1943-steel-penny There’s been talk on and off of doing away with the US one-cent piece for awhile now. It’s nothing new to hear about the impending demise of the penny. It really wouldn’t hurt my feelings to see this relic go - we all hate to get them in change. But for better or worse, the penny is going to stick around awhile longer. There is still a problem though - the cost.

Pennies cost more than $.01 to make

The government earns a profit on the difference between the cost to manufacture a piece of money, and it’s face value - something called seigniorage. A $1 bill costs roughly 3.8 cents ( $.038 ) to make, and is worth $1. That means the US government profits $.962 - over 96 cents, each time they print a dollar bill. Not a bad business to be in. The penny is a different story though. Current pennies are made of a copper & zinc alloy, and both metals cost more than they used to. Today, a penny costs nearly 2 cents to create. About $.018 to be exact. Every time the US Mint creates a penny, the Government loses .8 of a cent - that adds up in a big hurry! Over $7 billion pennies were minted last year, so that works out to a cool $59 million loss - just in pennies!

A page from the history books

Old timers remember this funny looking penny to the left - the 1943 steel cent. Way back then, during World War II, copper was in great demand for the war - particularly for ammo. At the time, pennies were about 95% copper. As such, the Mint created a zinc-plated steel penny, to conserve copper for the war. This penny was only issued in 1943, due to one major flaw. The zinc coating wasn’t very good, and didn’t cover the edges. Bare steel rusts very quickly, especially when in contact with sweat. Many of the steel cents you find today are quite rusted and rough looking due to this.

Welcome back, steel

1943-steel-penny-back

Replacing the copper / zinc alloy used today with steel is an idea on the table. A better galvanization process will be used, so the zinc will cover the entire coin ( edges included ). That will resolve the only problem with the old steel pennies, and it will get the cost of a penny back under 1 cent. It will look strange once again, but I think it’s kind of neat. Maybe we all need to look at some US steel company stocks. All the steel from those pennies will have to come from somewhere.

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