Does End of Cent Mean End of Coins?|
October 28, 2013
Canada has eliminated the cent. Several countries in the European Union are considering eliminating the 1- and 2-cent coins. Could we be seeing the slow demise of coins as money?
I doubt it. As low denominations that are no longer of any use due to inflation are eliminated higher denomination coins continue to replace low denomination bank notes as being more practical economically. Canada may have eliminated the cent, but it has issued a $2 coin. While there are many people who see any form of physical money as a relic of the past, metal coins are still the base from which all monetary systems evolve. Electronic payments are the same as unbacked or fiat paper money. Eliminating coins would be like building a house without a foundation while assuming we no longer have a use for a foundation.
Ireland is considering elimination of the 1- and 2-eurocent coins. Are they the only member of the European Union’s euro zone considering such a move?
Finland and the Netherlands have already eliminated production of these two denominations, although the coins remain as legal tender. According to the European Commission, to issue coins it has cost European Union members participating in the currency union 1.4 billion euros or about $1.8 billion in U.S. funds over the last 11 years.
Has this trend of elimination of small denomination coins while new higher denomination coins are introduced ever happened before historically?
Look to the Roman Empire. The silver denarius in the time of its first emperor, Augustus, was the mainstay, with many skilled craftsmen earning one denarius per day. The coin evolved into a low grade silver issue, then into a silver washed coin, then finally into a bronze or copper issue. In the meantime the double denarius or antoninianus was introduced, going the same route of metal content debasement. The Romans didn’t have paper money or electronic payment systems or they likely would have used them as we are now witnessing.
Why did Germany continue the lowly 1-pfennig coin denomination throughout the 20th century while other nearby countries eliminated coins of the same value due to inflation that impacted all of them?
Perseverance and a determined attempt to curb inflation are the answer. When runaway inflation destroyed the German currency system following World War I the issuance of ever-increasing bank note denominations were finally brought under control when the fiat money was backed by government-owned real estate.
How was the value of barter items such as clam shell established?
Records of transactions involving these primitive money items survive. In general the further from the source, that being the ocean, the more valuable a shell would become in trade. The value was often negotiable rather than set, depending on where you were. Some odd and curious money was factory produced such as the porcelain dog tooth money Germans traded in the region of the South Pacific. The Germans found these to be easier to obtain than were the real thing.
Are there any modern instances in which odd and curious money has been used in recent history?
Cigarettes, alcohol, and candy were used as barter by soldiers during the 20th century and may still be barter in war zones where troops are now involved. Swedish plate money of the 17th and 18th centuries falls into this category. More primitive forms of odd and curious money appear to be out of favor.
Wasn’t there a custom regarding an English silver sixpence and a newborn child?
A custom that appears to have originated in Oxfordshire was to place a sixpence in the newborn child’s right hand. Omens were to be read from the manner in which the child clutched the coin. If the coin was grasped tightly the child was anticipated to grow up to be a miser. The child would become generous if the coin was held loosely, while if the child were to drop the coin it was interpreted the child would become a spendthrift.
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On October 31, 2013 gman
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