I am almost willing to bet that if I asked you when the Department of the Treasury asked the congress to consider putting a moratorium on the melting of nickels and pre-zinc cents, you would not be able to tell me. You’d probably think, that is something old. Well not really. The congress passed this moratorium in 2006. You would probably not be able to tell me why they passed this moratorium. You’d be thinking, they’re cents and nickels, that is just six cents when added together, what does the Treasury and the Congress care about them for? That is where I come in.
In 2006, all precious and industrial metals started climbing in price, and not just a little bit. It went up by 30-40% overnight. Finally the metal in pre-zinc cents, 1982 and before, and nickels had reached a point where the metal was actually worth more than the face value of the coin itself. Interesting tidbit, the nickel is made up of 75% copper and 25% nickel and weighs exactly 5 grams. It has had this exact composition as a five cent piece since its debut in 1866. It was the first time nickel was used in a 5 cent piece hence the name nickel. So back to the point. That meant that our fiat currency had now gained a value to the point where it was again actual currency, specie if you will, even though it was not precious metal. In the late 19th century when silver rose to the point it was worth more than the coins face value printed into it people took them and exported them in bulk to smelters in order to capitalize on the difference between face value and metal value. The government was very unhappy that people were making money of them.
Fast forward to 2006. The government still doesn’t want anyone using them to make any money. No they should be the ones emptying your pockets, not the other way around. Given that fact, when copper hit an all time high per pound and nickel wasn’t far behind a pre-82 cent was worth 2.5 cents each and nickels had reached a metal value of 7.5 cents. Now this may not seem like much, but the government knew that someone would collect these in bulk and send them to be melted, making them some significant money in the process. Of course, the Congress cited the fact that change is needed to perform everyday transactions when they outlawed the melting of these two coins. That was just a cover-up as conservative estimates say there is roughly a billion dollars in loose change just sitting, unused in people’s homes across the U.S.
Personally I have a jar that I keep pre-82 cents in. Whenever I get one, I separate it and into the jar it goes. I may never really have more than 10-20 pounds when I finish. (143 pre-82 cents to the pound on average) But someday, when the government thinks they have reclaimed all the copper cents from circulation and have changed the composition of the nickel they will de-criminalize the melting of cents and nickels. That is when I will cash in.