Pound wise, is the penny foolish?
Sunday, March 30, 2008 at 1:04AM It has been a tough week!
Jr. came home from school with an assignment where the teacher had a simple comment, "barely meets standard". The assignment was on counting coins!
Considering that she can do upto adding 8+ a number less than 10, it would be surprising if she could count money. The thing that annoyed me was that in spite of spending an hour with her, it was not easy to teach because there are some fundamental problems with counting money, as seen in the eyes of a kindergardener!
There are also some fundamental problems with seeing money the way it is, in the eyes of a metallurgist!
Here is part primer, part facts, part frustration on what I call "Monetary economics"!
First a quick photo tour of the coins in one shot and some related facts the kids are supposed to remember! (this is on top of the counting).
Pictured in front and back are the most common penny, nickel, dime and quarter. The pictures are those of :
Lincoln / Lincoln Memorial
Jefferson / Monticello
Roosevelt / Wreath
Washington / The Bald Eagle
That said, the coins in the USA are not exactly easy to grasp. Why?
We don't call them 1 cent, 5 cents, 10 cents and 25 cents. We have to call them penny, nickel, dime and quarter respectively. That is one additional layer of memorization that has to be registered. Mentally they have to convert dime to ten before doing a transation. Any guy worth his computational salt will tell you that it is inefficiency built into the counting process.
Next, the coins do not go from smallest to biggest in size (or biggest to smallest like in other countries where the higher denomiations are made of more precious metal and end up smaller coins)! The Nickel sticks out like a, well sore nickel!
Third, the color and lustre of the coins does not show any gradual change from copper to silvery metal. The nickel is dull. The quarter is equally dull considering its composition is the same as the nickel but somehow the finishing leaves it slightly more shiny! The penny is in a world of its own.
As a kid, it would be difficult if the monetary value did not follow the sequence in nomenclature, size, weight, color or texture!
That left me puzzled. That did not make any sense. One would assume(if you have an undergraduate degree in Metallurgy), that the monetary value of a coin is in some way related to the metal content! That said, daddy faded into the background earlier this afternoon and Metallurgist took over. After going through the web for various facts and fact checking, I present to you the table below:
Have not found any table as a quick reference guide yet on my web surfing, so who knows this compilation might actually find some use!
Now for some facts. The US Mint kept changing metallic compositions of the various coins because as metal prices fluctuated, the cost of making certain coins was significantly more than the value of a coin!
If you look at the old compositions of coins at todays metal prices it looks like the quarter will be worth $2.9 and a dime worth $1.15 and the penny would be worth 2 cents! Understandably zinc got subsituted for copper and the silver is all gone from today's currency. Still by todays standard, the metal value of these coins is not a 1:5:10:25 but a 1:11:4:10. Again, it is the nickel that sticks out and it is the root cause of all counting mistakes made by Jr.!
The penny makes sense today having a metal value of 0.6 cents (sure there is manufacturing cost, which would be hard to keep at 0.4 cents in the future, unless the manufacturing eventually moves to China. A thought which has been considered by economists!).
Pound wise, it is the Nickel that does not make sense!
Hopefully, will be able to teach Jr. to count money...
.
Reader Comments (6)
'Mentally they have to convert dime to ten before doing a transation. Any guy worth his computational salt will tell you that it is inefficiency built into the counting process.'
something tells me that this is a veiled attempt (conspiracy theory, anybody?) at manufacturing better mathematicians and programmers in the usa. unknown variables will no longer be referred to as x or y; kids will use dime, nickel, penny etc instead! ;-)
- s.b.
There are two problems with US coinage (US dollar bills are another issue altogether):
(1) With inflation, it's better to not have 1c coins any more.
(2) The nickel, metallurgically, makes no sense.
That's why most economists don't just say "get rid of the penny". Instead, they suggest getting rid of the current nickel coin. Then, get rid of the 1c denomination and make a copper coin similar to the current penny coin worth 5c.
There is an interesting story on oldcoinnews.com (whats in your wallet) about how even college kids have problems with money.
s.b., if that was the idea, looks like it is not working!
lak, will bet you it will never happen..
Dale, that was one interesting article.. didnt know the history behind the wigs!
this coin/note issue is there for most adults itself - poor kids, no wonder they find it difficult. I usually mistake the 10 dollar (SGD) note here for our 20 rupee in india. so i might mostly pay jus 10 bucks and wait for the change wherein the cashier wud be staring at me for remaining money
Simplify. Simplify. Well, these blokes need some lessons on simplify. I can bet your (sore) nickel on it !!