Dollar Coins

Main article: Coins of the United States dollar

Official United States coins have been produced every year from 1792 to the present.

• Half-cent 1792 - 1857
• Cent (Penny) 1793–present
• 2-cent 1864–1873
• 3-cent 1851-1889
• Half Dime 1792-1873 (Not to be confused with the Five-cent Nickel below)
• Five-cent Nickel 1866–present
• Dime 1792–present
• 20-cent 1875-1878
• Quarter 1796–present
• Half dollar 1794–present
• Dollar coin 1794–present
• Quarter Eagle ($2.50 gold coin) 1792-1929
• Three-dollar piece 1854-1889
• Half Eagle ($5 gold coin) 1795-1929
• Eagle ($10 gold coin) 1795-1933
• Double Eagle ($20 gold coin) 1850-1933

Collector coins for which everyday transactions are non-existent.^[28]

• American Eagles originally were not available from the Mint for individuals but had to be purchased from authorized dealers. In 2006 The Mint began direct sales to individuals of uncirculated bullion coins with a special finish, and bearing a "W" mintmark.

* American Silver Eagle $1 (1 troy ounce) silver bullion coin 1986-Present

* American Gold Eagle $5 (1/10 troy oz), $10 (1/4 troy oz), $25 (1/2 troy oz), and $50 (1/4 troy oz) Gold bullion coin 1986-Present

* American Platinum Eagle ($10, $25, $50, and $100 platinum coin) 1997–present

• United States commemorative coins - special issue coins

* $50.00 (Half Union) 1915

* Presidential Proofs (see below) 2007-present

Technically, all these coins are still legal tender at face value, though some are far more valuable today for their numismatic value, and for gold and silver coins, their precious metal value. From 1965 to 1970 the Kennedy half dollar was the only circulating coin with any silver content though the Mint still makes what it calls Silver Proof sets for collectors.

In addition, an experimental $4.00 (Stella) coin was also minted, but never placed into circulation and is properly considered to be a pattern rather than an actual coin denomination.

The $50 coin mentioned was only produced in 1915 for the Panama-Pacific International Exposition (1915) celebrating the opening of the Panama Canal. Only 1,128 were made, 645 of which were octagonal; this remains the only U.S. coin that was not round as well as the largest and heaviest U.S. coin ever.

From 1934 to present the only denominations produced for circulation have been the familiar penny, nickel, dime, quarter, half dollar and dollar. The nickel is the only coin still in use today that is essentially unchanged (except in its design) from its original version. Every year since 1866, the nickel has been 75% copper and 25% nickel, except for 4 years during World War II when nickel was needed for the war.

Collector coins

The United States Mint produces Proof Sets specifically for collectors and speculators. Silver Proofs tend to be the standard designs but with the dime, quarter, half dollar, and in some cases the dollar having silver content. Another type of proof set is the Presidential Dollar Proof Set where four special $1 coins are minted each featuring a president.

• 2007 had George Washington, John Adams, Thomas Jefferson, and James Madison
• 2008 had James Monroe, John Quincy Adams, Andrew Jackson, and Martin Van Buren
• 2009 had William Henry Harrison, John Tyler, James K. Polk, and Zachary Taylor
• 2010 had Millard Fillmore, Franklin Pierce, James Buchanan, and Abraham Lincoln
• 2011 is to have Andrew Johnson, Ulysses S. Grant, Rutherford B. Hayes, and James A. Garfield

Dollar coins

Flowing Hair Dollar

The first United States dollar was minted in 1794. Known as the Flowing Hair Dollar, it contained 416 grains of "standard silver" (89.25% silver and 10.75% copper), as specified by Section 13 ^[29] of the Coinage Act of 1792. It was designated by Section 9 of that Act as having "the value of a Spanish milled dollar".

Dollar coins have not been very popular in the United States.^[30] Silver dollars were minted intermittently from 1794 through 1935; a copper-nickel dollar of the same large size, featuring President Dwight D. Eisenhower, was minted from 1971 through 1978. Gold dollars were also minted in the 19th century. The Susan B. Anthony dollar coin was introduced in 1979; these proved to be unpopular because they were often mistaken for quarters, due to their nearly equal size, their milled edge, and their similar color. Minting of these dollars for circulation was suspended in 1980 (collectors' pieces were struck in 1981), but, as with all past U.S. coins, they remain legal tender. As the number of Anthony dollars held by the Federal Reserve and dispensed primarily to make change in postal and transit vending machines had been virtually exhausted, additional Anthony dollars were struck in 1999. In 2000, a new $1 coin, featuring Sacagawea, (the Sacagawea dollar) was introduced, which corrected some of the mistakes of the Anthony dollar by having a smooth edge and a gold color, without requiring changes to vending machines that accept the Anthony dollar. However, this new coin has failed to achieve the popularity of the still-existing $1 bill and is rarely used in daily transactions. The failure to simultaneously withdraw the dollar bill and weak publicity efforts have been cited by coin proponents as primary reasons for the failure of the dollar coin to gain popular support. There are indications that the dollar coin's failure was also due to the reluctance of armored transport companies to make the necessary adjustments to handle the new coins, and the government's reluctance to mandate it.^[31] The result of the armored carriers' unwillingness to handle the new coins was that they virtually never reached merchants in quantities sufficient to be given out as change on a routine basis, or for retail clerks to become used to handling them.

In February 2007, the U.S. Mint, under the Presidential $1 Coin Act of 2005,^[32] introduced a new $1 U.S. Presidential dollar coin. Based on the success of the "50 State Quarters" series, the new coin features a sequence of presidents in order of their inaugurations, starting with George Washington, on the obverse side. The reverse side features the Statue of Liberty. To allow for larger, more detailed portraits, the traditional inscriptions of "E Pluribus Unum," "In God We Trust," the year of minting or issuance, and the mint mark will be inscribed on the edge of the coin instead of the face. This feature, similar to the edge inscriptions seen on the British £1 coin, is not usually associated with U.S. coin designs. The inscription "Liberty" has been eliminated, with the Statue of Liberty serving as a sufficient replacement. In addition, due to the nature of U.S. coins, this will be the first time there will be circulating U.S. coins of different denominations with the same President featured on the obverse (heads) side. (Lincoln/penny, Jefferson/nickel, Franklin D. Roosevelt/dime, Washington/quarter and Kennedy/half dollar.) Another unusual fact about the new $1 coin is Grover Cleveland will have two coins with his portrait issued due to the fact he was the only U.S. President to be elected to two non-consecutive terms.^[33]

Early releases of the Washington coin included error coins shipped primarily from the Philadelphia mint to Florida and Tennessee banks. Highly sought after by collectors, and trading for as much as $850 each within a week of discovery, the error coins were identified by the absence of the edge impressions "E PLURIBUS UNUM IN GOD WE TRUST 2007 P". The mint of origin is generally accepted to be mostly Philadelphia, although identifying the source mint is impossible without opening a mint pack also containing marked units. Edge lettering is minted in both orientations with respect to "heads", some amateur collectors were initially duped into buying "upside down lettering error" coins.^[34] Some cynics also erroneously point out that the Federal Reserve makes more profit from dollar bills than dollar coins because they wear out in a few years, whereas coins are more permanent. The fallacy of this argument arises because new notes printed to replace worn out notes which have been withdrawn from circulation bring in no net revenue to the government to offset the costs of printing new notes and destroying the old ones. As most vending machines are incapable of making change in banknotes, they commonly accept only $1 bills, though a few will give change in dollar coins.

Mint marks

Most U.S. coins bear a mint mark as part of the design, usually found on the front of the coin near the date although in the past it was more commonly found on the reverse. The Philadelphia Mint issues coins bearing a letter P (or no mark at all), while the Denver Mint uses a letter D. The San Francisco Mint uses an S, though no coins have been released from that mint for general circulation since 1980. It does, however, continue to strike proof coins for collectors. The West Point Mint uses a W, though this is rarely seen as the West Point mint generally only makes high denomination coins (with face values over $1.00) which are not meant for everyday use. A CC mark, for the Carson City Mint, was used from 1870 to 1893, but the mint at that location was only a temporary establishment. The New Orleans Mint used a mint mark O. It operated from 1838 until Louisiana seceded from the Union in 1861, and again from 1879 to 1909. The letter D was also used for coinage of the Dahlonega Mint from 1837 to 1861, and C was used for the Charlotte Mint during the same timespan. The latter two mints struck gold coins only.

Banknotes

Main article: Federal Reserve Note

The U.S. Constitution provides that Congress shall have the power to "borrow money on the credit of the United States".^[35] Congress has exercised that power by authorizing Federal Reserve Banks to issue Federal Reserve Notes. Those notes are "obligations of the United States" and "shall be redeemed in lawful money on demand at the Treasury Department of the United States, in the city of Washington, District of Columbia, or at any Federal Reserve bank."^[36] Federal Reserve Notes are designated by law as "legal tender" for the payment of debts.^[37] Congress has also authorized the issuance of more than 10 other types of banknotes, including the United States Note^[38] and the Federal Reserve Bank Note. The Federal Reserve Note is the only type that remains in circulation since the 1970s.

Currently printed denominations are $1, $2, $5, $10, $20, $50, and $100. Notes above the $100 denomination ceased being printed in 1946 and were officially withdrawn from circulation in 1969. These notes were used primarily in inter-bank transactions or by organized crime; it was the latter usage that prompted President Richard Nixon to issue an executive order in 1969 halting their use. With the advent of electronic banking, they became less necessary.^{[citation needed]} Notes in denominations of $500, $1,000, $5,000, $10,000, and $100,000 were all produced at one time; see large denomination bills in U.S. currency for details. These notes are now collector's items and are worth more than their face value to collectors.^{[citation needed]}

Though still predominantly green, post-2004 series incorporate other colors to better distinguish different denominations. As a result of a 2008 decision in an accessibility lawsuit filed by the American Council of the Blind, the Bureau of Engraving and Printing is planning to implement a raised tactile feature in the next redesign of each note, except the $1 and the version of the $100 bill already in process. It also plans larger, higher-contrast numerals, more color differences, and distribution of currency readers to assist the visually impaired during the transition period.^[39]

Means of issue

Currently, the US government maintains over 800 billion US dollars in cash money (primarily Federal Reserve Notes) in circulation.^[40][41] The amount of cash in circulation is increased (or decreased) by the actions of the Federal Reserve System. Eight times a year, the 12-person Federal Open Market Committee meet to determine US monetary policy.^[42] Every business day, the Federal Reserve System engages in Open market operations to carry out that monetary policy.^[43] If the Federal Reserve desires to increase the money supply, it will buy securities (such as US Treasury Bonds) anonymously^{[citation needed]} from banks in exchange for dollars. Conversely, it will sell securities to the banks in exchange for dollars, to take dollars out of circulation.^[44]

When the Federal Reserve makes a purchase, it credits the seller's reserve account (with the Federal Reserve). This money is not transferred from any existing funds – at this point that the Federal Reserve has created new high-powered money. Commercial banks can freely withdraw in cash any excess reserves from their reserve account at the Federal Reserve. To fulfill those requests, the Federal Reserve places an order for printed money from the US Treasury Department.^[45] The Treasury Department in turn sends these requests to the Bureau of Engraving and Printing (to print new dollar bills) and the Bureau of the Mint (to stamp the coins).

Usually, the short term goal of open market operations is to achieve a specific short term interest rate target. In other instances, monetary policy might instead entail the targeting of a specific exchange rate relative to some foreign currency or else relative to gold. For example, in the case of the USA the Federal Reserve targets the federal funds rate, the rate at which member banks lend to one another overnight. The other primary means of conducting monetary policy include: (i) Discount window lending (as lender of last resort); (ii) Fractional deposit lending (changes in the reserve requirement); (iii) Moral suasion (cajoling certain market players to achieve specified outcomes); (iv) "Open mouth operations" (talking monetary policy with the market).