One-Dollar Coin

Reintroduction Could Save Millions if Properly Managed Gao ID: GGD-93-56 March 11, 1993

Australia, Canada, Japan, and the major Western European countries all now use a coin for monetary transactions at, or above, the level for which Americans use the paper dollar. The Susan B. Anthony $1 coin, introduced in the United States in 1979, was rejected by the public. In light of recent proposed legislation that would reintroduce a $1 coin in the United States, GAO examined Canada's experience. In GAO's view, public resistance to converting to a coin dollar could be minor and short-lived and could be properly managed, as it was in Canada. GAO also believes that, in a period of difficult and unpopular deficit reduction measures, the prospect of obtaining nearly $400 million in annual budget savings through updating the nation's coinage is likely to be a relatively painless sacrifice for most Americans.

GAO found that: (1) the majority of public resistance to the Canadian $1 coin was limited and short-term; (2) a 1992 survey indicated that 32 percent of the respondents felt more favorable about the coin since its introduction, 32 percent were neutral, and 18 percent disapproved of it; (3) businesses and associations responding to a GAO survey indicated that public resistance lasted between 3 months and 2 years; (4) the United States could save an average of $395 million per year over 30 years by substituting the $1 coin for the $1 note; (5) the $1 coin would save an average of $109 million in printing costs, $47 million in lower Federal Reserve processing costs, $430 million in interest avoided from decreased government borrowing, $20 million in start-up costs, and $171 million in lost earnings on $1 notes issued by the Federal Reserve System; and (6) in introducing a $1 coin, Canada ensured that the coin differed from existing coinage, withdrew the $1 note from circulation, and effectively countered negative press coverage and public complaints, unlike the U.S. government when it introduced a $1 coin in 1979.

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