Penny: History and Current Status

Penny: History and Current Status

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December 20, 2022
Penny: History and Current Status
The Secretary of the Treasury, through the U.S. Mint, is
Beginning in 1909, the penny’s obverse has featured
statutorily authorized to issue specific denominations of
President Abraham Lincoln. That year, the U.S. Mint
circulating coins (31 U.S.C. §5112). Currently, the United
redesigned the penny’s obverse to honor President
States has six circulating coin denominations—dollar, half
Lincoln’s 100th birthday. The reverse featured an image of
dollar, quarter dollar, dime, nickel, and penny. Unlike
wheat surrounding the words “One Cent” and “United
today’s circulating coins, initial coin designs did not feature
States of America.” This is known as the “Wheat Penny.”
images of U.S. Presidents; rather, they often featured
Since then, the penny’s reverse has been redesigned several
allegorical images of Liberty (depicted as a woman) and
times, often coinciding with a milestone anniversary of
other symbols of the United States.
President Lincoln. These redesigns occurred in 1959 for his
150th birthday and in 2009 for his 200th birthday. Figure 2
shows the 1909-1958, 1959-2008, and 2009 pennies.
[I]t had been a practice in Monarchies to exhibit the
Figure 2. United States Pennies, 1909-2009
figures or heads of their Kings upon their coins....
Now as we have no occasion for this aid to history,
nor any pretense to call the money of the United
States the money of our Presidents ... I am certain it
will be more agreeable to the citizens of the United
States, to see the head of Liberty on their coin, than
the heads of Presidents.
-Representative John Page (VA), Annals of Congress,
March 24, 1792, p. 484.

Penny Designs
The first penny was issued in 1793 and featured the head of
an allegorical woman with flowing hair to symbolize liberty
(obverse) and 15 chain links (reverse) meant to symbolize
the unity of the states. Figure 1 shows the design of the
first penny issued by the U.S. Mint.
Figure 1. United States Penny, 1793

Source: U.S. Mint, “The History of U.S. Circulating Coins,” at
https://www.usmint.gov/learn/history/us-circulating-coins.

Prior to 1909, the penny’s reverse featured a wreath (which

had replaced the linked chains) and the obverse images
Source: My Coin Guides, “Lincoln Wheat Cent,” at
periodically changed to include several different versions of
https://lincolncents.net/lincoln-wheat-cent; U.S. Mint, “Lincoln Penny
Liberty (1793-1856), a flying eagle (1856-1858), and the
(1959-2008),” at https://www.usmint.gov/coins/coin-medal-programs/
“Indian head” penny (1859-1908).
circulating-coins/lincoln-penny-1959-2008; and “Lincoln Bicentennial
One Cent Program,” https://www.usmint.gov/learn/coin-and-medal-
programs/lincoln-bicentennial-one-cent.
https://crsreports.congress.gov

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Penny: History and Current Status
Since 2010, the penny continues to feature President
Congress “analyzing production costs for each circulating
Lincoln on the obverse and a “Union Shield” on the
coin, cost trends for such production, and possible new
reverse. Figure 3 shows the 2022 penny.
metallic materials or technologies for the production of
circulating coins” (§3(a)).
Figure 3. United States Penny, 2022
The U.S. Mint published the most recent Biennial Report in
2020. In regard to the penny, the U.S. Mint evaluated one
potential metallic alternative. Currently, the penny consists
of copper plated zinc. The Biennial Report notes that the
U.S. Mint investigated the potential use of copper-plated
steel as an alternative. While the U.S. Mint notes that a new
penny would likely be seamless (i.e., would work
interchangeably in a vending machine or a coin counter
with current coins), it “is not expected to yield significant
cost savings, as differences in metals costs between zinc

and steel are offset by higher fabrications costs associated
Source: U.S. Mint, “Penny,” at https://www.usmint.gov/coins/coin-
with plated steel planchets” (p. 7). Unlike the current
medal-programs/circulating-coins/penny.
penny, however, the new metallic blend might “enable

Issues for Consideration
multiple suppliers, providing a longer term economic
advantage” (p. 7).
In recent Congresses, legislation has been introduced to
address the cost of production, metallic content, and the
Elimination of the Penny
potential elimination of the penny.
In 2021, the U.S. Mint produced 7.613 billion pennies. Past
analysis has found that approximately one-third of pennies
Cost of Producing the Penny
circulate. This means that, as one observer put it, “for
The U.S. Mint sells coins at face value to the Federal
almost two-thirds of the billions of pennies produced, the
Reserve Banks for circulation. In its 2021 Annual Report
trip from the Mint to the Federal Reserve to the commercial
(p. 8), the U.S. Mint recorded $382.2 million in seigniorage
banks and finally to the consumers is a one-way trip, and
(i.e., the difference between the face value and cost of
they are not seen again in circulation” (House Financial
producing circulating coins) and $106.3 million in net
Services Hearing, The Future of the 1-Cent Coin, July 16,
income from numismatic products (i.e., high quality
1996, p. 4).
versions of coins for collections). Within the seigniorage
amount, the 2021 cost to produce a penny was 2.10 cents,
In consideration of the penny’s circulation, various
the 16th consecutive year where it cost more than one cent
legislative proposals have attempted to (1) temporarily
for the U.S. Mint to make a penny, and up 19% over 2020
suspend the penny’s production, or (2) eliminate the penny
(p. 10).
from circulating U.S. currency. Additionally, some of these
proposals would prescribe guidelines for rounding cash
Historically, some Members of Congress have introduced
transactions to the nearest five cents.
legislation to address the cost of the penny. The most
frequent proposal is to request the Government
Proponents of the penny’s elimination cite the potential to
Accountability Office (GAO) to study the cost of coin
save money, to free up U.S. Mint production capacity to
production. None of these measures has been enacted.
focus on higher-denomination coins that have a higher
margin (U.S. Coin Task Force Final Report 2022, p. 17, fn
GAO officials have testified before Congress on the cost of
41), and that other countries (e.g., Canada, Australia, and
the penny. For example, during a 1996 House Banking and
New Zealand) have eliminated their one-cent equivalent
Financial Services Committee hearing, GAO stated that
coin. Opponents generally focus on the potential to create a
when discussing the future of the penny, factors such as
price shift or “rounding tax” on cash transactions (Lobmra,
“government costs, public attitudes, budgetary and
“Eliminating the Penny from the U.S. Coinage System: An
operational impacts on the Mint and Mint contractors, and
Economic Analysis 2001,” Eastern Economic Journal, p.
the fairness of rounding prices to the closest 5-cent
433) and nostalgia for the penny.
increment, warrant congressional consideration” (GAO/T-
GGD-96-153).
For more information on the design of circulating coinage,
see CRS In Focus IF11190, U.S. Dollar Coins: History and
Metallic Content
Current Status; CRS In Focus IF11394, Quarter and Half
Congress prescribes the size, weight, and the metallic
Dollar Coins: History and Current Status; CRS In Focus
content for circulating coins (31 U.S.C. §5112). Changes to
IF11773, Redesigning Circulating Quarters, Half Dollars,
weight or metallic content would likely require legislation.
and Dollar Coins: Current and Future Designs; and CRS
To assist in the potential determination of future metallic
Report R45716, The Potential Decline of Cash Usage and
content of circulating coins, the Coin Modernization,
Related Implications.
Oversight and Continuity Act (P.L. 111-302) gave the
Secretary of the Treasury the authority to “conduct any
Jacob R. Straus, Specialist on the Congress
appropriate testing of appropriate coinage metallic
materials” [§2(a)(1)] and requires a biennial report to
IF12293
https://crsreports.congress.gov

Penny: History and Current Status

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