In working on some early 1960s coin research, I found several news reports of coin shortages. The reports frequently included economic comments by US Mint and Federal Reserve officials.
It’s interesting to review the news stories of the coin shortages, especially one-cent coins, over the past few decades.
Here’s one from the Schenectady Gazette – November 27, 1962:
Eva B. Davis, the mint director, said production is being stepped up in the mints in Philadelphia and Denver. The shortage first developed in the mid-west. Now, she guessed that the worst of the shortage is over.
Not quite a year later, The Press-Courier on August 1, 1963 told a similar shortage story:
Eva B. Adams, director of the US Mint, says, “There has been a shortage of coins for months, and it appears to be growing worse.” But she pointed out that a recent study ordered by the mint indicated the demand for coins goes hand in hand with the ups and downs of the economy.
Just six months later, the Lewiston Morning Tribune on March 21, 1964 reported:
Miss Eva B. Adams, director of the Mint, is asking Congress for funds to enable working around the clock three shifts and Saturdays and Sundays. The growth of demand for new coins is double that of the gross national product in the last 35 years.
In 1965, over a year later, the Spokane Daily Chronicle on July 27 told of more shortages:
An officer of the Federal Reserve Bank says the US coin shortage is worse than ever, and not likely to improve until the new Philadelphia mint is completed in two years. He speculated the lack of silver can be traced to the country’s growth and prosperity.
On March 1, 1966, the Milwaukee Journal reported an improvement:
The coin shortage has lessened enough for the US Mint to mint coins for Panama. But, Miss Eva Adams, director of the mint, said Tuesday that although the United States coin position had improved, the mint would not be able to make coins for other nations until the new Philadelphia mint opened next year.
Just over a year later on June 1, 1967, The Telegraph-Herald discussed another coin shortage problem:
The Treasury Department responded to a coin shortage due to the hoarding of the silver coins. The mint’s production of the new cupro-nickel coins has not met the demand of the buying public. As part of the solution, the Treasury Department barred the melting and export of silver coins.
A report in the December 27, 1970 Sarasota Herald-Tribune chastised the mint director for calling the one cent coin a “penny.” For the real issue, however, Mary T. Brooks, director of the mint, asked people to use pennies found in shoeboxes or other collection spots. She wanted to reduce the pressure on the mint production facilities.
Three years later, the November 14, 1973 Eugene Register-Guard quoted Mrs. Brooks, director of the mint, saying that her “biggest headache” is the shortage of pennies.
In 1974 on April 16, the Deseret News described the penny shortage as it related to the increase in copper prices. Mary Brooks, director of the mint, does not think there are big operators; instead regular citizens are hoping for a windfall if copper prices continue to rise. But, the shortage is such a problem that the Treasury Department barred the export or melting of copper pennies.
Through the 1980s the US Mint continued to be concerned about a penny shortage when the copper prices rose again. But the decade did not experience the severe shortages of the 60s and 70s.
But, in 1994, the US Mint churned out the pennies to address another “hoarding” shortage. The July 10, 1994 The Day newspaper speculated the shortage was due to people just not wanting to carry pennies. Instead they throw them in shoe boxes, in jars and other storage places instead of keeping them in circulation.
Again in 1999, another penny shortage occurred on the east coast. The Business Journal of August 1, 1999 discussed the billions of pennies produced by the mint in 1997 and 1998. The mint also increased its penny production to six days per week, 24 hours per day. The executive director of Americans for Common Cents commented, “There’s a close correlation in the strength of the economy and penny production.”
In the US Mint’s fiscal year 2001 annual report, the Director of the Mint’s message identified the correlation of coins and the economy. Henrietta Holsman Fore noted, “The demand for circulating coins is directly related to the economy. Since mid-2000, when the U.S. economy began to slow, demand for coins decreased. Our numismatic business also has been affected by the economic slowdown.”
Through the years, the lowly penny (or, to be proper, the one cent coin) encountered the most shortages.
Pulling from the US Mint’s annual reports, their fiscal year penny distribution through the 1990s and 2000s provides an up and down graph:
Looking at the penny distribution chart and thinking back to the economic ups and downs of the last couple of decades; does the graph show America’s economy?
At the end of the 90s and early 2000s, the increase in the graphic corresponds to the dot-com market craze. Then, after the disastrous events of September 2001, a sharp drop occurred. The economy increased in the mid-2000s only to drop in the last couple of years.
In the most recent 2010 Annual Report, the Director of the Mint commented, “The state of the American economy affects each of our business lines – circulating coins, bullion and numismatics. In FY 2010, the United States Mint performed in one of the most difficult operating environments in our 218-year history. We experienced low first and second quarter demand for circulating coins and record high demand for bullion. The high volume of gold and silver blanks required to keep up with demand for bullion stymied numismatic production for most of the fiscal year. Metal costs continued to rise.”
In fact, the first pages of the 2010 Annual Report provide the graphic illustrations of the sharp decreases in both circulating and numismatic coins over the past few years.
Long story short, a study of the US Mint’s performance with circulating coins, numismatic items and investment bullion through the years tells a large part of the nation’s economic history.