I tell people I only feel old when I have to explain such things as wheat cents and mimeograph machines. When my children are the age I am now they may feel old when they have to explain one-cent coins themselves.
It is ironic that an administration seeking a return to traditional America is the one ending production of one-cent coins. However, the precedent of eliminating the lowest-denomination coin, existing use of fractional cents, and that ending production of the penny doesn’t ban it from circulation will allow America to be relatively unaffected by the end of the penny production.
A redesign led to the Lincoln Memorial being on the reverse of the one-cent coin starting with 1959 mintage. Prior to that two wheat stalks were on the reverse. The wheat cents were minted from 1909 through 1958 and the Indian head penny preceded the wheat cent. The flying eagle penny was the predecessor of the Indian head penny, and prior to that the large cent was minted.
By 1857 minting the large cent and the half-cent coin was costing more than the value of those coins, and that year the large cent was replaced by the flying eagle penny and the half-cent piece was eliminated. With the flying eagle cent being the lowest-denomination minted coin, the United States Mint might have preceded Lynyrd Skynyrd with the phrase “and this bird you cannot change”. However, half-cent coins were not removed from circulation so change could still be made from a flying eagle penny. The half-cent coin was no longer minted, but it could still be used.
In 1984 a friend and I were driving to Illinois. At the time the nightly rate at the Marina Hotel in Las Vegas was $25, and the minimum age to gamble didn’t prevent 20-year-olds from renting rooms. If we didn’t gamble too conspicuously we could get away with not being 21. We went to a small casino on the Strip with penny slot machines. I put a penny into one of the slot machines, three double bars showed, and 100 pennies were cashed out in my favor. I still have that cup of 100 pennies.
When I’ve told this story people have mentioned that if I had put $5 into the slot machine I could have obtained $500. I responded that since I was only 20 I wouldn’t have been allowed to collect that amount. Someone else once asked why there were penny slot machines in the first place. I told him they existed so 20-year-olds could gamble.
Nowadays a few casinos have nostalgic one-armed bandits which accept and dispense coins, although they are mostly quarter slot machines. Most current slot machines involve inserting dollar bills and receiving a voucher to redeem or to use in another machine. Penny slot machines nowadays no longer require actual pennies.
The silver dollar coin was discontinued in 1935 and not minted again until 1970. Las Vegas slot machines accepted silver dollar coins during those interim years. The end of minting silver dollars didn’t prevent them from being used. Pennies may end up in collections rather than in circulation, but they can still be used.
The 1857 elimination of the half-cent preceded sales tax, property tax, gas stations, and mortgages and credit cards which have interest. Gas stations charge in fractional cents per gallon, and purchases are in partial gallons, but the final amount is rounded to a full cent. Mortgage and credit card payments are also rounded to the nearest cent – and I personally learned to round up to the $10 increment above the minimum which may reduce interest payments by a cent or so but makes balancing my checkbook easier. Not only is sales tax rounded to the nearest cent, but many jurisdictions now have half-cent or quarter-cent sales tax increments which are ultimately rounded to the nearest cent.
The rounding to the nearest cent means that after the penny is eliminated some sales tax or interest amounts will be rounded up to the nearest nickel and some will be rounded down. It should be revenue-neutral for taxing agencies, merchants, and consumers.
Rounding pennies to the nearest nickel will actually be most beneficial for consumers. Gas prices tend to end in 9/10 of a cent per gallon so that they seem lower than the next highest cent, so they would likely be rounded to something ending in 9 cents if not 9 9/10 cents. As for prices currently ending in 99 cents to seem lower than a full dollar if raised one cent higher, those will likely end in 95 cents and thus save the consumer four cents.
It is also possible that one-cent increments will continue since pennies are still in circulation and many transactions are now by check, credit card, or voucher sheet. As long as pennies are still available they might still be used for cash payments.
Eventually pennies will go the way of the half-cent piece. But America will adjust without the one-cent coin.
