One dollar coinA billion dollars in unwanted American dollar coins sits in specially-made vaults the size of soccer fields in Texas and Baltimore and other undisclosed locations. They're heavily guarded -- according to NPR's Planet Money team, even journalists must be watched carefully as they check out the "clear plastic bags piled high on sturdy metal pallets that looked like baby cribs," 1,000 coins per bag, about 35 pounds a piece.

But why are they just sitting there? A recent example from my own life illustrates the problem.

A few weeks ago, I got a dollar coin as change from a farmer's market stand. "I'm sorry," said the cashier. "It's all we have." It was special enough to keep, but one day I needed $2.05 for the bus and could only find a dollar's worth of quarters in a rush. Dropping that gold coin into the fare box may have been the last time I'll see one of those for weeks -- or longer.

Even though I love them ("No apology necessary!" I had said to that cashier, taking the legal tender eagerly), I seem to be in the minority -- the demand for dollar coins over the past several decades has continued to underwhelm experts in monetary policy. The fact is, people just don't want them.

And the demand -- or rather, the lack of it -- is one half of the reason those coins are just sitting in vaults, collecting dust.

The other half of the equation -- the supply side -- goes like this: Congress passed a law.

In 2005, Rep. Mike Castle -- a Republican from Delaware who has since left office -- sponsored The Presidential $1 Coin Act, a law that requires the U.S. Mint to create tender that displays "each former President of the United States on the dollar coin, in succession, for a 10-year period," according to Rep. Carolyn Maloney, the bill's co-sponsor.

So as not to mess with the good people of North Dakota, who claim Sacagawea as their own, the law also requires that one new Sacagawea coin must be made for every four Presidential coins or other dollar coins produced. And the new presidential coins made each year must be enough to "satisfy initial demand," a different amount for each coin -- an estimate that means another billion of the dollar coins will be protected by the time the Obama coin is made, in 2016 sometime.

But Americans just don't like dollar coins, a mystery that economists and social anthropologists have never quite been able to figure out. It's too bad: Dollar bills wear out in about 18 months, vs. 30 years for a coin, making coins far more economical for the mint (given the assumption that we're not producing and protecting them in unwanted mountains).

Europeans have adopted and use coins for similar denominations. But Americans are nothing if not obstinate: Decades of trying to get the public to accept them and use them, up to and including recent expensive marketing campaigns, just won't work. I like 'em; my kids like 'em. Sadly, this just isn't enough to keep them out of their vault cribs.

The next presidential coin? Rutherford B. Hayes, followed by such popular, scintillating historical figures as James A. Garfield and Chester A. Arthur. Yes, there was a president named Chester Arthur. Will you buy his coin?

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nodreklaw

This is an easy problem to solve. Quite simply, quit printing dollar bills. Take away the choice. That is what other first world governments have done. Canada, Australia, England(UK), and the EU. This comes from having politicians with no balls.

February 28 2012 at 3:34 PM Report abuse rate up rate down Reply
rktan

The dollar coins wouldn't bother me. I'd much rather have those in circulation than pennies. Why does the government continue to mint useless, annoying, essentially worthless (indivudually) pennies?

February 28 2012 at 11:57 AM Report abuse rate up rate down Reply
dande98214

they would work if the government wasn't so stupid in the design of these coins, look at the parade of coins they have tried to make work, the susan b anthony looked exactly like a quarter, then came the sacajwea coin looked and felt like a quarter, then comes the presidential coin it looks and feels like a quarter do you get it . look at canada for health care example and how do succesfully introduce a dollar coin.

February 21 2012 at 8:44 AM Report abuse rate up rate down Reply
caroldonab

We need to get all of the Merchants, and Banks in one room and work out what is best for American Commerce. The problem with the dollar coin is the similiar size of the quarter. I believe we need to eliminate the penny and the nickel and change the size of the half dollar and eliminate the paper dollar.

Commerce does not want to make any big change because their cashier's stations are already set up for the current system. In order to use a dollar coin, baniks and retailers must redo there systems for transacting business.
Gov't must listen to commerce and follow, something the gov't has difficulty doing.
Once everyone agrees (the gov't, banks, and Retailers) change could be instituted quickly.

Don

W

February 11 2012 at 12:30 PM Report abuse rate up rate down Reply
Scottilla

Why is the US making money nobody wants? A better question is Why is the US wasting money making dollar bills that cost far more than the alternative, and cents that cost far more than they are worth? There is no reason that you should need paper money to buy a newspaper, a cup of coffee, a quart of milk or a loaf of bread. These are small purchases for which a coin or two should suffice. And for the argument that a pocketful of coins weighs more than a pocketful of dollar bills, how many dollar bills do you have in your pocket right now? The dollar coins can be put into the penny drawer of the cash register.

February 01 2012 at 9:34 AM Report abuse rate up rate down Reply
briharwell

Really tired of seeing this article. So much going on in the financial world and all we get is reruns.

December 12 2011 at 9:57 PM Report abuse rate up rate down Reply
cubana14

AMAZING! So Histh45 and Mike 146681 are "knuckleheads" for providing a viable solution to a systemic problem. The replacement of the one dollar bill with a one dollar coin wouldn't create a pocketful of heavy coins as John/ Julie G. suggest because the $2 bill would become more attractive for everyday consumers. If the U.S. were to go the way of Canada, and replace the $2 bill with a $2 coin as well, then you have a problem. Perhaps the true "knuckleheads" are those who do not understand how to make change when the $2 bill is in play. I have witnessed bank tellers who are confused by them, let alone your average American.

October 31 2011 at 8:07 PM Report abuse rate up rate down Reply
John/Julie G.

RE: Replacing dollar bill with dollar coin. Sugesst the "knuckleheads" who push this ill conceived idea need to go
to England and walk around with about five of British one pounders in your pocket or purse for a week or two.
You'll be glad to get back to the USA and dollar bills. Been there done that; also try walking around with four or five Canadian
"loonies" in your pocket, you'll need leather pockets and suspenders.
jg

October 26 2011 at 10:30 PM Report abuse rate up rate down Reply
fair325

They probably would have sold more if they knew how to promote them , many people didnt evenknow about them, all that they needed was posters in banks and stores, thay do make nice collections for grandkids. Guess we have to educate the government

October 12 2011 at 10:44 PM Report abuse rate up rate down Reply
Somebody

Today most of our money is created by private banks in the form of checkbook money. While the congress is left to mint coins. Today, in America, which is a nation of slaves, people are working hard for a life time to pay interest for money that was created out of nothing by the private banks. Google for "how do banks create money" to understand why you are a slave.

September 27 2011 at 1:24 AM Report abuse +1 rate up rate down Reply