Keep your nickels and pennies
With specialty metal prices reaching all-time highs, the U.S. Treasury Department is concerned that the country’s five-cent and one-cent coins are being exported and melted.
Treasury issued an interim rule on Wednesday prohibiting the export and melting of U.S. nickels and pennies. The rule is effective until April 14, 2007.
Treasury noted in the interim rule that the metals in nickels and pennies — namely copper, nickel and zinc — are sought after by scrap dealers.
Without these interim regulations, Treasury estimates that the lost coinage would result in a replenishment cost for taxpayers in excess of $1 million per day. “At current metal prices, the profit potential from recycling 5-cent and one-cent coins to reclaim copper, nickel and zinc is sufficiently lucrative to affect these dangers in a very short time period,” the Treasury said.
“Accordingly, the extraction of even relatively small amounts of these coins from circulation could have a significant impact on the United States Mint’s ability to produce sufficient volumes of these coins to meet the needs of commerce,” the department added.
The Treasury has the authority to invoke special protections for coins under the 1965 Coinage Act. In 1967, during the transition from silver to cupro-nickel clad coins the Treasury prohibited the export and melting of all silver coins, and again in 1974 to “stem the unprecedented increase in demand for one-cent coins attributable to speculation that the metal content of the coin would soon exceed its face value.” Both regulations were rescinded in 1969 and 1978, respectively.
Before the current interim rule took effect, it was not unlawful to destroy U.S. nickels and pennies.
“The numerous inquiries that the United States Mint receives, asking whether it is legal to melt one-cent coins, suggests that there is a widely-held belief among the general public that destroying United States coins is either unlawful or, at the very least, unseemly,” the Treasury said.
Treasury opted for the interim rule rather than issuing a traditional proposed rulemaking, a lengthy process involving a public comment period before a final rule is published, to prevent a rush to destroy nickels and pennies.
“Once a notice of proposed rulemaking publicly reinforces that there is no current prohibition against melting the nation’s coins for profit, the sale of massive quantities of 5-cent coins and one-cent coins to recycling firms as scrap metal can be accomplished very quickly, causing a precipitous shortage of these denominations,” the Treasury said.
Keep your nickels and pennies
