I’ve noticed a rather interesting phenomenon over the past several decades regarding our circulating coinage; it is no longer wearing very much. 1964-dated nickels can still be found easily in change, and those coins are now over 50 years old. Similarly, Washington Quarters from the late 1960s and early 1970s are still around and those are averaging 40 to 50 years old now.
I thought back to my childhood (which was in the early 1960s) and tried to remember what 40-or-50-year-old coins looked like then. They were worn slick! My daily lunch money at my elementary school was 35 cents, and I remember occasionally spending a dateless Standing Liberty Quarter, a dateless Buffalo Nickel or slick Mercury Dime. Many of these coins were only 30 or 40 years old at that time, but they were heavily worn down to grades of Fair, About Good and Good.
And a generation before me certainly well remembers spending some of the many millions of "V" nickels and Barber coins, which survive today in grades of AG to G.
But now, if you look through a can of change you may have, or even your daily pocket change, you’ll encounter numerous coins that are nearly half a century old, but largely remain in grades of VF and XF, if not higher.
So what is this telling us, and why? Well obviously, coins are not nearly as active as they were 50 or so years ago. They are being carried far less, and spent far less frequently. If you’re like most, you probably have a jar where you toss your change every night. It accumulates for several years until you take it back to the bank. Few, if any, people now start the day with change in their pocket.
The reason for this is hardly mysterious either. Our coins don’t purchase very much anymore. According to the CPI Inflation Calculator, prices are up roughly 8X since the early 1960s. That would make the quarter of the early 1960s equivalent to about $2 today – and two bucks is certainly worth putting in your pocket to start the day with. Even the lowly dime was almost worth today’s dollar back then and deserving of a place in your morning pocket. After all, it could have bought you a cup of coffee. Today, if you left that for a tip for coffee at Starbucks, you’d get a very dirty look from the barista.
Despite their lack of utility, the Mint continues to produce billions of new cents, nickels, dimes and quarters every year, and this has been the case for nearly half a century. We certainly have far more than we need – except that they’re all sitting in jars and cans in our kitchen. And they sure don’t wear much sitting in a jar!