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Coins -A lesson in small change

May 31, 2002|by LISA TEDRICK PREJEAN

My son shook his head as he finished his math assignment.

"Mommy, it just doesn't make sense. Why is a dime smaller than a nickel if it's worth more?"

Good question.

It would seem that the smallest coin would be worth the smallest amount and that coins would increase in size as they increase in value.

The answer to his question goes back to the 1790s when our newly formed federal government began issuing coins.

Coins were made of precious metal and were worth approximately the value of the metal in them - plus the cost of minting and usually some profit, Dr. Alan M. Stahl, visiting professor, department of history at Rice University in Houston, Texas, explained in an e-mail.

"Nowadays, all of our coins are made of base metal, and we could change to appropriately graduated sizes ... but we stick with what we're familiar with out of a basically conservative approach to coinage - other than the new, temporary, state quarter reverses and the virtually non-circulating Sacagawea dollar, our coin designs are all decades old," Stahl said.

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"So, the American penny was always made of copper - and was originally much bigger than it is today - and higher denominations were made of the more valuable silver. Eventually, inflation caused all of the coins to shrink, to the point at which a 5-cent piece made of silver would have been too small to use comfortably (that is, it would have been half as big as the dime). So it was decided to use nickel, a relatively low-value metal ... resulting in a 5-cent coin larger than the 1-cent copper piece and the 10-cent silver piece."

Today the penny is a zinc coin coated with copper. A nickel is made from nickel. Dimes, quarters and half dollars have copper centers with a nickel coating.

Did you know?

These coinage tidbits come from Stephen Bobbitt, public relations officer for the American Numismatic Association, a nonprofit, educational organization chartered by the United States Congress. The association promotes the study and collection of money - including coins, tokens, medals and paper currency - for research, interpretation and preservation of history, according to its Web site, www.money.org:

-- George Washington did not want his or any other person's portrait on U.S. coins, saying it was too similar to kings and emperors having their faces on money. Until 1909, when Abraham Lincoln's portrait was put on the penny, American coins had Lady Liberty portrayed in a variety of forms, including with an Indian feathered bonnet on the Indian Head cent.

-- Washington's portrait first appeared on the quarter in 1932. It was supposed to be a one-year circulating commemorative coin, marking the 200th anniversary of the first president's birth. His portrait remains today. (The 50 state quarters now in circulation are also known as circulating commemorative coins and are available at face value. The Mint also produces other non-circulating commemorative coins for various programs and events, like the Olympic games. However, these are sold individually and/or in sets at a premium.)

-- The first 1-cent coins, issued from 1793 to 1857, were about the size of today's $1 Sacagawea coin.

-- The federal government did not begin printing paper money until the time of the Civil War. It was green on one side to prevent counterfeiting. Color photography was not available at that time. These bills were called "greenbacks."

-- In July 2003, the Bureau for Engraving and Printing will begin issuing newly designed paper money in various colors.

-- The U.S. Mint estimates that 125 million to 150 million people are collecting state quarters. Before the state quarters were produced, the Mint produced 2 billion quarters a year. Now it produces 1 billion per state. (There are five states issued each year.)

-- To learn more, Bobbitt recommends adding a copy of "The Official Red Book: A Guide Book of United States Coins" by R.S. Yeoman to your home library.

Lisa Tedrick Prejean writes a weekly column for The Herald-Mail's Family page. Send e-mail to her at lisap@herald-mail.com.

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