The Golden Dollar: Where Is She Now?
The Coin Coalition talks about Sacagawea
Part II
Last month, we talked to operators who are using the coin to provide some first-hand examples of Sacagawea in action. This month, we had the opportunity to speak with Jim Benfield, a representative from the Coin Coalition, and ask him some of our readers' questions.
MCC: What concerns do you hear from operators about the golden dollar?
Benfield: Operators are starting to get a mix of Susan B. Anthony dollars and golden dollars from the U.S. Mint. That is not good. Also, a lot of these guys don't want their coins wrapped in rolls because they have to break open each one before they can use it. They are pretty unhappy. I have been working with some operators to make a little bit of noise. Don't just write the Mint. Write your congressman and the Federal Reserve. I don't think the Mint realizes small coins are paid out by human beings, but dollar coins tend to be paid out by machines. If you have big bulk hoppers for them, you don't want them in little tiny rolls.
MCC: Some operators feel the Mint has failed to fully promote the dollar coin since its initial appearance and wonder if it was a waste of taxpayer money. Do you think this is the case?
Benfield: It is not a waste of taxpayer money. Despite how much the Mint ignores the private sector, the dollar coin is just so much more convenient than four quarters. I think there are still some operators who tend to view the dollar coin as a replacement for a dollar bill. It's not. It is a replacement for four quarters. As a carwash operator, which would you rather do--take 300 pounds of quarters to the bank or get 100 pounds of dollar coins from the bank? It is just easier to deal with dollar coins. I think some operators are not very happy just because the Mint and the Fed do not seem to be listening to what they want.
MCC: How do you think dollar-coin use will change over the next 10 years?
Benfield: Use will continue to go up. There are some really good things happening in the marketplace. I can tick off about 16 cities that are changing their parking meters to take the dollar coin. So people pulling into your carwash discover that it is really convenient--"This place gives me dollar coins, and I will put them in my tray and use them in the parking meters." Now there is a reason to carry this coin. All the bus systems in the country take it so an everyday bus rider is going to say, "This is really convenient."
The numbers are potentially very large in the carwash industry. One operator I am in contact with is at one million coins a year. Another is at 12,000 a week right now, that is 600,000 a year, and he has only converted half of his locations. You will find that it takes time for word of mouth to get around. It is happening in mass transit. Eighteen of the top 20 bus and rail systems accept the dollar coin. New York City transit is paying out 50 million per year, probably one third of all the coins going into circulation. We are starting to see a dynamic there. All of these things virtually did not happen with the Susan B. Anthony coin. There were no parking-meter conversions. There was no carwash-industry movement. There were no tavern amuse-ment game operators doing this. And I think if we get three or four major industry sectors banging away at this, it is going to happen. At some point you have to wait for the little light bulbs to go on in other peoples' heads, but those light bulbs are going on and this thing is growing. It really is growing.
MCC: A lot of carwash customers still don't recognize the dollar coin? Is this a marketing problem?
Benfield: The Mint needs to be more aggressive in allowing operators to get their signage so when somebody gets this coin there will be good-enough decals.
MCC: Is the paper dollar going to be completely phased out?
Benfield: No, there are no plans to do that whatsoever. I have heard people say this, but I have been very close to this issue for 13 years and it's not true. I wish it were. I am the biggest advocate of getting rid of the dollar bill.
MCC: Why do you think the dollar bill will stay around?
Benfield: Most people at this time think it is more convenient than the coin and prefer paper in their wallets. But that is because most people have not been given the opportunity to spend the coin conveniently. A lot of the vending industry has not converted.
MCC: One of the Coin Coalition's stated goals is to cause the dollar coin to circulate in "sufficient quantities." How would you define sufficient quantities, and how close are we to meeting this goal?
Benfield: We are not close at all. What I would like to see is that a person receives dollar coins in change so they can go to a carwash and put them straight into the machine. That is when it would be convenient. A lot of people save quarters for laundry. In the carwash industry, operators have to go to the bank to get the dollar coin and that is work. I would like to see the dollar coin freely circulate. Operators would be depositing dollar coins instead of getting them from the banks. I don't see that happening any time soon, unfortunately.
MCC: How close are we to the public perceiving the dollar coin as a convenient alternative to the paper dollar?
Benfield: Not very close. This coin should be a lot more than just a coin for certain industries. It should be widely used. If the telephone industry starts converting their boxes and parking meters and mass transit and a few retail operations start to really catch on, then I think this will tip all of a sudden and you will see the coin go from very minor usage to rather heavy usage very quickly. But I don't see that happening in the next year or two.
If you look at what a single operation will pay out, the numbers are huge. You don't need a whole lot of people putting this coin in circulation to have tens of millions of them out there. What I have told the Mint and a lot of other people is think small. One carwash operator can pay out between 400,000 and 500,000 golden dollars a year. Five guys can put as many coins into circulation as three or four small sub-way systems. The carwash industry, in 1999, was identified by the Mint's marketing consultant as having the highest single potential for increased use of dollar coins of any industry. Considering where the industry is today and where they can be in five years, the Mint ought to be falling over itself trying to make carwash operators happy.
A lot of people say, "What can one person do when you have the Mint out there with a $40 million budget?" I think I can do a lot with continuing to raise this issue and give people ideas and show them it really can take off. And I don't think you need a million-dollar budget. If you join forces the Mint will start to pay attention to its customers.
The Coin Coalition, based in Washington, D.C., was formed to help the newly authorized dollar coin to circulate in sufficient quantities to enable coin-operated industries and mass transit to operate more efficiently. For more information, go to www.coincoalition.org.
Late-Breaking News
On the day this article went to print, the U.S. Mint announced it will be
cutting back on production of the Sacagawea dollar coin. For now, the Mint will
not make any new dollar coins for banks, retailers and other businesses. It will
produce some coins for collectors.
Experts claim a lack of consumer interest and the economic recession contributed to the Mint's decision. A report by the Treasury Department's Inspector General pointed out the Mint still has about 3.6 years worth of inventory of golden dollar coins on hand should there be a pickup in demand for them.
The Mint will work with the Federal Reserve early next year to investigate demand and decide whether or not to resume production of coins intended for public circulation.
Jim Benfield, the Coin Coalition representative interviewed in this article, says the Mint's decision does not mean the end of the golden dollar coin.
"Yes, the Mint may not make many 2002 Sacagawea coins, but it doesn't matter," he says. "There are 540 million golden dollars sitting in Federal Reserve and U.S. Mint inventories and when they run out, [the Mint] will make more."
Benfield points out that the Mint made more Susan B. Anthony coins when the supply was exhausted in 1999 and adds it would take an act of Congress to shut down the dollar coin right now.
"That is not going to happen," he says.