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Report to Congressional Committees: December 2002: U.S. Coins: Public Views on Changing Coin Design: GAO-03-206: Highlights of GAO-03-206, a report to the Senate Subcommittee on Treasury and General Government and the House Subcommittee on Treasury, Postal Service, and General Government, Senate and House Committees on Appropriations. Why GAO Did This Study: The designs on three of the most common U.S. coins, the penny, nickel, and dime, have remained largely unchanged for over 50 years. The 50 State Quarters Program, involving a set of recurring designs commemorating each state, has been credited with generating renewed interest in the quarter by collectors and the public. A recent redesign of the new dollar coin has also increased the public’s interest in collecting the coin, but it is not widely circulating. Concerned about the level of public interest in coins and the circulation of the dollar coin, Congress mandated a GAO review of U.S. coin design, with particular attention to increasing circulation of the dollar coin. GAO contracted with the Gallup Organization to survey a representative sample of U.S. adults to obtain public views on various coin design questions, including public preference for coin denominations, coin design features, the frequency of change in coin design, and ways to increase acceptance and use of the new dollar coin. This report also includes a summary of findings from focus groups held in four U.S. cities. What GAO Found: Overall, the public is satisfied with coin denominations used, coin design features, and the frequency of changes in coin designs. Although most people are not using the new dollar coin, a program with a rotating series of images could significantly increase new dollar coin collection, but only 26 percent said it would increase new dollar coin use. The Gallup Survey indicated the following: • Most adults in the continental United States were satisfied with current coin denominations. Over half of the respondents were opposed to the use of rounding values in cash transactions to the closest 5-cent interval to eliminate the need for the penny. Most respondents were opposed to the production of a 2-dollar coin. • Most adults were satisfied with current coin designs. Most respondents said there is the right amount of wording on coins. Survey respondents were split on whether the actual number of cents should be shown on coins, such as including the numeral 25 on the quarter. • Most adults were satisfied with how frequently coin designs are changed. Most respondents said the government should wait at least 10 years before changing the design on a coin, but there were some differences among age groups. Younger respondents were in favor of more frequent coin design changes, while older respondents favored less frequent changes. The survey also indicated that most people are interested in the 50 State Quarters Program. • Most adults are not using the new dollar coin because of familiarity with the dollar bill, the coin not being widely available, and not wanting to carry around more coins. Most respondents said they were opposed to the elimination of the dollar bill to promote the coin’s use, but when annual government savings of half a billion dollars were mentioned, most people then favored elimination of the dollar bill. Responses to Survey Questions on Whether the Mint Should Continue Producing Certain Coins [See PDF for image] [End of figure] [End of section] Letter: Results in Brief: Background: Most People Are Satisfied with Current Denominations of Coins: Most People Are Satisfied with the Current Design of Coins: Most Respondents Are Satisfied with the Frequency of Change in Coin Designs: Most People Are Using the Dollar Bill and Not the New Dollar Coin and Changing the Dollar Coin’s Design Is Unlikely to Substantially Increase Use: Agency Comments and Our Evaluation: Appendixes: Appendix I: Objectives, Scope, and Methodology: Public Opinion Survey: Focus Group Discussions: Appendix II: Questionnaire for GAO Survey on U.S. Coin Design and Overall Responses: Appendix III: Comments from the United States Mint: Tables: Table 1: Disposition of Sampling Units Figures: Figure 1: Percentage of Total Coin Production for Each Circulating Coin Produced, FYs 1992 to 2001 Figure 2: Number of Years Since Last Coin Redesign for Front of Each Circulating Coin Denomination Figure 3: Responses to Survey Questions on Whether the Mint Should Continue Producing Certain Coins Figure 4: Responses to Survey Questions on Whether the Mint Should Stop Producing Certain Coins Figure 5: Responses to Survey Question on What Respondents Do with Pennies When They Receive Them as Change Figure 6: Responses to Survey Question on Whether Respondents Favor or Oppose Rounding Figure 7: Responses to Survey Question on How Frequently Respondents Think Coin Designs Should Be Changed Figure 8: Responses to Survey Question on How Long the Government Should Wait Before Changing Coin Designs Figure 9: Responses to Survey Question on How Often Respondents Look to See If They Receive New Quarters Figure 10: Results of Survey Question regarding Why Adults Are Not Using the New Dollar Coin (Those Who Had Heard of the New Dollar Coin) Figure 11: Results of Survey Question regarding Whether Adults Favor or Oppose Eliminating the Dollar Bill Figure 12: Results of Survey Question regarding Whether Adults Favor or Oppose Replacing the Dollar Bill with the Dollar Coin If It Saved the Government $500 Million Dollars Each Year Figure 13: Results of Survey Question regarding Whether Features of the New Dollar Coin Are Okay As Is or Should Be Changed (Those Who Had Possessed the Coin) Figure 14: Results of Survey Question regarding Whether Adults Would Be More Likely or Less Likely to Use the New Dollar Coin for Purchases If It Had a Series of Images Over Time Figure 15: Results of Survey Question regarding Whether Adults Would Be More Likely or Less Likely to Collect the New Dollar Coin If It Had a Series of Images Over Time Figure 16: Results of Survey Question regarding the Extent That Adults Favor or Oppose the Following Design Themes for the New Dollar Coin If It Had a Series of Images Over Time Figure 17: Results of Survey Question regarding the Extent That Adults Favor or Oppose the Following Design Themes for the New Dollar Coin If It Had a Series of Images Over Time Letter December 17, 2002: The Honorable Byron L. Dorgan Chairman The Honorable Ben Nighthorse Campbell Ranking Minority Member Subcommittee on Treasury and General Government Committee on Appropriations United States Senate: The Honorable Ernest J. Istook, Jr. Chairman The Honorable Steny H. Hoyer Ranking Minority Member Subcommittee on Treasury, Postal Service, and General Government Committee on Appropriations House of Representatives: Circulating coins serve as a medium of exchange and also symbolize our nation’s heritage. In addition, the public’s collection of circulating coins generates additional funding for the Treasury. Recent coin redesigns, which began in 1999 with the 50 State Quarters Program, and a new dollar coin issued in 2000, have brought attention to these circulating coins and increased coin collection by the public.[Footnote 1] The designs for the front of three of our most common circulating coins, the penny, nickel, and dime, have remained largely unchanged for over 50 years. This report responds to a congressional mandate that we conduct a study to identify any changes necessary to maximize public interest in and acceptance of U.S. coins and achieve a better balance in the numbers of coins of different denominations in circulation, with particular attention to increasing the circulation of the dollar coin.[Footnote 2] As agreed with your offices, our objective was to obtain public opinion regarding (1) the denominations of coins used; (2) the design of coins, including who or what is depicted and the color, size, weight, wording, and numerals on coins; (3) the frequency of change in coins design; and (4) ways to increase acceptance and use of the new dollar coin. We contracted with The Gallup Organization, a national public opinion research firm, to conduct a poll and to use focus groups to obtain public opinion on these issues. Gallup conducted a telephone survey of 1,003 adults in July and August 2002 and held eight focus groups in four cities in July 2002. Appendix I provides further details about our objective, scope, and methodology. Overall results for each survey question are provided in appendix II. In addition to reporting overall results, we report the results for some of our survey data by demographic subgroups. Data are reported at the demographic subgroup level if subgroup differences are relevant, if differences in subgroup responses are statistically significant, and if there was at least a 10 percentage point difference between these subgroup responses. Focus group views are summarized to supplement the overall results of the survey; however, focus group views are not statistically representative of the U.S. adult population. We requested comments on a draft of this report from the Secretary of the Treasury and the Director of the Mint. The comments we received are discussed near the end of this letter and reproduced in appendix III. We did our work in Washington, D.C.; Towson, Maryland; Atlanta, Georgia; Seattle, Washington; and Detroit, Michigan between January 2002 and December 2002 in accordance with generally accepted government auditing standards. Results in Brief: The Gallup Survey indicated that most adults in the continental United States were satisfied with current coin denominations. At least 97 percent of survey respondents thought the government should continue to produce the dime, nickel, and quarter. At least 61 percent thought the government should continue to produce the penny, 50-cent piece, and new dollar coin. Over half of the respondents were opposed to the use of rounding values to the closest 5 or 10 cents in cash transactions to eliminate the need for the penny. In addition, most respondents were opposed to the production of a 2-dollar coin. The survey indicated that most respondents were also satisfied with current coin designs. Survey respondents were asked if the design features of coins should be changed, such as who or what is depicted and the color, size, and weight. At least 92 percent of survey respondents were satisfied with the design features of the penny, nickel, dime, and quarter. Although the majority of respondents were also satisfied with the design features of the 50-cent piece and the new dollar coin, fewer respondents were satisfied with these coins than with the penny, nickel, dime, and quarter. Ninety-three percent of respondents said there is the right amount of wording on coins. Survey respondents were split on whether the actual number of cents should be shown on coins. The survey indicated that most adults in the continental United States were satisfied with how frequently coin designs are changed. Sixty- eight percent of respondents said that designs should be changed about as frequently as they currently are. Respondents who said they were interested in the 50 State Quarters Program also said they do not avoid receiving the older quarters. The survey indicated that most respondents are not using the new dollar coin; however, a program with a rotating series of images could increase dollar coin use somewhat and collection significantly. When respondents were asked why they are not using the new dollar coin, 93 percent cited familiarity with the dollar bill as a reason. Sixty-four percent of respondents are opposed to the elimination of the dollar bill, but the number opposed decreased to 37 percent when potential government savings were mentioned. Over 80 percent of survey respondents were satisfied with aspects of the new dollar coin’s design, although some said the coin’s size should be changed. Twenty- six percent of respondents said that they would be more likely to use the dollar coin if the design were changed with a series of different images over a period of time, similar to the 50 State Quarters Program; and 49 percent of respondents said they would be more likely to collect the dollar coin with such a program. If the new dollar coin were issued with a series of images, the survey respondent’s most popular design theme choices were symbols of America, historical events, American heroes, and U.S. presidents. Overall results for each survey question are provided in appendix II. In commenting on a draft of this report, the Director of the Mint said she appreciated our comprehensive assessment and that many people believe that periodic coin redesign would encourage coin collecting and help emphasize our national character, pride, history, and heritage. Background: The United States has six coins for general circulation: the penny, nickel, dime, quarter, 50-cent piece, and dollar coin. Other coin denominations that were issued in the past and then discontinued include a half-cent, 2-and 3-cent pieces, a half-dime, a 20-cent piece, and various dollar denominations of gold coins. The United States Mint, a bureau of the Department of the Treasury, manufactures all coins used in commerce. These coins are generally distributed by the Federal Reserve to banks and armored carriers. Circulating coin production levels for various denominations are driven by demand and the amount of reuse of previously issued coins. The Mint and the Federal Reserve monitor several factors, such as economic growth, coin collection activity, and Federal Reserve coin inventories, to determine the number of coins to produce and ship to the Federal Reserve. Of all U.S. circulating coins, the penny is produced in the highest volume. In fiscal year 2001, the Mint produced 12.8 billion pennies, 1.7 billion nickels, 3.1 billion dimes, 5.5 billion quarters, 27 million 50-cent pieces, and 102 million dollar coins. From fiscal years 1992 to 2001, pennies represented about 64 percent of all circulating coins produced in the United States. In general, there has been relatively low demand for and production of the dollar coin and the 50- cent piece. Mint production of these coins represented less than 1 percent of total circulating coin production from fiscal years 1992 to 2001. (See fig. 1 for the relative production levels of denominations during this period.): Figure 1: Percentage of Total Coin Production for Each Circulating Coin Produced, FYs 1992 to 2001: [See PDF for image] [End of figure] The law authorizes the circulating coins that are to be produced by the Mint, the wording or inscriptions that are to appear on them, and their physical characteristics, such as size and weight.[Footnote 3] The Secretary of the Treasury is authorized to change the design of a coin, but the law restricts design changes to no more than once every 25 years. The age of the designs on the fronts and backs of U.S. circulating coins varies by denomination. Some designs, such as the fronts of the penny, nickel, and dime, have not changed for over 50 years. In contrast, the dollar coin was issued with a new design in 2000, and the quarter began to have a series of images commemorating the 50 states in 1999 that continues to 2008. Figure 2 shows the number of years since the last redesign of the images on the front of coins currently in circulation. Figure 2: Number of Years Since Last Coin Redesign for Front of Each Circulating Coin Denomination: [See PDF for image] [End of figure] Note: Bicentennial quarters, 50-cent pieces, and Eisenhower dollar coins celebrating the 200th anniversary of the Declaration of Independence were issued in 1975 and 1976. The fronts of these coins were dated 1776-1976. The back of these coins had a temporary Bicentennial image: on the quarter, a Colonial Drummer; on the 50-cent piece, Independence Hall; and on the Eisenhower Dollar, an image of the Liberty Bell and the Moon. [A] Under current law, the front of each 50 State Quarter issued from 1999 to 2008 under the 50 State Quarters Program retains the image of Washington. However, to make room for images commemorating the states on the back of each coin, the inscription “United States of America” and the designation of value “Quarter Dollar” were moved to the front of the coin. In addition, the year that the coin is minted was moved from the front to the back. The first change since 1932 in the quarter’s design was authorized by the 50 States Commemorative Coin Program Act. The act provides for circulating quarters honoring each of the 50 states and authorizes the Mint to issue five new quarters each year. For quarters produced under the program from 1999 to 2008, the front of the quarter will retain the image of George Washington, and the back will have a design emblematic of the state it commemorates. Officials, citizens, and artists in each state develop designs commemorating each state that are to appear on the back of the coin.[Footnote 4] Final selection of each state design is made by the Secretary of the Treasury, after consultation with state officials and the Commission of Fine Arts, with review by the Citizen’s Commemorative Coin Advisory Committee (CCCAC).[Footnote 5] CCCAC endorsed the 50 State Quarters Program and has recommended that Congress authorize other circulating commemorative coins. CCCAC has also noted that some coin designs have remained unchanged for many years and recommended that new designs for U.S. circulating coins be considered. According to a June 2002 public opinion poll, about half of adult Americans were collecting the 50 State Quarters.[Footnote 6] Each quarter produced generates $0.21 in profits, or seigniorage, for the Mint.[Footnote 7] A redesign of the dollar coin was authorized by the United States $1 Coin Act of 1997 to replace the Susan B. Anthony dollar coin. The $1 Coin Act required the coin to have a golden color and a distinctive edge and authorized the Secretary of the Treasury, in consultation with Congress, to select the design of the new coin. In May 1998, the Secretary established a Dollar Coin Advisory Committee to consider alternatives and recommend a design concept for the front of the new dollar coin. The final design selected was an artist’s rendition of Sacagawea, a Shoshone interpreter who assisted the Lewis and Clark expedition of 1804-06 to the Pacific Ocean. The new dollar coin was first issued to the public in January 2000. Public opinion polls show that many people are collecting the new dollar coin; however, the coin has not been a popular circulating coin.[Footnote 8] Most People Are Satisfied with Current Denominations of Coins: The Gallup Survey indicated that most adults in the continental United States are satisfied with current coin denominations. When asked if the Mint should continue or stop producing nickels, dimes, or quarters, at least 97 percent of the respondents to the Gallup Survey said they should continue each of these coins. Less than 3 percent of respondents said that the Mint should stop producing nickels, dimes, or quarters. Fewer respondents, but still a majority, thought the Mint should continue to produce the penny, the 50-cent piece, and the dollar coin. Sixty-four percent of respondents said the Mint should continue to produce the penny, 61 percent said the Mint should continue to produce the 50-cent piece, and 68 percent said the Mint should continue to produce a dollar coin. Thirty-three percent of respondents said that the Mint should stop producing the penny, 36 percent said the Mint should stop producing the 50-cent piece, and 28 percent said the Mint should stop producing a dollar coin. (See figs. 3 and 4.): Figure 3: Responses to Survey Questions on Whether the Mint Should Continue Producing Certain Coins: [See PDF for image] [End of figure] Figure 4: Responses to Survey Questions on Whether the Mint Should Stop Producing Certain Coins: [See PDF for image] [End of figure] Some opinions on coin denominations varied according to survey respondents’ ages. Younger respondents (ages 18 to 34) were more supportive of the production of a dollar coin than older respondents (ages 65 and above). Seventy-eight percent of respondents ages 18 to 34 said the Mint should continue to produce a dollar coin, and 49 percent of respondents ages 65 and above were in favor of the production of a dollar coin. Twenty percent of respondents ages 18 to 34 said the Mint should stop producing a dollar coin, and 46 percent of respondents ages 65 and above said the Mint should stop producing a dollar coin. Survey respondents ages 55 to 64 were more in favor of the elimination of the penny than respondents ages 65 and above. Forty-three percent of respondents ages 55 to 64 said the Mint should stop producing the penny. In contrast, 18 percent of respondents ages 65 and above said the Mint should stop producing the penny. Over half of all survey respondents were somewhat or strongly opposed to the production of a 2-dollar coin. However, older respondents were more opposed to a 2-dollar coin than younger respondents were. Forty- four percent of respondents ages 18 to 34 were somewhat or strongly opposed to the production of a 2-dollar coin, and 71 percent of respondents ages 65 and above were somewhat or strongly opposed to a 2- dollar coin. People Are Reluctant to Eliminate the Penny and Use Rounding for Cash Transactions: Sixty-four percent of survey respondents said the Mint should continue to produce the penny. Some focus group participants said that the penny is useful for paying in exact change and that the penny is an important part of U.S. currency and the U.S. economy. However, other focus group participants thought the penny should no longer be in circulation. They argued that the penny has no value, citing that nothing can be bought for 1 cent, and that retailers and customers often give pennies away at spare penny cups at cash registers. The survey results indicated that when people receive pennies, they generally do not use them for purchases. Twenty-seven percent of survey respondents spend pennies when they receive them as change. However, 58 percent of survey respondents said that when they receive pennies as change, they accumulate or save them in a piggy bank, jar, drawer, or the like. (See fig. 5.): Figure 5: Responses to Survey Question on What Respondents Do with Pennies When They Receive Them as Change: [See PDF for image] [End of figure] More older than younger respondents said they are likely to spend the pennies they receive as change. Fourteen percent of survey respondents ages 18 to 34 said that they spend the pennies they receive as change. Forty-three percent of respondents ages 65 and above said they spend the pennies they receive as change. Focus group participants discussed varied uses for the penny. Some participants said they save pennies in jars. Others said they carry pennies to help create exact change for purchases or they put them in spare penny cups at cash registers. Some participants said they give pennies to children and a few said they throw pennies away. The survey indicated that over half of adults in the United States somewhat or strongly oppose rounding to the closest 5 or 10 cents to eliminate the need for the penny. Fifty-six percent of survey respondents somewhat or strongly opposed a proposal to round total purchase prices of cash transactions up or down to the nearest 5 or 10 cents. (See fig. 6.): Figure 6: Responses to Survey Question on Whether Respondents Favor or Oppose Rounding: [See PDF for image] [End of figure] Note: Percentages do not add up to 100 because “Neither favor nor oppose,” “Don’t know,” and “Refused” responses are not included. When asked about rounding if the government’s cost of producing and distributing the penny was more than 1 cent, respondents were more even in their answers. Forty-two percent of survey respondents somewhat or strongly opposed rounding transactions if it cost the federal government more than 1 cent to produce and distribute each penny, and 49 percent somewhat or strongly favored rounding. Respondents with a college degree or more education were more supportive than respondents with a high school degree or less of rounding if the government’s cost of producing and distributing the penny was more than 1 cent. Thirty-eight percent of respondents with a high school degree or less and 60 percent of respondents with a college degree or more were somewhat or strongly in favor of rounding. In addition, respondents’ views on rounding after hearing about possible costs to the government varied according to household income. Forty- three percent of respondents with a household income of less than $30,000 were somewhat or strongly in favor of rounding; 66 percent of respondents with a household income of $75,000 or more were somewhat or strongly in favor of rounding. Some focus group participants were also reluctant to support rounding. Participants were skeptical of the fairness of rounding and worried that retailers would find ways to change their pricing scheme so that transactions would be rounded up more often than rounded down. They understood that it would depend on the total purchase price, including taxes, but they still felt that retailers would find a way to make the system work in their favor. Some participants were opposed to rounding because they felt it would create an increased burden for retail clerks, who would be responsible for rounding correctly. However, other participants were in favor of rounding. These proponents felt that rounding would make transactions easier, make pockets lighter, and lead to greater usage of the dollar coin (by eliminating one coin in favor of another). Most People Are Satisfied with the Current Design of Coins: The survey indicated that most adults in the continental United States are satisfied with current coin designs. Respondents were asked if they thought any aspect of the design, such as who or what is depicted, color, size, and weight of the penny, nickel, dime, and quarter should be changed. At least 92 percent of survey respondents thought that the designs did not need to be changed. Focus group participants were also satisfied with current coin designs. They said they were so accustomed to pennies, nickels, dimes, and quarters that they had no desire to see the features changed. Fewer survey respondents were satisfied with the size of the 50-cent piece and the new dollar coin than with other coins but, nevertheless, the majority of people were still satisfied with the sizes. Seventy- four percent of the respondents said that they were satisfied with the size of the 50-cent piece, and 67 percent of those respondents who had seen the new dollar coin were satisfied with its size. In addition, 72 percent of respondents said they were satisfied with the weight of the 50-cent piece. Nearly all focus group participants agreed that the new dollar coin should be larger in size to make it easier to differentiate from the quarter, in spite of its golden color. Most survey respondents said they were satisfied with the amount of wording on U.S. coins. Ninety-three percent said there is “just about the right amount of wording.”: Survey respondents differed on whether the actual number of cents should be shown on coins. Forty-six percent of respondents somewhat or strongly agreed that a numeral indicating how many cents coins are worth should be shown on coins, while 35 percent of respondents somewhat or strongly disagreed that the actual number of the cents should be shown. In contrast, some focus group participants said that it is not necessary to have a numeral on coins indicating their value. Some said “we all grew up with it and know what they are.” However, there were other participants who supported having a numeral on coins. They mentioned that other countries have numerals on their coins, and that numerals on coins would be helpful for foreigners who are unfamiliar with U.S. currency. Most Respondents Are Satisfied with the Frequency of Change in Coin Designs: The survey indicated that most adults in the continental United States were satisfied with how frequently coin designs are changed. Sixty- eight percent of respondents said that the design of U.S. coins should be changed as frequently as they currently are. (See fig. 7.): Figure 7: Responses to Survey Question on How Frequently Respondents Think Coin Designs Should Be Changed: [See PDF for image] [End of figure] About two-thirds of respondents said the government should wait at least 10 years before changing the design on a coin. (See fig. 8.): Figure 8: Responses to Survey Question on How Long the Government Should Wait Before Changing Coin Designs: [See PDF for image] [End of figure] Note: Percentages do not add up to 100 because “Don’t know” and “Refused” responses are not included. Survey respondents’ opinions on the frequency of design changes varied by age. Younger survey respondents were in favor of more frequent design changes, while older respondents favored less frequent changes. Thirty-one percent of survey respondents ages 18 to 34 and 9 percent of respondents ages 65 and above said the Mint should change the design of coins every 5 to 9 years. In addition, 24 percent of respondents ages 18 to 34 and 54 percent of respondents ages 65 and above said that coin designs should be changed every 25 years or more. The survey indicated that many people are interested in the 50 State Quarters Program. Sixty-one percent of respondents said that when they receive quarters as change, they frequently look on the back of the quarters to see if they received one of the new 50 State Quarters. (See fig. 9.): Figure 9: Responses to Survey Question on How Often Respondents Look to See If They Receive New Quarters: [See PDF for image] [End of figure] Focus group participants also expressed support of the 50 State Quarters Program. Participants said they were very satisfied with the program and thought it encouraged collection and interest in coins. Despite the popularity of the quarter program, 82 percent of the survey respondents said they do not try to avoid receiving quarters that were produced before the 50 State Quarters Program was introduced. Most People Are Using the Dollar Bill and Not the New Dollar Coin and Changing the Dollar Coin’s Design Is Unlikely to Substantially Increase Use: The survey indicated that most people have heard of the new dollar coin, but few people are using it. About 70 percent of respondents had heard of the new dollar coin. However, only about 5 percent of respondents said they had received it as change from a cashier or used it to pay for something at a cash register in the past month. Less than 2 percent of respondents have used the coin for other purchases such as in vending machines, stamp machines, tollbooths, or mass transit in the last month. Focus group participants said that, rather than use the coin for everyday transactions, they were more likely to save the new dollar coin or give it as a gift. However, some participants pointed to the advantages of the coin, such as its convenience for use in tollbooths, vending machines, and other coin-operated purchases. Though respondents had a number of reasons for not using the new dollar coin, familiarity with the dollar bill was the most common. Of those who had heard of the new dollar coin, 93 percent of these respondents agreed that people are not using the new dollar coin because they are used to using the dollar bill. In addition, 81 percent of those who had heard of the new dollar coin said the coin not being widely available and 80 percent said not wanting to carry around more coins are reasons why the public does not use the coin. (See figure 10 for results from various categories.): Figure 10: Results of Survey Question regarding Why Adults Are Not Using the New Dollar Coin (Those Who Had Heard of the New Dollar Coin): [See PDF for image] [End of figure] Focus group participants cited many of the same reasons for why they do not use the new dollar coin. Participants said that they prefer the dollar bill because it is easier to use when paying for transactions. Other participants said replacing their dollar bills with dollar coins would mean more weight to carry and that the new dollar coin is too similar to the quarter and Susan B. Anthony dollar coin. Some participants preferred the dollar coin over the dollar bill in vending and other coin-operated machines. Focus group participants were also asked to come up with ways to increase public interest in the new dollar coin. The focus groups responded that the government should increase the circulation of the new dollar coin, stop circulating the Susan B. Anthony dollar coin and eliminate the dollar bill. Many People Are Opposed to Eliminating the Dollar Bill, but Change Opinion When They Hear about the Potential Government Savings: The survey results indicated that about half of adults would only use the new dollar coin if the dollar bill were eliminated; however, most adults oppose a decision by the government to replace the dollar bill with the dollar coin. When asked if they favored or opposed a decision to stop making the dollar bill and replace it with the dollar coin, 64 percent of survey respondents said they were opposed. (See fig. 11 for results from various categories.): Figure 11: Results of Survey Question regarding Whether Adults Favor or Oppose Eliminating the Dollar Bill: [See PDF for image] [End of figure] The percentage of survey respondents who opposed replacing the dollar bill with a dollar coin decreased when government savings are mentioned. When told that it would save about half a billion dollars a year if the U.S. government replaced the dollar bill with the dollar coin, the number who said they were opposed dropped from 64 percent to 37 percent and those who said they were in favor of such a proposal increased from 17 percent to 55 percent. (See fig. 12 for results from various categories.): Figure 12: Results of Survey Question regarding Whether Adults Favor or Oppose Replacing the Dollar Bill with the Dollar Coin If It Saved the Government $500 Million Dollars Each Year: [See PDF for image] [End of figure] Focus group reactions were mixed when participants heard about potential government savings. Some said the savings justified replacing the dollar bill with the dollar coin. However, other participants questioned if the savings would be put to good use by the government. Most People Are Satisfied with the Current New Dollar Coin Design, but a Rotating Image Program Could Increase New Dollar Coin Use Somewhat and Collection Significantly: The survey results indicated that most adults who had the new dollar coin in their possession were satisfied with its design features. Over 80 percent of survey respondents who had possessed the coin were satisfied with aspects of the new dollar coin’s design, such as the image on the front and back of the coin and its color, thickness, and weight. However, 32 percent of respondents who had the coin in their possession said that the size of the new dollar coin should be changed. (See fig. 13 for results from various categories.): Figure 13: Results of Survey Question regarding Whether Features of the New Dollar Coin Are Okay As Is or Should Be Changed (Those Who Had Possessed the Coin): [See PDF for image] [End of figure] When asked what could be done differently to get people to use the new dollar coin, 37 percent of the survey responses fell into a category of “make the coin more available.”[Footnote 9] In addition, about 13 percent of the responses could be grouped under changes to the physical characteristics of the dollar coin such as changes to “make the dollar coin easier to distinguish,” “make it larger” or “make it smaller,” or “make it lighter in weight.” When grouped into categories, some of the open-ended responses seemed to conflict with each other. For example, 4 percent of responses on changes that might increase the dollar coin’s use could be grouped under “make it larger;” however, almost 3 percent of responses could be grouped under “make it lighter in weight.” Less than 5 percent of responses to other potential changes to increase the dollar coin’s use were grouped under “make vending machines accept them,” “give the coin away,” and increase the coin’s “awareness and advertising or education.”: Focus group participants’ opinions varied on the design of the new dollar coin. Participants’ opinions included suggestions that the coin should be larger because the coin is too similar to the quarter and that the coin should be thicker and heavier so that it would not be confused with the quarter. Other suggestions for design included comments that the golden color of the coin is liked, but when the dollar coin tarnishes it loses its luster making it less attractive. Some focus group participants also commented that they liked the image of Sacagawea on the coin, but others questioned why she was chosen for the front of the new dollar coin since many people do not know who she was. When all survey respondents were asked if they would be more likely to use the new dollar coin for purchases if the coin was issued with a series of images over a period of time, most respondents said such a program would not make a difference. A total of 51 percent of the respondents said it would make no difference in their use of the coin, 26 percent said they would be more likely to use the coin, and 22 percent said they would be less likely to use the coin with a series of images program. (See fig. 14 for results from various categories.): Figure 14: Results of Survey Question regarding Whether Adults Would Be More Likely or Less Likely to Use the New Dollar Coin for Purchases If It Had a Series of Images Over Time: [See PDF for image] [End of figure] Almost half of the respondents said that they would be more likely to collect the new dollar coin if it were issued with a series of different images similar to the 50 State Quarters Program. Forty-nine percent of all survey respondents said they would be more likely to collect the new dollar coin under such a program, 40 percent said it would make no difference, and 10 percent said they would be less likely to collect the new dollar coin. (See fig. 15 for results from various categories.): Figure 15: Results of Survey Question regarding Whether Adults Would Be More Likely or Less Likely to Collect the New Dollar Coin If It Had a Series of Images Over Time: [See PDF for image] [End of figure] Survey respondents between the ages of 18 and 34 said they would be more likely to collect the new dollar coin if it were issued with a series of different images similar to the 50 State Quarters Program. Fifty-six percent of the survey respondents ages 18 to 34 said they would be more likely to collect the new dollar coin under such a program compared with 31 percent of respondents 65 and over. Focus group participant reactions were mixed when the proposal for a series of recurring images was mentioned as a way to increase use of the new dollar coin. Some participants said that the excitement generated by such as program would increase their interest in using the dollar coin. However, other participants felt that people would only collect commemorative circulating dollar coins, and that the dollar coin’s overall use would not increase. All survey respondents were asked which design themes they would favor if the new dollar coin were designed on a recurring basis like the 50 State Quarters Program. Survey respondents’ most popular coin design themes for such a recurring design program were symbols of America, historical events, American heroes, and U.S. presidents. The least popular coin design themes were sports and entertainment personalities, social activists, and ethnic diversity. (See figs. 16 and 17 for results from various categories.): Figure 16: Results of Survey Question regarding the Extent That Adults Favor or Oppose the Following Design Themes for the New Dollar Coin If It Had a Series of Images Over Time: The most popular design themes: [See PDF for image] [End of figure] Figure 17: Results of Survey Question regarding the Extent That Adults Favor or Oppose the Following Design Themes for the New Dollar Coin If It Had a Series of Images Over Time: [See PDF for image] [End of figure] Survey respondents of all age groups were equally supportive of U.S. presidents as a design theme. Respondents between the ages of 18 to 34 were more likely to favor social activists as a design theme for a series of recurring designs. Thirty-eight percent of the survey respondents ages 18 to 34 favored social activists as a design theme compared with 11 percent of respondents 65 and over. Respondents who identified themselves as Black or African American were more likely to strongly favor ethnic diversity as a design theme for a series of recurring designs. Forty percent of those who identified themselves as Black or African American strongly favored the ethnic diversity design theme compared with 18 percent of respondents who identified themselves as White. When asked their preference for a recurring design theme, focus group participants selected American heroes, historical events, and symbols of America as their top three choices. Participants were less likely to favor other themes, such as U.S. presidents, inventors or scientists, nature or wildlife scenes, ethnic diversity, social activists, or sports and entertainment personalities. Focus group participants mentioned specific names, places, and events for the most popular design themes. For American heroes they were: Amelia Earhart, Albert Einstein, first man on the moon, General Douglas MacArthur, Dwight Eisenhower, Martin Luther King, Jr., Thomas Jefferson, firefighters, teachers, Benjamin Franklin, Babe Ruth, Jackie Robinson, Daniel Boone, and Helen Keller. For historical events they were: first landing of a man on the moon, Pearl Harbor, Panama Canal, Iwo Jima, Wright brothers’ first flight, signing of Declaration of Independence, WWII, Korean War, Oklahoma City (memorial), Bunker Hill, Fort McKinley, and the Alamo. For Symbols of America they included: Statue of Liberty, the Golden Gate Bridge, the Washington Monument, Mt. Rushmore, the Grand Canyon, the Capitol Building, the Liberty Bell, and the American flag. Participants in one focus group also felt ethnic diversity was an important theme to portray on the coins and mentioned Martin Luther King, Jr., George Washington Carver, Alaskans, and Puerto Ricans. Agency Comments and Our Evaluation: We provided copies of the draft of this report for comment to the Secretary of the Treasury and the Director of the Mint. On November 22, 2002, we received written comments from the Director of the Mint, which are reprinted in appendix III. The Secretary did not provide comments. In commenting on a draft of this report, the Director of the Mint said she appreciated our comprehensive assessment and that many people believe that periodic coin redesign would encourage coin collecting and help emphasize our national character, pride, history, and heritage. We are sending copies of this report to the Chairmen and Ranking Minority Members of the Senate Committee on Banking, Housing, and Urban Affairs; the House Committee on Financial Services; the Secretary of the Treasury; the Chairman of the Board of Governors of the Federal Reserve System; and other interested parties. We also will make copies available to others upon request. In addition, the report will be available at no charge on the GAO Web site at http://www.gao.gov. Major contributors to this report were John S. Baldwin, Sr., Brad Dubbs, Emily Dolan, Donna Leiss, Susan Michal-Smith, Walter Vance, and Greg Wilmoth. If you or your staff have any questions, please contact me on (202) 512-2834 or at ungarb@gao.gov. Bernard L. Ungar Director, Physical Infrastructure Issues Signed by Bernard L. Ungar [End of section] Appendix I: Objectives, Scope, and Methodology: This report responds to a Congressional mandate that we conduct a study and identify any changes to maximize public interest and acceptance in U.S. coins, with particular attention to increasing circulation of the dollar coin.[Footnote 10] Our objectives were to assess U.S. public opinion regarding (1) the denominations of coins used; (2) the design of coins including who or what is depicted, color, size, and weight of coins; (3) the frequency of change in coins’ design; and (4) ways to increase acceptance and use of the new dollar coin. To gather data for our report, we contracted with the Gallup Organization, Washington D.C., a national public opinion research firm, to conduct a telephone survey of the U.S. population and hold a series of eight focus group discussions in four regions of the United States. Public Opinion Survey: Gallup conducted a telephone survey of adults, age 18 years or older in the United States. Survey participants were contacted in July and August 2002. The telephone survey contained questions about coin denominations, coin design, frequency of design changes and the Sacagawea dollar coin. (See app. II.): Telephone numbers for the sample were drawn using the Casady-Lepkowski Truncated List-Assisted RDD (Random Digit Dialing) sampling method. Survey Sampling Inc. provided a probability sample of telephone numbers drawn from 100 banks of telephone numbers that contained a minimum of three listed numbers. The adult with the most recent birthday was selected for interviewing within each household. Interviewers made at least 7 attempts on different days and at different times of day to contact the selected respondent at each household. The sampling method yielded 1,003 completed interviews with adults age 18 years or older in the United States. The resulting sample is weighted to adjust for unequal probabilities of selection due to varying household sizes and numbers of telephones. The sample is also weighted to match U.S. Census Population Projections for age, race, ethnicity (Hispanic, non- Hispanic) and gender. The initial Random Digital Dial telephone survey included 6745 telephone numbers. Of these telephone numbers, 4565 represented households (not businesses) and had at least one adult age 18 years or older living in the household. Completed interviews were conducted with 1003 respondents from the 4565 telephone numbers representing eligible households and households whose eligibility could not be determined. Table 1 summarizes the outcomes of the telephone interviewing and the response to the survey. Table 1: Disposition of Sampling Units: [See PDF for image] [End of table] The practical difficulties of conducting any survey introduce various types of errors, such as nonsampling errors. These survey results represent the views of respondents and do not represent the views of those who could not or chose not to respond to the survey. No determination can be made as to whether the individuals who did not complete the survey for various reasons have views that are significantly different from those who did respond to the survey. Several actions were taken by the Gallup organization to increase the response rate, including (1) making at least seven attempts to contact each sampled household; (2) training interviewers how to conduct the interview, avoid refusals, and persuade potential respondents to participate; and (3) recontacting households that deferred from participating in the interview when first called. Differences in how a particular question is interpreted and differences in the sources of information available to respondents can also be a source of nonsampling error. In addition, the views that respondents express to survey interviewers might not accurately describe or predict the actual behaviors of these same respondents. We included steps in both the data collection and data analysis stages for the purpose of minimizing such nonsampling errors. For example, we developed our survey questions with the aid of our survey specialists and the Gallup organization specialists. Pretesting of the questions and questionnaire was done by the Gallup organization. After pretesting the survey, some questions were eliminated or revised to shorten the duration of the interview. Time constraints and concerns about nonsampling error limited the length of both the introduction and individual questions. For example, we did not provide the survey respondents with the number of years since the last redesign for each denomination. Because the survey is based on a sample instead of the entire population, the survey results are subject to sampling error. Results for the total survey are surrounded by a 95 percent confidence interval of plus or minus 3.1 percentage points or less. Confidence intervals are larger for population subgroups, with a subgroup of n = 300 having a 95 percent confidence interval ranging between approximately +/-4 to 6 percentage points. Focus Group Discussions: Gallup conducted a total of eight, 2-hour focus group discussions. Two focus group sessions were conducted at contractor arranged facilities in each of four cities in the United States: Towson, MD; Detroit, MI; Atlanta, GA; and Seattle, WA. Each focus group discussion was designed to contain a minimum of 8 to 10 individuals. The organization of the discussions in the focus groups closely followed the subject areas covered in the public opinion survey. The focus group discussions were held after the questionnaire for the public opinion survey was finalized. The focus group discussions took place while the public opinion survey was being conducted. Focus group participants were asked to discuss issues such as the denominations of coins used in the United States, the design of U.S. coins, the frequency of change in coins’ design, and ways to increase acceptance and use of the new dollar coin. New dollar coins were provided to focus group participants during discussions about various aspects of the new dollar coin’s design. Participants mentioned some coins from other countries, such as the euro, but examples of these coins were not provided during the focus group sessions. The focus group sessions were conducted by moderators from the Gallup organization. In all focus group sessions, efforts were made to ensure that participants represented a diverse range of age, race, ethnicity, and sex. Focus group participants were paid an honorarium of approximately $50 for their participation. We did our audit work from January to December 2002 in accordance with generally accepted government auditing standards. [End of section] Appendix II: Questionnaire for GAO Survey on U.S. Coin Design and Overall Responses: [See PDF for image] [End of section] Appendix III: Comments from the United States Mint: DEPARTMENT OF THE TREASURY UNITED STATES MINT WASHINGTON, D.C. 20220: DIRECTOR OF THE MINT: November 22, 2002: Bernard L. Ungar: Director, Physical Infrastructure Issues United States General Accounting Office: Dear Mr. Ungar: We have reviewed the General Accounting Office’s (GAO) draft report, “U.S. Coins - Public Views on Changing Coin Design.” The issue of coin redesign is of considerable interest to the United States Mint, and we appreciate the efforts of you and your colleagues in the GAO for your comprehensive assessment of this issue. Historically, U.S. coinage has represented the values and strengths of our great Nation. As noted within your report, designs for the obverse (front) of three of our most common circulating coins - the penny, nickel, and dime - have remained largely unchanged for over 50 years. Many believe that new designs and a policy of periodic redesign would have numerous benefits and would be popular with the American public. This is evidenced by the outstanding success of the 50 State Quarters° Program, and the more than 139 million Americans who collect these coins. Many believe that new designs and a policy of periodic redesign would encourage interest in collecting American coinage both inside and outside of the coin collecting hobby, as well as inspire a renewed emphasis on our national character, pride, history, and heritage. Additionally, coinage redesign gives us the opportunity to spur popular interest in important historical events, and to reemphasize issues of importance to us as a Nation. The 50 State Quarters Program has shown this effect with educational lesson plans on state quarters which motivate Americans to learn more about each state and its history, geography and contributions to our Nation. Educators use them in the classroom as a springboard for research into each state and as a way to engage students in subjects of civic consequence. Thank you again for the opportunity to comment on your report. Henrietta Holsman Fore Director, United States Mint Signed by Henrietta Holsman Fore [End of section] FOOTNOTES [1] P.L. 105-124 authorized the 50 States Commemorative Coin Program and the production of a new dollar coin (31 U.S.C. 5112 and notes following). [2] The Treasury and General Government Appropriations Act for fiscal year 2002 (P.L. 107-67). [3] 31 U.S.C. 5112. [4] The District of Columbia and United States Territories Circulating Quarter Dollar Program Act, which was agreed to in the House on October 7, 2002, would authorize the Secretary of the Treasury to mint and issue, during 2009, redesigned quarter dollars commemorating the District of Columbia and the U.S. territories (See H.R. 4005 [107TH Congress]). [5] Established in 1993, the CCCAC advises the Secretary of the Treasury on the selection of subjects and designs for commemorative coins (31 U.S.C. 5135). [6] Coinstar National Currency Poll, June 2002. [7] Seigniorage is the difference between the face value of a coin and the coin’s cost of production. Seigniorage does not directly offset expenditures but can be used to reduce the amount of money that must be borrowed from the public to finance the deficit and the interest that must be paid on this borrowing. [8] U.S. General Accounting Office, New Dollar Coin: Marketing Campaign Raised Public Awareness but Not Widespread Use, GAO-02-896 (Washington, D.C.: Sept. 13, 2002). [9] In our report, New Dollar Coin: Marketing Campaign Raised Public Awareness but Not Widespread Use, GAO-02-896 (Washington, D.C.: Sept. 13, 2002), we concluded that while the Mint could address some of the distribution barriers and make the coin more available, this would not necessarily result in increased demand for the coin. [10] The Treasury and General Government Appropriations Act for fiscal year 2002 (P.L. 107-67). GAO’s Mission: The General Accounting Office, the investigative arm of Congress, exists to support Congress in meeting its constitutional responsibilities and to help improve the performance and accountability of the federal government for the American people. 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