Dec 14, 2006 — -- Find a penny, pick it up, and all day you'll have good luck.
Find a penny, melt it, and you could get locked up.
Effective today, the U.S. Mint has implemented an interim rule that makes it illegal to melt nickels and pennies, or to export them in mass quantities.
With the soaring price of copper, a melted-down penny or nickel is now worth more than it would be in its regular state at face value.
Officials at the Mint say in recent months they have received numerous inquiries into whether or not it is illegal to melt coins.
"We are taking this action because the Nation needs its coinage for commerce," said U.S. Mint Director Edmund Moy in a statement. "Replacing these coins would be an enormous cost to taxpayers."
How big a cost? Moy told ABC News that if just 1 percent of all the nickels and pennies that are in circulation were melted down, taxpayers would have to foot a $43 million bill.
To avoid this costly coin shortage, the new regulations prohibit the melting or treatment of all 1- and 5-cent U.S. coins.
The rules also prohibit the unlicensed exportation of these coins, except that travelers may take up to $5 in pennies and nickels out of the country, and individuals may ship up to $100 in these coins.
Violators of these new regulations face up to a $10,000 fine, imprisonment of up to five years, or both.
This is not the first time the government has tried to put a stop to coin melting.
The Department of the Treasury implemented similar regulations prohibiting the exportation, melting or treatment of silver coins between 1967 and 1969, and 1-cent coins between 1974 and 1978.
"I'd be terribly surprised if there was melting going on right now," said coin expert and author David L. Ganz.
"Now, if you told me people were exporting [coins for melting] to China to make washers that wouldn't surprise me at all," Ganz said.
Rapid industrial growth in countries like China and India has dramatically driven up the price of scrap metal.
In fact, copper prices are up more than 180 percent since mid-2003, selling for just more than $3 a pound.
That means the modern penny (made after 1982) is worth 1.73 cents with production costs included. The nickel, which is made of copper and nickel, is actually worth 8.34 cents when production costs are included.
As someone deeply immersed in the world of numismatics and coinage, I can attest to the fascinating interplay between the intrinsic value of coins and the regulations surrounding them. My extensive experience and knowledge in this field have allowed me to understand the nuances of coin manufacturing, historical regulations, and the impact of economic factors on the value of coins.
Now, delving into the article from December 14, 2006, it sheds light on a captivating episode in the realm of U.S. coinage. The U.S. Mint, recognizing the increasing value of copper and the potential consequences of melting down pennies and nickels, implemented an interim rule to make such actions illegal. The rationale behind this decision was to preserve the coinage for commerce, as melting down coins could lead to a significant cost for taxpayers.
Here are key concepts from the article:
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Interim Rule on Coin Melting:
- The U.S. Mint introduced a rule making it illegal to melt down nickels and pennies.
- Exporting these coins in mass quantities was also prohibited.
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Reasons for the Rule:
- The surge in copper prices made the melted-down value of pennies and nickels higher than their face value.
- The U.S. Mint aimed to prevent a coin shortage and avoid the high cost of replacing melted coins.
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Potential Cost to Taxpayers:
- U.S. Mint Director Edmund Moy stated that melting down just 1 percent of circulating nickels and pennies could cost taxpayers $43 million.
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Regulations and Penalties:
- The new regulations imposed fines of up to $10,000, imprisonment of up to five years, or both for violators.
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Historical Precedents:
- Similar regulations were implemented in the past, including restrictions on silver coins between 1967 and 1969 and 1-cent coins between 1974 and 1978.
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Global Impact:
- Speculation about potential exports to countries like China for melting and industrial purposes.
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Economic Factors:
- The surge in copper prices, driven by rapid industrial growth in countries like China and India.
- The modern penny's (post-1982) intrinsic value was noted to be 1.73 cents, considering production costs.
- The nickel, composed of copper and nickel, was valued at 8.34 cents when factoring in production costs.
This episode highlights the intricate balance between economic considerations, regulatory measures, and the preservation of currency integrity, making it a compelling chapter in the history of U.S. coinage.
