Is U.S. Ready to See the Dollar Bill Pass?

Ali Khan peels greenbacks from a thick wad to make change as he hawks shirts, shades and sun visors outside the Treasury building. He’d rather deal in dollar bills and thinks a plan to replace them with coins is a big clinker.

“If I had all these coins in my pocket, I wouldn’t be able to move,” he says. “Coins are just trouble.”

Plans to replace the $1 bill with a coin have floated around Congress for years, but the idea appears headed toward a vote this time as part of Republican leadership plans to banish the buck to save dollars and cut the deficit.

But inside the Treasury Department, government officials argue against retiring old George Washington, on the currency since 1869.

“This is another attempt to force the American people to accept something they’ve rejected twice in the past 25 years,” says Mint Director Philip N. Diehl, who’s afraid more $1 coins will end up in storage than in stores.

Remember the 1970s-era Eisenhower dollar, a near coaster-size coin? How about the Susan B. Anthony, minted in 1979? Three hundred million of those are now in government storage. The Eisenhower was too bulky to be popular, and the “Susie B” too closely resembled the quarter, causing confusion. Americans resisted change and kept using paper.

Rep. Jim Kolbe (R-Ariz.) specifies in his bill that the greenback must be eliminated with introduction of a coin--a formula that has succeeded in other industrialized nations. Americans who would rather fight than switch will just have to grumble instead.

“People will get used to it,” said Kolbe, who comes from one of the biggest copper-producing states. “It’s long overdue.”

Australia, Canada, France, Japan, Britain and Spain are among countries to have replaced small-denomination bills with coins in recent years.

Under Kolbe’s proposal, the dollar coin would be a bit more than an inch in diameter--or 40% larger than the quarter--and would be distinguished by a smooth edge and gold color.

The Treasury would decide who or what would grace its surfaces.

The House Banking subcommittee has had a hearing on Kolbe’s bill, and it plans another on currency issues this summer, under Chairman Michael N. Castle (R-Del.). The former chairman, Rep. Joseph Kennedy (D-Mass.), has refused to hear the coin idea, despite the fact that 238 lawmakers stated their support for it last year.

Crane & Co., which makes paper for U.S. currency, is situated in Kennedy’s district, but the congressman says he rejected the proposal because he was not satisfied the change would save money or be popular.

Crane is behind Save the Greenback, a group formed last year to fight attempts to eliminate $1 bills. Other members include printers’ and machinists’ unions that have a stake in the outcome.

On the other side, there’s the Coin Coalition, which includes groups such as the copper industry, transit authorities, soft-drink distributors, amusement parks, concessionaires and others that could benefit.

“I was amazed there were so many special-interest groups on this,” said Castle, who added that his office has noticed significant interest among senior citizens too.

“Some issues are really removed from the public, but there isn’t a single person who doesn’t handle a $1 bill every day,” he said. “Whichever way this goes, we’re not going to win any popularity contests.”