Sunday, July 1, 2012

Coin Production: Presidential one dollar Coins Plummet

Chester A. Arthur Presidential $1 Coin

The U.S. Mint released January coin production figures which reveal plunging Presidential $1 Coin levels

Circulating coin production totals from the United States Mint were sharply higher in January 2012 as compared to the previous month and from the same time period of a year ago — despite plummeting mintages of Presidential $1 coins and Native American $1 coins.

A scant 1.68 million Presidential $1 coins were minted last month compared to the 72.66 million in January 2011. Likewise, 840,000 Native American $1 coins were struck versus the 6.3 million from a year ago.

The drastic reduction is the result of a policy change by the Obama administration which stopped circulating production of dollar coins and permits the U.S. Mint to strike them only in quantities needed to fulfill collector demand.

As such, the amount of dollars produced this year is unclear and will be for some time until a baseline is determined based on how many $1 coin bags and rolls are ordered by collectors. Going forward, mintages should become somewhat predictable much like the Kennedy half dollars. The Kennedy’s have not been produced for circulation since 2001 but have been minted for hobbyists. Their coin production total hit 3.5 million in January. That was up 50,000 from their entire 2012 output and matches the amount manufactured in 2010.

January’s circulating coin production total came to 802.50 million. That was up 85.9% from December — a generally always-weak production month, and 4.9% higher than the prior January. For reference, production figures on a monthly basis for the last last dozen months follows.

2011-2012 January Coin Production Figures / Mintages

January 2012802.50 M5
December 2011431.78 M13
November 2011715.96 M7
October 2011690.66 M8
September 2011811.42 M3
August 2011604.54 M10
July 2011821.98 M2
June 2011903.06 M1
May 2011807.41 M4
April 2011640.17 M9
March 2011485.50 M12
February 2011523.14 M11
January 2011764.73 M6

The biggest gains for the month came on the back of heavier mintages of Lincoln cents and Roosevelt dimes. Jefferson nickels and quarters actually declined a bit from a year ago.

Coins are produced for circulation from either the U.S. Mint facility in Denver or the one in Philadelphia. The Philadelphia Mint was much busier with its output of 486.68 million coins than the Denver Mint and its 315.82 million. This is a reversal from last year at this time when Denver was more than twice as busy.

US Mint Circulating Coin Production in January 2012

Lincoln Cents162,400,000306,000,000468,400,000
Jefferson Nickels41,040,00042,240,00083,280,000
Roosevelt Dimes84,000,000110,000,000194,000,000
2012 Quarters25,000,00025,800,00050,800,000
Kennedy Half Dollars1,700,0001,800,0003,500,000
Native American $1s840,0000840,000
Presidential Dollars840,000840,0001,680,000

No "final" mintages have been declared for any of the 2012 Presidential $1 coins or the 2012 America the Beautiful Quarters. The current quarter total of 50.8 million is assumed to be a portion of El Yunque National Forest Quarters which were released into circulation on January 23. The Chaco Culture National Historical Park Quarter are expected to begin circulating on April 2, which means production of the El Yunque quarter could continue into March.

Since there are no circulating coin requirements for the 2012 Presidential dollars, it is possible that the U.S. Mint could be producing all four at the same time. However, it is more likely that the latest Presidential $1 coin production total is only for Chester Arthur dollars. Until very recently, the Mint was expected to launch bags and rolls of the Arthur $1 coins on February 16. Their release has since been changed to a "To Be Determined" date. Still, it would seem most likely for dollar releases to occur at distinct intervals throughout 2012 and, likewise, each to have staggered production runs.

The following table provides a look into the available year-to-date mintages for coins by specific design.

US Mint 2012 Coin Production / Mintages by Design

DenverPhiladelphia2011 Total
Lincoln Cents162,400,000306,000,000468,400,000
Jefferson Nickels41,040,00042,240,00083,280,000
Roosevelt Dimes84,000,000110,000,000194,000,000
El Yunque Quarter000
Chaco Culture Quarter000
Acadia Quarter000
Hawai’i Quarter000
Denali Quarter000
Kennedy Half Dollars1,700,0001,800,0003,500,000
Native American $1840,0000840,000
Arthur Presidential $1000
Cleveland Presidential $1000
Harrison Presidential $1000
Cleveland Presidential $1000

Visit this site’s US Coins Information page for details on many of the coins listed above. Current coin production figures are based on data from the United States Mint page:

Presidential dollar production

Future issues for collector sales only; none for circulation

U.S. Treasury Secretary Timothy F. Geithner Dec. 13 suspended production of Presidential dollars for circulation, but the U.S. Mint retains authority to strike circulation-quality Presidential and Native American dollars for numismatic sales.

“Consistent with the Presidential $1 Coin Act, those who would like to obtain future Presidential $1 Coins can purchase them directly from the U.S. Mint during specified periods,” according to a statement released Dec. 14 from the U.S. Mint by Mint spokesman Michael White. “Prices and shipping costs for future $1 Coins will be announced in the near future and will be set at a level that ensures that they do not result in a cost to taxpayers.”

Presidential dollars have been available in roll and box options directly from the Mint for those customers unable to obtain them from banks at face value.

Dollar coins needed to satisfy circulation demand will come from the vaults of the Federal Reserve Banks and their contracted armored carriers where 1.4 billion Presidential dollars currently reside. Federal Reserve and Treasury officials state that the existing inventory of dollar coins is sufficient to satisfy circulation demand for the next 10 to 12 years without additional production of the coins.

Government studies forecast that Presidential dollar coin surpluses would climb to 2 billion coins by 2016, the last year of the program, if production continued unabated.

Since the Presidential dollar coin program was introduced in February 2007 with the George Washington dollar, nearly 2.4 billion Presidential dollars representing the first 20 presidential administrations have been struck in circulation quality for circulation and for numismatic product sales. The Mint has also produced the dollar coins in numismatic versions for Proof sets, Uncirculated Mint sets and special packaging options. Production of those numismatic products will continue.

Geithner’s action to suspend Presidential dollar coin production for circulation was announced Dec. 13 by Deputy Treasury Secretary Neal S. Wolin at a news conference to report on Treasury Department efforts under the Obama Administration’s Campaign to Cut Government Waste.

Wolin said it is estimated that suspending dollar coin production will save $50 million to $70 million annually.

Difficult to obtain

Although the Federal Reserve’s inventory of Presidential dollars is well above what is needed for circulation purposes, some collectors across the country have found it difficult to obtain the coins at face value, especially if their local banks did not order them directly from the Federal Reserve. Native American dollars have been made available only through the Mint, either as a numismatic product or as part of the Direct Ship Program.

Both dollar series have been available for acquisition directly from the Mint.

Individual $25 face value rolls of 25 Presidential and Native American dollars were being offered as of Dec. 15 at $39.95 per roll, plus shipping, as part of the Mint’s regular product offerings.

Coins from both programs have also been available in larger quantities from the Mint through its Direct Ship Program, though the Mint recently raised the cost of the coins to consumers. Starting Nov. 15, the U.S. Mint imposed a $12.95 shipping and handling fee on $250 face value boxes of rolled Presidential dollars and Native American dollars. Prior to Nov. 15, the boxes were offered at face value, with the U.S. Mint absorbing the shipping costs, in order to get more dollar coins into circulation.

From the 2007 George Washington dollar through the 2011 James Garfield coin, Federal Reserve member banks have been able to order the latest Presidential dollar during a time period starting at three weeks before the coin’s release until two weeks after its release. Until these provisions, banks had to order the coins in $1,000 face value boxes of rolled coins.

Ceremonies and savings

Treasury Department spokesman Matthew Anderson said no decision has been made as to whether the official launch ceremonies associated with the release of each Presidential dollar into circulation will continue.

Anderson said the $50 million to $70 million in savings represents strictly production costs associated with the Presidential dollars. While the Mint profits on the production of each coin through seigniorage — the difference between the face value of the coin (the price at which the Mint sells the coins to the Federal Reserve) and the cost to produce it — those totals are negated by shipping and storage costs for the coins, according to Anderson.

The U.S. Mint’s latest cost to produce a manganese-brass clad Presidential dollar is 32 cents, according to White.

Native American dollars

The Presidential Dollar Coin Act of 2005 mandates the production of Presidential dollars from 2007 to 2016. The Native American $1 Coin Act of 2008 requires that 20 percent of all dollar coin production be Native American dollars. Those mandates will be met at the new production levels, Anderson said.

Anderson said suspending Presidential dollar coin production at the Denver and Philadelphia Mints affects 26 full-time or equivalent positions total. Anderson said no layoffs will result from the suspension of production, but the number of full-time positions or equivalents will be absorbed through attrition over time.

Anderson said Treasury officials are also looking at potential cost savings associated with the production of Lincoln copper-plated zinc cents and Jefferson copper-nickel 5-cent coins, both of which cost at or more than face value to produce. ■

policy of presidential dollar production

Tthe U.S. Mint will release the Chester Arthur dollar — the latest in its series of presidential $1 coins. This one will be available only to collectors willing to pay at least $1.70

  • Presidential $1 coins are displayed in Chicago. The U.S. Mint will release the Chester Arthur dollar Thursday.

    AP file photo

    Presidential $1 coins are displayed in Chicago. The U.S. Mint will release the Chester Arthur dollar Thursday.


AP file photo

Presidential $1 coins are displayed in Chicago. The U.S. Mint will release the Chester Arthur dollar Thursday.

The Obama administration has suspended production of the coins for mass circulation after the government racked up a $1.4 billion surplus of dollar coins.

"Nobody wants these things, and if they don't want them, we shouldn't keep making them," Vice President Bidensaid last December.

A review of internal government documents and interviews with former Mint officials suggest that an oversupply of dollars was as much to blame as a lack of demand.

•Over-ordering: During special "introductory periods" of new presidential coins, the Mint swallowed the shipping and handling costs for coins sent to banks, making it cheaper for banks to order them. A memo by U.S. Treasurer Rosie Rios last year estimated that 75% of all orders for coins came during those introductory periods, artificially inflating orders for new coins, even as banks were sending unwanted old coins back to the Federal Reserve.

"The Mint doesn't just produce as many coins as it wants," said former Mint director Philip Diehl; it makes coins to fulfill orders from banks.

Reports from the Federal Reserve to Congress show the central bank knew of the impending backlog as early as 2010. They estimated that 40% of dollar coins were returned by banks, prompting the Fed to propose building a $650,000 storage vault in Dallas and spend $3 million on armored cars to take the coins there.

•The ghost of Susan B. Anthony: The unpopular coin, first minted from 1979 to 1981, never really caught on. Consumers thought they looked and felt too much like quarters, causing confusion.

The banking system has never officially taken them out of circulation, so banks ordering previously circulated coins ended up with a mix of Susan B. Anthony, Sacagawea and presidential dollar coins.

•Credit card miles: The Mint, in an effort to get the coins directly to people who would spend them, offered a "direct ship" program that offered the coins for face value and free shipping. The Mint abandoned the program after discovering that some customers were ordering the coins on their credit cards to earn free airline miles, only to turn around and deposit them in bulk at a bank.

The question of what went wrong with the dollar coin could play a key role in the congressional debate over a proposal to eliminate the dollar bill entirely and replace it with the dollar coin. The Government Accountability Office says the move could save the government more than $5 billion over 30 years because coins last longer.

Interests backing the dollar bill — including paper and ink manufacturers, armored car companies and George Washington aficionados — have recently escalated their lobbying campaigns to fend off the coin.

Even coin advocates such as Diehl worry that the experience with the presidential dollar coins has strengthened opponents' position.

"These institutions have known for 30 years what had to be done, and they failed to act," said Diehl, who helped design the Sacagawea coin. "Instead, they just stepped back and said, 'The dollar coin's a failure.' "

The Mint will continue producing presidential dollars for collectors. Three more coins are due out this year: The Benjamin Harrison and two different coins for Grover Cleveland, who is often counted as two presidents because his terms were non-consecutive.