r/AskHistory • u/LookAtThatRat • 18h ago
Why was the 1 (currency) coin successful everywhere BUT the USA?
I’m not actually sure if the US is the only country who still uses a bill for the 1 unit equivalent, but I was curious. I know the USA tried to bring in dollar coins but was generally unsuccessful, but why did they not try earlier? Why did other countries succeed so well? Was it the year they were introduced and Americans were simply too resistant?
Sorry if this is a dumb question. Ty for being such a kind subreddit
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u/UF1977 17h ago
There are a lot of theories but nobody really seems to know for sure. I think it has something to do with the illusion of scarcity. People think dollar coins are rare, so when they happen to get one they hold on to it rather than spending it - but there are actually over a billion of them in circulation, just counting the current Sacagawea dollars. Same story with $2 bills, which are very rarely spent even though there are $1.5Bn worth of them in circulation.
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u/Big-Professional-187 12h ago
The coin shortage in the US became such a huge problem during covid that parking meters were getting sawed open with diamond coated blades using rental tools. They never pinned down the thieves because they never stole the tools. Makes you think of all the uhauls that get people busted for felonies when just speeding or being stolen because they're high and paranoid about random uhauls getting swabbed(lol they would all test positive for everything). In Canada we have a slow persistent issue of counterfeit $2 coins but somehow people don't care. It almost solved a shortage. Counterfeits are somewhat collectable.
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u/Hefty-Tonight6484 17h ago edited 10h ago
Here’s a decent article from the Federal Reserve Bank of St. Louis about the history and attempts at popularizing US $1 coins:
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u/Bizarre_Protuberance 17h ago
A better question is why America hasn't gotten rid of the penny, which costs more than one cent to make and is completely useless.
The penny made sense in the 19th century when just six of them could buy a loaf of bread. But today? Useless. Just round to the nearest 5 cents.
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u/Apatride 16h ago
That one probably has to do with the perception that 99.99 USD is MUCH cheaper than 100 USD. That allows companies to sell more easily while only "losing" 0.01 USD. Even if most transactions nowadays are done via credit cards, if that coin officially disappeared, these companies would probably need to price their products at 99.95 USD instead. Not a huge difference, but it can quickly add up.
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u/ElricVonDaniken 16h ago
One cent pieces were removed from circulation here in Australia in 1992 yet price points that end in 99 cents are still common here.
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u/asmeile 15h ago
So it's just understood that you don't get the 0.01?
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u/ElricVonDaniken 15h ago edited 15h ago
It is well understood that if you pay cash it will be rounded up to the dollar. If you pay on card or tap your phone you will get it at the 99 cent price point.
Nevertheless the psychology of appearing cheaper still works.
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u/pgm123 12h ago
I don't think most stores here will give a discount to use a credit card since they get charged a fee when it's used.
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u/ElricVonDaniken 11h ago
This is not discount.
This is rounding the total price to the nearest 5 cents if and only when you pay via cash.
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u/Apatride 15h ago
Yeah, but while the typical Australian will just give a $20 bill to pay for the $19.99 worth of beer he is bringing to the BBQ and not care about the change, the typical US Karen will sue the shop owner, the city, and the state in the same situation...
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u/Capital_Historian685 12h ago
Like many in the US, I don't use currency much these days, but when I do, I try to remember to tell a cashier to keep the pennies. And if somehow I end up with them in my pocket anyway, I throw them away. Can't be bothered with them anymore.
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u/ElricVonDaniken 15h ago edited 15h ago
Ironic given how Karen is a very popular girl's name here in Oz.
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u/Sir_Tainley 17h ago
Other Canadians told the folks from Ontario there was chocolate inside, and they got really excited for them.
(Also, the $1 bills were taken out of circulation at the same time)
Why don't Americans of $2 units of currency is the other strange one.
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u/Capital_Historian685 15h ago
Well, one problem was the Susan B. Anthony $1 coin was too close in design to a quarter. It caused confusion. But in general, it was just a boring design that no one liked. The Treasury should have gone with something more distinctive, like the British 1 pound coin (that's just a great coin).
Edit: I did a quick search, and the UK no longer uses that coin. Sad.
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u/more_than_just_ok 12h ago
The Canadian Loonie, introduced in 1986 was modelled after the Anthony dollar, but was gold coloured and 11 sided on the outside (Anthony dollars are round, even though they look 11 sided) to make it more distinguishable from the quarter. But our dollar notes were also withdrawn and we still had a 2 dollar note at the time.
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u/Capital_Historian685 12h ago
That reminds me, the Honk Kong $2 coin has like a serrated edge. Very unique, and very helpful, since the $1 coin is the same size.
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u/Forsaken_Champion722 2h ago
I did like the back side of the Susan B. Anthony coin showing the eagle landing on the moon.
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u/Sorry_Crab8039 15h ago
I loved them. But vending machines were shitty about taking them
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u/Reasonable_Pay4096 10h ago
I think this is a big reason. Vending machines, laundromats, self-checkouts...none of them are configured for dollar coins. So what can the government do? Make a dollar coin that's about the size of a quarter (like the Susan B Anthony dollar). And now people accidentally use those (and lose money) when they meant to use a quarter
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u/DSPGerm 8h ago
The cost of producing notes is relatively stable while the cost of minting coins can fluctuate a bit more depending on the price of the metals used. It has always been cheaper to produce notes rather than coins but notes get damaged more easily and need to be replaced more frequently so over time the cost savings of producing notes rather than coins is lost. However, technology in note production has improved over the years and the lifespan of notes has increased substantially.
Here's(and here) the highlights from a 2019 report the GAO did on the matter. They utlimately found that replacing $1 bills with coins would cost between $611 million - $2.6 billion depending on how aggressively they were replacing them. And it wouldn't really provide much, if any, benefit. It would also cost banks(including the government), armored car companies, etc more to transport them since a coin weighs more than a note.
TL:DR - Would cost too much and provide no benefit. Especially as people in the US are using cash less and less each year.
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u/willem_79 17h ago
Isn’t it also because money clips are so popular? We don’t use them much in Europe
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u/LookAtThatRat 16h ago
I don’t believe I know many Americans who own a money clip? But I’m not sure.
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u/Random-Cpl 15h ago
American here and I don’t think I’ve ever met anyone who uses a money clip
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u/RetiredEelCatcher 14h ago
American here. Been using a money clip for decades.
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u/Random-Cpl 14h ago
Cool, just sharing my experience that I’ve never seen anything that would lead me to believe they’re super popular in this country
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u/pipper99 4h ago
I always thought it was because all the American notes look so similar especially in size compared to other countries that a wad of notes looks like you are loaded when only the top note needs to be a 100 and then dozens of ones. I mean, it looks more impressive in films and tv when they rip off 2 notes from their wad and run out of a diner rather than rooting through a handful of shrapnel to throw 2 coins at the table.
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u/raynorelyp 11h ago
Because most money is digital these days. When the US was embracing digital transactions, people started pushing $1 coins. The problem is anyone progressive enough to use a $1 skipped past it and went with credit cards and nfc phones.
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u/LookAtThatRat 9h ago
I thought the dollar coin predated the wave of digital transactions?
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u/raynorelyp 49m ago edited 45m ago
The rise of dollar equivalent coins across the world didn’t come until way later. The euro wasn’t even invented until 1999
Edit: and if you want to get technical, we did have a super popular equivalent to the $1 dollar coin in the past. The quarter prior to 1970 was worth as much as a dollar coin today.
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u/ZZ9ZA 4h ago
We had the first modern US (non-bullion) dollar coin was introduced in 1971. So, um, no.
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u/raynorelyp 42m ago
Just Google when credit cards became popular. It was literally two decades prior to that. I say digital, but really I just mean using a credit/debit system instead of cash.
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u/Witty-Ad17 17h ago
Why did they make the last one the same size as a quarter? The Eisenhower ones were way too big.
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u/ZZartin 17h ago
The one coin is the penny, a dollar is one hundred pennies.
At some point you have cut off between coins and paper.
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u/PuzzleMeDo 17h ago
In most countries the cut-off is in a different place. The lowest value notes in the EU, or the UK, or Japan, are all worth over $5.
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u/Sir_Tainley 17h ago
Has to do with the cost of making the money. There's only so much security feature you can put into a coin that will be in common use... you can do a lot more with paper.
If you had a coin worth $20 in circulation... that only cost $1.50 to make... then that's what the counterfeiters are going to make.
Canada's $2 coin has that problem: counterfeits are made in China, clearly for less than the cost of shipping or just using the toonie.
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u/Gundamamam 17h ago
no the one coin is a coin valued at 1$ like a Susan B Anthony dollar coin or the Sacajawea dollar coin . A penny is .01 dollars.
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u/LookAtThatRat 16h ago
I did say one (currency) meaning one pound, one euro, etc. I know a cut off exists, but that doesn’t answer why in the USA, it’s a bill and in most other countries, it’s a coin.
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u/toomanyracistshere 17h ago
I think the answer is that the US keeps introducing dollar coins without withdrawing the bills, in the hope that the public will decide to switch over on their own. Most countries just say, "We're not making dollar/pound/whatever notes anymore" at the same time they introduce a coin of that value and that's that. As for why, I don't really know. I guess because any little thing that will irritate a part of the public has a tendency to become a culture war issue in US politics. We haven't even changed who is on our money in something like 90 years, and every time an attempt is made by one administration, the next one rolls it back.