Return

Sacagawea returned to America last month. Actually, a new golden dollar coin bearing the image of Sacagawea, began circulating last month. It premiered to rave reviews! This new coin features the profile of Sacagawea, the Shoshone woman who served as a guide for the Lewis and Clark expedition in 1804-1806.

KEY CONCEPTS

Benefit, Competition, Money

STUDENTS WILL

  • Describe the golden dollar coin.
  • Compare the golden dollar to the Susan B. Anthony silver dollar.
  • List the advantages that coins have over paper money.
  • Calculate the profit to the US Treasury on golden dollars.

INTRODUCTION

coin

Sacagawea returned to America last month. Actually, a new golden dollar coin bearing the image of Sacagawea, began circulating last month. It premiered to rave reviews! This new coin features the profile of Sacagawea, the Shoshone woman who served as a guide for the Lewis and Clark expedition in 1804-1806.

[Note to teachers: This lesson is easily integrated with social studies, particularly history. If you wish to have your students learn more about Sacagawea, you can send them to "Sacagawea: The Early Years" . At this site, you will find a number of links to high-quality web sites that explore the life and times of Sacagawea]

MATERIALS


PROCESS

 Introducing the Golden Dollar Coin:

See "The Golden Dollar Coin" : Here you will find a number of facts related to the new golden dollar coin. One of the most surprising of these facts is that the coin contains no gold!

  1.  What is the primary chemical element used in the composition of the golden dollar? [The primary chemical element used in the composition of the golden dollar is 88.5% copper.]
     
  2. Does the golden dollar have smooth or rough edges? [The golden dollar has smooth edges.]
     
  3. What other distinguishing features does the golden dollar have? [The golden dollar has an extra wide border and is golden in color.]

Go here to view frequently asked questions.

How does the new golden dollar compare to the previously issued Susan B. Anthony dollar? [The Susan B. Anthony dollar is silver, has a reeded edge, and has a narrow polygonal border.]

The smooth edge of the new golden dollar is similar to the nickel's edge. This is a departure from the practices the U.S. Mint has traditionally used in designing coins. The U.S. Mint, the government agency in charge of manufacturing coins, medals, and coin-based products, typically uses a reeded (or grooved) edge in the design of higher-denomination coins. Try to guess why some coins have grooved edges and others don't.

See "Why do some coins have grooves on the edge? And why are they there?"

coinDid you guess correctly? Some coins have grooved edges because once upon a time, coins contained precious metals. Some people were tempted to shave some of the gold or silver off of the coin in order to recover some of these precious metals. Minting coins with reeded edges made it more difficult for people to do this.

Many years ago, our money consisted of coins that were made of real gold. These coins could be used to pay for goods and services or could be sold for their gold content. Some people tried to shave some of the gold off of their coins while still using the coin to make payment. By doing this, they would collect valuable gold shavings and receive full value for their coins in exchange. The U.S. Mint discouraged this practice by making coins with grooved edges. Since the mineral content of current U.S. coins is worth less than the coins' face value, people no longer shave the edges off of their coins.

Activity: A Blind Touch Test

You can all recognize coins by sight, but can you differentiate coins by touch? Your teacher is going to put a set of coins in a bowl and ask you to identify them. What is the catch? You are going to be blindfolded. One of the criticisms of the Susan B. Anthony dollar is that it feels (and even looks) like a quarter. The U.S. Mint has conducted tests on the feel of the new golden dollar. They claim that it is distinguishable from other coins by feel alone. This will be useful for you if you ever find yourself fumbling around in your pockets for correct change on a dark night!

[Note to teachers: This activity requires that you have a blindfold as well as several different coins. These coins should include pennies, nickels, dimes, quarters, Susan B. Anthony dollars, and new golden dollars. You may also want to use the half-dollar, another dollar piece, or even some foreign coins. The idea is to see if students can distinguish among coins by feel alone. It is important that you have quarters, Susan B. Anthony dollars, and the new golden dollars in the bowl. It will be interesting to see if students can truly identify the Susan B. Anthony dollar by its feel. You can decide how you wish to conduct this activity. You may wish to do it with a couple of student volunteers, or you may wish to take the time needed to do it with the entire class.]

 

  1. How did you do in distinguishing among the different coins?
    [Subjective: Students will need to feel coins and decide based on their own perceptions. Purpose of the activity is to show that the new coin is more distinguishable.]
  2. Which was more easily identified, the new golden dollar coin or the old Susan B. Anthony dollar coin?
    [Subjective: Most students should find that the new coin is easier to identify]
  3. Why?
    [Based on the opinion of the student. They should identify particular features which they noticed.]

 Why Using Coins Makes Sense

Talk with some of your classmates to brainstorm a list of advantages that coins have over paper money. There are many potential consumer benefits to using the golden dollar coin instead of paper money. Coins are more easily inserted into machines. Whether you are buying soda pop, stamps, or a sandwich from a machine, coins are almost always easier to use as payment. This has the added advantage of reducing the amount of time that it takes to complete a transaction. In addition, coins cannot be torn or burned.

The U.S. Mint thinks that using the golden dollar coin will increase business sales revenues. This is because consumers tend to part with coins more readily than bills, they are prone to use coins for impulse spending on vended products. Larger-denomination coins also contribute to selling a greater volume of higher-priced items.

The new coin can also reduce business costs. This is because money-handling costs are expected to be lower. In addition, there will be fewer costs associated with having to repair vending machine bill acceptors.

The U.S. Treasury will receive a huge benefit from the issuance of the new coin. This is because the coin costs the U.S. Mint less to make than its face value. Thus, for every additional golden dollar placed in circulation, the U.S. Treasury "makes money" (note that the U.S. Mint returns its earnings to the Treasury department). How does this work? When a person, a bank, a business, the Federal Reserve, etc. submits an order to the U.S. mint for the new golden dollar, they must pay a full dollar for the dollar they are receiving. Since the U.S. Mint is receiving one dollar for something that costs less than a dollar to produce, this transaction is very profitable.

Read "U.S. Mint Says Public is Embracing New 'Golden Dollar' Coin"

How many golden dollars does the U.S. Mint expect will be placed in circulation by the end of the year? [Over one billion.]

It will cost 12 cents to produce each golden dollar coin.

What is the "profit" on each golden dollar that is circulated? [88 cents: each dollar is "sold" for $1 and costs 12 cents to make.]

Suppose that 1.2 billion new golden dollars will be placed into circulation by the end of 2000. What will the total "profit" be from this operation? [$1.2 billion multiplied by $0.88 = $1.056 billion. This becomes a net revenue for the U.S. Treasury and, everything else equal, contributes to a reduction of, or decreases the rate of growth in, the national debt.]

It costs 3.5 cents to produce a one dollar bill. Since the golden dollar coin costs more than three times to make than a dollar bill, can you think of why the government believes the golden dollar coin is less expensive than the dollar bill to use for low denomination transactions? [Because the average life of the dollar bill is only 18 months. Coins last from 25-30 years. This makes coins much cheaper to use in the long run.]

CONCLUSION

In January 1999, the U.S. Mint introduced its "50 States Quarters" program by circulating new quarters designed to honor the unique history and traditions in each state. The program will honor five states each year, until a new quarter has been introduced for each state by the end of 2008. In the next part of this series on understanding U.S. money, we will explore some of the interesting economic developments that have occurred since the onset the "50 States Quarters" program. Look for the upcoming EconomicsMinute lesson, "How Much is this Quarter Worth?"

EDUCATOR REVIEWS

  • “I think you should add some information about the $1 Sacajawea coin.”

    Rebekah   POSTED ON May 18, 2005

  • “This is a site made to order. I am working with a group of teachers who now have the technology for whole group internet viewing. I think the students will love this example of web working...so will their history teachers! It is clear, focused, fun to go through, with ample opportunity for students to write and speak as they learn interesting coin facts.”

    Mary Altiere, Ft Myers, FL   POSTED ON July 13, 2005

Add a Review