July 10, 2012 – It’s an incredible amount of cents, which is circulating in the United States of America: 150 billion coins. Their weight is equal to the weight of 8 Titanics. Piled upon one another they wouldn’t reach the moon, but come very close to it with a distance of 232,500 kilometer. If you had to count them, you would need 4,756 1/2 years to finish this task assumed you would not get up and count average one coin a second. This means there is really a lot of raw material enclosed in these cents, so much material that even journalists are thinking of what to do with it.
Cordelia Hebblethwaite has written an article in the reputable BBC News Magazine about the smallest denominations. She quotes Francois Velde of the Federal Reserve Bank of Chicago for the production cost of the penny. It costs 2.4 cents to produce and to distribute a single piece – a significant amount taking into account that we are talking of 4.3 billion cents just struck in 2011. So it is quite surprising that although here have been two attempts to get Congress to abolish the penny – one in 2002, the other in 2006, neither was successful. Maybe in times of crisis this decision could be reconsidered. In Canada media celebrated the last cent to be struck. On the other hand it might be a poor business. If you strike less cents, you will need more nickels (= 5 cents); and the production cost of the nickel amounts to 11.18 cents per coin at the moment.
Anyhow, in Europe the penny – German Pfennig – contains still a little bit of mentality, magic and superstition. Germans have lost some of their New Year’s Eve customs with the invention of the euro divided in 100 cents. Nobody gives a lucky cent as New Year’s present. And shall we modify all of our sayings: “A penny saved is a penny earned.” or “Take care of the pence and the pounds will take care of themselves.”
Maybe this deep rootedness of the European pfennig / penny is connected to the fact that this was the very first silver coin invented in early medieval ages. Penny and Pfennig have accompanied markets for more than 1.300 years!
Compared to that the cent (from centum= 100) is rather young. It is connected with the idea of a denomination system according to the decimal system invented for the first time by Peter the Great of Russia (1682-1725). Maybe that’s the reason why the cent is in proverbs rather connected with greed, not with austerity: “He would bit a cent in two.”, “The boor looks after a cent as the devil after a soul.”
If you want to read the whole article of Cordelia Hebblethwaite, click.
We have published some commented links to news about the end of the Canadian penny. If you are interested in that, please click here.
Here you will find an article on the reasons for keeping the cent written by Francois Velde experienced economist who has worked on change during the centuries.
If you want to buy Francois Velde’s book “The big problem of small change” click here.