Dollar-coin push would be blow to Crane & Co.
DALTON -- For the fourth time in 20 years, a Government Accountability Office report suggests replacing the $1 bill with a $1 coin to save the federal government money.
According to the latest study by the U.S. Government Accountability Office, which was released last week, replacing the $1 paper note with a $1 coin could save the government approximately $5.5 billion over 30 years.
Such a swap would hamper, not help, Dalton-based Crane & Co., which has been providing the paper for U.S. currency since 1879, and has been its sole supplier since 1964, according to the company's vice president. About 40 percent of the currency paper that Crane manufactures is made for the $1 notes, according to company vice president Douglas Crane.
"It certainly would be a major contraction to our business," said Crane. "We'd be looking at losing upwards of 125 jobs, and there would certainly be follow on effects, because the $1 bill represents a large part of our production."
Crane & Co. is the county's third largest employer, according to the Berkshire Chamber of Commerce.
The GAO is an independent, nonpartisan agency that works for Congress, and investigates how the federal government spends taxpayer dollars. The latest report was requested by U.S. Sen. Thomas Harkin, D-Iowa. The main supplier to the mint for currency coins is located in the Iowa city of Cedar Rapids.
This month's study is the fourth such report compiled by the GAO in 20 years, and updates its last estimate, which was released in April 2000.
In its previous reports, the GAO also recommended replacing the $1 note with a coin.
The late U.S. Sen. Edward M. Kennedy helped defeat a federal initiative that would have replaced the $1 note with a coin in 1995.
Douglas Crane said the GAO report has "a lot of interesting points in it," but said that the 41-page analysis also concludes that the net present value of coin production and processing is $3.5 billion more expensive than it is for paper. The GEO estimates that it would require three coins to replace every two paper bills that are currently in circulation.
"Coins circulate slower," Crane said. "A replacement program would force an expansion of the currency in use to do the same job as a note."
The GAO also found that replacing $1 notes with a coin would cause both the public and the government to lose money for four years, and that it would take a decade until the government reached the break-even point. The cost of producing coins for a full replacement of dollar bills would also never be fully recovered over the 30-year time period, according to the report.
"The other three times when they started looking at this, no one wanted to touch it," Douglas Crane said. "The truth is coins and notes are like apples and oranges. [The government] has an overwhelming preference for bank notes because they're more user friendly."
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