A Penny for Your Thoughts
The coin has been in circulation even before The composition of a coin differs in every nation and economic status. Once, coins were minted using gold and iron. In the United States, a coin is composed of gold, silver and copper as the law states in 1792. The dollar, half-dollar, quarter, dime and half-dime were composed of silver. Cents and half-cents were made of copper. Gold and silver coin production were discontinued in 1933 during the Great Depression. Today the coins are now composed of copper and nickel, with a pure copper core and an outer layer of copper (75%) and nickel alloy (25%).
(www. usmint. gov) The production of coins, or money per se, maybe the result of the inefficiency of other forms of exchange during the earlier times. Many items proved to be the form of early money, among which are shells, precious metals, crops, etc. For one, barter trade had encountered so many problems during exchange, like seasonality of crops or goods that would be bartered, the effects of the law of supply and demand for a certain produce, and the means of transportation of the exchange.
The need to let out creativity, efficiency, and the capacity of the human mind to hold and attach value to a thing may have been one of the reasons why men invented money. (Menger,1892) Even before paper money came into circulation, precious metals are already minted to fashion coinage, bearing symbols or the face of a ruler which depicts the value and the origin of the said coin. In the modern age, the use of coins is being dictated by many factors like inflation, the law of supply and demand, marketing strategies etc. We sometimes tend to see the coin as of less value than paper money because of it’s purchasing power.
However, some commodities are still on the being marketed on the basis of the coin value for example, the vendo machine which caters to the use of coins for change. Strategies to make products and services appear more affordable such as advertisement pricing of including 0. 95 cents instead of rounding off to the next dollar is still very widely used which also affects the monetary system. Legislative actions have not been taken yet to remove coins from the economic circulation since there is a great deal of importance in the use of these precious minted metals.
However, there had been some debates on whether or not to pull out the penny from monetary circulation since the cost of minting a penny is more costly than the value of the money itself. Some say that retiring the penny would be a good way augmenting the economic crisis by lowering the cost of production of coins. . It was in 2002 and 2006, that House Representative Jim Kolbe moved to resign the penny from the circulation. His arguments for elimination include cost of production for the penny, hazard to children, and inconvenience. But his move to overhaul the US currency was futile and failed to advance in Congress.
Although some countries like New Zealand, Norway, Australia, Israel, Finland, Hungary and Brazil had already won their way in eliminating the lowest coin value in their monetary system, the United States would require a more thorough research and judgment in this time of crisis before removing coins, the penny in particular, in it’s monetary cirulation. The preservation of the penny, including other coinages, may have been due to historical sentiments, if not it’s value. REFERENCES Davies, Glyn. A history of money from ancient times to the present day, 3rd ed. Cardiff: University of Wales Press, 2002.
720 pages. http://projects. exeter. ac. uk/RDavies/arian/northamerica. html Eggers, Matthew J. Americans for Common Cents. New York Time Upfront. May 7, 2007. http://www. thefreelibrary. com/Should+the+penny+be+retired%3F+It%27s+been+our+smallest-denomination+coin… -a0163393643 Menger, Carl. On the Origins of Money. Economic Journal, volume 2 (1892) p. 239-55. http://socserv. mcmaster. ca/econ/ugcm/3ll3/menger/money. txt http://www. wisegeek. com/should-the-united-states-stop-using-pennies. htm HYPERLINK “http://www. usmint. gov/historianscorner/index. cfm? action=Production”http://www. usmint. gov/historiaSample Essay of Eduzaurus.com