half-dollars,
which had been 90 percent silver. Silver was
eliminated from the dime and the quarter. The
half-dollar's silver content was reduced to
40 percent and, after 1970, was eliminated
altogether.
In 1981 Congress authorized a change in the
penny's composition, abandoning the 95 percent
copper and 5 percent zinc alloy used for decades.
The one-cent piece is now copper-plated zinc—97.5
percent zinc and 2.5 percent copper. The old
and new pennies look virtually identical, but
the new coin is about 19 percent lighter.
U.S. coin denominations used in the past were
the half-cent, two-cent, three-cent, and 20-cent
pieces, as well as a small silver coin called
a half-dime. Gold coins in denominations of
$1, $2.50 ("Quarter Eagle"), $3,
$5 ("Half Eagle"), $10 ("Eagle"),
and $20 ("Double Eagle") were used
from 1795 until 1933.
The Mint
The U.S. Mint, which makes all U.S. coins,
was established by Congress in 1792 and became
an operating bureau of the Treasury Department
in 1873.
The Philadelphia Mint has been in continuous
operation since 1792. The Denver Mint began
its coinage operations in 1906. The West Point,
New York, and San Francisco Mints gained official
Mint status in 1988. Originally an assay office,
the San Francisco Mint is the primary production
facility for proof coins. The West Point Mint,
once used exclusively as a bullion depository,
is now the Mint's chief producer of gold coins.
U.S. coins typically bear a mint mark showing
which mint produced them. Coins minted in Philadelphia
bear a P or no mint mark; those minted
in Denver, a D; in San Francisco, an S;
and in West Point, a W. Although the
Coinage Act of 1965 specified that no mint
marks would be used for five years, Congress
authorized in late 1967 that mint marks be
resumed. The marks reappeared on regular coinage
in 1968.
Several branch mints are no longer in operation.
These mints were located in Carson City, Nevada
(mint mark, CC); Charlotte, North Carolina
(C); Dahlonega, Georgia (D);
and New Orleans, Louisiana (O).
Design
The Director of the Mint selects designs for
U.S. coins with the approval of the Secretary
of the Treasury, although Congress may prescribe
a coin design. A design may not be changed
more often than every 25 years unless Congress
determines otherwise.
Emblems
All of the U.S. coins currently minted portray
past U.S. Presidents. They are the Lincoln
one-cent piece, adopted in 1909; the 25-cent
piece portraying Washington, first minted
in 1932; the five-cent piece honoring Jefferson,
adopted in 1938; the Franklin D. Roosevelt
dime, introduced in 1946; and the Kennedy
half-dollar, which appeared in 1964.
The 50 States Quarters Program Act of 1997
provides for the redesign of the reverse side
of quarters to depict emblems of each of the
50 states. Each year from 1999 through 2008,
coins commemorating five states, with designs
created by the states, will be issued in the
order in which the states signed the Constitution
or joined the Union. These quarters will be
in general circulation, but the Mint will also
sell sets of collector edition proof, uncirculated,
and silver proof coins.
"In
God We Trust"
The phrase was first used on the U.S. two-cent
coin in 1864. It appeared on the nickel, quarter,
half-dollar, and silver dollar and on the $5,
$10, and $20 gold pieces in 1866, on the penny
in 1909, and on the dime in 1916. Dropped from
the nickel in 1883, the phrase reappeared on
the nickel in 1938. All U.S. coins now issued
bear the motto.
Commemorative
Coins
Coins to commemorate American
people, places, events, and institutions
are authorized by special acts
of Congress and manufactured
in limited quantities. Commemorative
coins, which may be gold, silver,
or clad, usually sell at a premium,
so they seldom circulate as regular
coin.
Legislation specifies that
commemorative coin programs
must operate at no net cost
to taxpayers. Surcharges
raised from the sale of commemorative
coins are designated for
a specific purpose or for
reducing the national debt.
The first commemorative coin
was minted in 1892 to help
finance the World's Columbian
Exposition in Chicago. Since
that time many other commemorative
coins have been issued.
Recent commemorative coins
have included 1996 Centennial
Olympic coins as well as coins
honoring Franklin Delano Roosevelt
and Jackie Robinson in 1997;
Robert F. Kennedy and Crispus
Attucks, an African-American
Revolutionary War patriot,
in 1998; and Dolley Madison
in 1999. |
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