Mundane Things That Matter: Abolish US$1 Bills!

DSCF9695If the Obama administration wanted to strike a dramatic blow for public transit, one that would immediate speed up transit journeys all across America, they would abolish the $1 bill, and get everyone used to the $1 coin.

Travelling in the US last month, I had several opportunities to feed dollar bills into fareboxes. Even if you have perfectly flattened your dollar bill, and folded out all its corners, the process takes at least three seconds per bill, and often closer to five, during which a bus or streetcar with a 100+ passengers goes nowhere.

 Even with off-board fare collection, dollar bills are a major nuisance for both passengers and transit agencies. In San Francisco, you can’t put them directly in the fare gates of the MTA Metro subway. You have to go to a BART ticket machine, find the special green button to change $1 into quarters, then take the quarters an put them in fare gates. In stations not shared with BART, MTA has its own machines that simply exchange a dollar bill for a dollar coin, which the faregates will accept.  (The coin is US legal tender, but so unusual that it might as well be a specialized transit token.)
But it’s on-board fare collection where dollar bills cause serious delay.
DSCF9697 Has anyone done a comparative study of typical bus operations in the US compared to Canada, actually timing the individual act of fare payment? My own informal observations suggest that it’s impossible to pay a $2 fare with dollar bills in less than about 7 seconds, while in Canada a $2 coin takes less than one second to register in a farebox.  (Australia and New Zealand also have coins for values below $5, but their boarding delay is more related to the slow manual process of making change for passengers, a practice almost unknown in North America.)
Has someone done a study of the aggregate savings, in running time and maintenance, that would be realized at once if $1 were a coin?
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31 Responses to Mundane Things That Matter: Abolish US$1 Bills!

  1. Cap'n Transit August 1, 2009 at 7:55 pm #

    Hear, hear! We actually do have $1 coins, and all of the transit payment machines I know about here in NYC take them. Commuter rail ticket machines dispense them as change. I always try to carry at least one just in case.
    The problem is that banks and shops don’t like them, possibly because their customers don’t want them. I’ve never gotten any as change in a store; I’ve had cashiers give me quarters or dimes even though they’ve got perfectly good dollar coins sitting in their trays. Sometimes when I go to a bank I ask for a few, and the tellers act like I’m asking them to stand on their heads and sing “Yankee Doodle Dandy” or something.
    I was visiting France once when they switched from one kind of ten-franc coin to another, and they took a hard line about it: after a certain date, no banks would accept the old coins as legal tender. Everyone switched over to the new coins with minimal complaints, and that was that. Here in the US, we’re not just incapable of getting rid of single dollar bills, but also of the completely useless penny.
    I don’t know why this is. I can only guess that it’s because the politicians are afraid to piss off some crank who’ll mount a “save the dollar” campaign.

  2. Matthew Pennington August 1, 2009 at 8:10 pm #

    Great suggestion!
    I paid for a cartoon of strawberries from a Boston streetvendor once with Sacajawea dollars. He turned around to the vendor behind him and, giving him the money, said, “Here! I can’t stand these things.” So, I think public opposition would be pretty fierce.
    But, why? Inflation has made today’s dollar equivalent to a quarter maybe 40 years ago. Back in 1975, a ride on the Chicago bus system was 40 cents, three or four coins. Now, it’s 2.25 in cash, which takes two bills and a quarter.
    The post office tried giving out Sacajawea’s after they first came out (which is why I had them in Boston), but they evidently gave up on that little bit of civic improvement.

  3. Jman August 1, 2009 at 9:15 pm #

    I’ve had a bad experience trying to pay with a dollar coin on a bus here in San Antonio. I needed to pay $1.25 for my fare and transfer slip. I boarded the bus with the new presidents dollar coin and a quarter in hand. I dropped them into the farebox, waited for the driver to give me my transfer. I asked him when he was gonna give me my transfer, to which he told me that I had only put 15 cents into the machine. I said no, I put a dollar coin and a quarter. Luckily I think these guys are trained to just give you a tough time and then let you on the bus even if you got no money at all. There’s no money-retun button on the box to get your coins back and show the driver, but whatever he let me on anyway.
    I remember working a cash register at a food place and also at a retail place. It is hard as hell to give back $1 coins and $2 bills as change. I think I had 2 or 3 situations where I gave the change, and then the customer asked for a paper $1, or with the $2 bill, two $1 bills.
    The only way to get those in circulation is for people like you and me to get them from our banks, and then to go out and spend them. However, then it’s up to cashiers to give them back out as change to others. And finally it’s up to those people to accept the change and not asks for $1 bills.

  4. Brent August 1, 2009 at 9:29 pm #

    It worked in Canada because the Bank of Canada actively phased out the dollar bill once there was a critical mass of loonies in circulation. Same thing with the two-dollar bill and the toonie nine years later, but I don’t recall there being as much controversy for that because Canadians were used to having a dollar coin by then and had already gone through the process once. Now for me it seems odd to visit the States and get all this paper back as change for a $5, or to have to put a bunch of paper bills into vending machines (I imagine fareboxes would be a similar odd feeling).
    I think if the Bank of Canada and Royal Canadian Mint had given Canadians a choice by having both in circulation at the same time, the loonie would have failed just as various American dollar coins have. However my impression as a Canadian is that the dollar bill is even more ingrained down in the States (i.e. the greenback, the almighty dollar, etc.)

  5. SpyOne August 2, 2009 at 1:10 am #

    The US Mint would love for us all to start using those dollar coins; that’s what the whole program with putting all the presidents on them (one at a time, 5 guys a year) is about. Their reason has nothing to do with transit: dollar bills wear out too fast. They get handled more than larger bills, and have an average lifespan under a year, so the government is spending literally billions of dollars a year to print new $1 bills. The coins cost more to make, but take a LOT longer to wear out.
    It hasn’t really worked. As a cashier I can tell you that customers will almost all ask for a paper dollar instead. They are forever complaining about the weight of change in their pockets. So those coins just build up in cash drawers until a collector comes through the line and asks for them.
    As a transit customer, I can offer anecdotal evidence of the time savings: I started carrying those dollar coins for exactly that reason. I am always very aware that the driver has a schedule to keep, so I try to make my boarding and fare-paying take as little time as possible. I used to count out my fare ahead of time and hold it in my hand as I waited, but since I began taking my bicycle along (and using the bike rack on the bus) I need to have my hands free until I am actually boarding, which means I needed a payment method I could quickly remove from my pocket, and that wouldn’t take a lot of time to get exact change.
    Using the $1 coins in addition to quarters saves me weight in my pocket (each weighs only 1/3 more than a quarter), is of a different size and color so they are easy to distinguish (since 2000 the US dollar coin has been covered with a molybdenum alloy so it is golden in color), and makes my boarding process as fast as possible. Also, in the event that I have gotten wet (due to rain or sweat or anything else), coins don’t care, while machines hate wet bills.
    We need to get off the stick, modernize our currency, introduce $2 and $5 coins and phase out the $1 bill and the penny. It won’t be popular: everybody is sure that having every transaction rounded to the nearest $0.05 will round their cost up and their change down (rather than coming out even at the end of a year, which is more likely), but it can be sold. Especially if you tell them how much the government spends minting those pennies they didn’t want in their pockets. In fact, the big losers if we drop the penny will be the charities who put those change jars next to the register, as about 40% of the coins in those jars (by volume) is pennies, because people realize that pennies are heavy and basicly worthless, so they just drop them in the jar rather than put them in their pocket. That happens less with nickles.

  6. Jarrett at August 2, 2009 at 1:45 am #

    Hey.  I really appreciate your comment.  I'd love to live in a world where you were the typical transit passenger, and the typical cashier!  Cheers, Jarrett

  7. Cap'n Transit August 2, 2009 at 8:50 am #

    I’ve read that single dollar bills wear out very fast, so all the government would have to do to get people to start using the coins would be to stop printing the bills.
    Why don’t we hear about this government waste from the blowhards at Fox News? Because the constituency demanding the perpetuation of dollar bills – apparently out of pure fear of change – is the kind of person who watches Fox News, and they won’t dare criticize their audience.

  8. Nathan Williams August 2, 2009 at 9:19 am #

    Couple of things here. I think one of the major reasons for not phasing out the $1 bill is political; the company that makes most of the paper for US currency, Crane & Co. of Massachusetts, has the ear of several powerful politicians (reportedly, both Senators Kerry and Kennedy), so that’s a major hurdle to actually changing the cash system. I think people would adapt just fine.
    That said, while this is an issue in retail and vending generally, I feel like transit is moving faster than other vendors into cashless small-value transactions, with stored value proxcards and other technologies. That certainly has its own costs, but does address a lot of the delay issues when you hit a critical mass of users.
    Also, a cautionary example from here in Boston: Our new fare system, with the aforementioned proxcards, came with new bus and trolley fareboxes. One of the major criticisms of them is that they’re much slower to handle coins – you have to put them in one at a time, whereas the previous fareboxes could accept and count a handful of change dumped in all at once. So even coins can be slow if you economize too much on the fareboxes.

  9. Alon Levy August 2, 2009 at 10:18 am #

    Some transit systems, like London and Singapore, have higher cash fares than smart card fares, in order to induce people to stop clogging buses with slow cash payments. Even coins are slow by RFID card standards.

  10. Chris August 2, 2009 at 10:21 am #

    Instead of taking on the US gov’t on its absurd currency practices (pennies? all bills the same colour/size?), it may be easier to enact a multi-city oyster-card system similar to that of London. Boarding times on London buses have been dramatically improved since moving to the oyster card system(I’m sure some data exists somewhere?) All buses take both coins and oyster cards, but the oyster card fare is at a ~50% discount. Total loading time for 5-10 passengers with the oyster card system is far below 1 second per passenger.
    EZ-pass toll systems in the US are multi-state, so I’m sure it would be possible to get a multi-city oyster card program working.
    Oyster cards also can handle a complex array of toll types: they can be pre-loaded with either pay-as-you-go currency or with a variety of weekly, monthly or annual passes, and correctly apply a multitude of discounts and restrictions.

  11. W. K. Lis August 2, 2009 at 10:56 am #

    When the New York Subway opened in 1904, and for several years after, the fare was 5¢ or a nickel coin. Today the cash fare is $2.25 or 45 nickels.
    In 1904, the dollar bill was big money. Inflation has made the dollar bill the same as the old time nickel.

  12. EngineerScotty August 2, 2009 at 11:11 am #

    Speaking of dollar coins–I kinda wonder how much of the rejection of the Anthony and Sacajawea dollars was due to political distaste, from right-wing cave-dwellers not wishing to see a feminist and Native American icon so honored…

  13. EngineerScotty August 2, 2009 at 11:14 am #

    Put another dollar in, in the dollarodian….

  14. Alon Levy August 2, 2009 at 9:38 pm #

    I don’t think it had anything to do with Anthony and Sacagawea. The Eisenhower dollar coin of the 1970s wasn’t popular, either.

  15. Robert Sugg August 2, 2009 at 10:00 pm #

    ____Keep in mind that Ike’s were cartwheels – way larger than today’s dollar coins. They may not even fit in most of today’s coin slots.

  16. Peter August 3, 2009 at 10:59 am #

    “EZ-pass toll systems in the US are multi-state, so I’m sure it would be possible to get a multi-city oyster card program working.”
    They already have cards that are usable in multiple states. They’re called credit cards. Credit cards with little RFID chips would be even faster than coins.

  17. Aaron Priven August 3, 2009 at 11:34 am #

    There used to be an organization called the Coin Coalition that advocated in favor of eliminating the penny and replacing the dollar bill with a dollar coin. Sadly it seems to be defunct, but once upon a time APTA was listed as a member.

  18. EngineerScotty August 3, 2009 at 12:30 pm #

    Right now, authentication times for credit card transactions is too long for transit applications; especially on-vehicle. One of the advantages of smartcard-based systems (such as the Hong Kong Octopus card) is that there’s no need to communicate with a central server to process a transaction.
    That, and credit card systems demand a particularly hefty chunk of the transaction as their fee.

  19. Irwin August 4, 2009 at 2:50 pm #

    I think one way to get past the political issue with Crane & Co is for the Treasury to re-introduce $2 bills and discontinue $1 bill at the same time. And the US Mint should cease producing penny (which cost more than 1 cent to make…) in exchange for a contract for more $1 coin. But such a common sense approach seems to be a rare occurrence in our Government now days.

  20. calwatch August 5, 2009 at 11:35 pm #

    Like one of the above posters said, the best way to show your support is to buy the coins and spend them. Luckily, the US Mint is selling them – $250 at a time – on your credit card.$1coin/ Some enterprising people have used their 2% cash return credit cards and are just ordering boxes of them and wheeling them direct to the bank, thousands of them at a time, which defeats the whole purpose of the program. But, if your transit agency doesn’t accept credit cards, you can get these “tokens” at a 1-2% discount, depending on what credit card you have.

  21. Ian Turner August 8, 2009 at 7:53 pm #

    Spending the coins at shops will not make any difference. As a cashier, I would never give $1 coins back to customers as change unless I were out of $1 bills. People don’t want the $1 coins and will usually ask for bills anyway, which just slows things down. Likewise with $2 bills, 50¢ coins, and other unusual currency items.
    The best way to address this is to let the $1 bill become a collector’s item. Just stop printing the damn things and the coins will take over pretty quick.

  22. BobA August 11, 2009 at 1:00 pm #

    Get rid of the dollar bill AND the penny AND (eventually) the nickel. What is the value of a penny or nickel. Decimalize the monetary system 1.0 1.1 1.2 etc.
    But PLEASE come up with a dollar coin that is easily distinguished from the quarter! The Canadian Loonie and Twoonie are quite distinct, no confusion with the other coins in size adn color.

  23. Tom West February 19, 2010 at 6:14 am #

    I am reminded of the parking situation in Chicago, where the parking meters (of the one-per-space type) would only accept coins, and the charge was $4… meaning users had to feed in SIXTEEN coins. They machines would fill up and jam on a regular basis. (I think they switched to a ticket machine system that accepetd credit cards.)
    The ‘standard’ fare box I’ve seen on many transit systems in Canada has a space to feed in ($5) bills. The machine sucks it in and shows it in a window to the driver, who then pushes a button to confirm its value. (The same slot is used for tickets). It’s much cheaper than an automatic bill reader, and it’s not generally worth forgeing $5 bills.

  24. Tom West June 4, 2010 at 7:55 am #

    On teh subject of making change: In the UK (outside of the larger cities), you generally have some sort of fare-by-distance, so being able making change is regarded as essential. A common solution is a system whereby you put your money in a slot, the driver selects the fare, and then chnage and ticket from another machi8ne (generally located behind teh driver to encourage you to move back and let the next person in).

  25. Silver Dollar Finder August 3, 2010 at 10:51 pm #

    I appreciate your creative insight into helping public transit, but I don’t think abolishing the paper dollar bill would really help much.
    People can already put money onto fare cards by using their credit card. Most frequent transit riders already do this.
    Riders who prefer to use dollar coins can already do so. Dollar coins are already minted in quantities that exceed demand. Consumers have consistently declined to use these coins for anything other than niche uses.
    For many daily transactions, the public finds dollar bills to be more convenient to carry. They can be counted faster and more accurately by humans. The total monetary value of the human time saved by using bills may well exceed the cost to the government of replacing the bills.
    The dollar coins have certain niche uses, like automatic vending machines. The government should continue producing a supply sufficient for these niche uses. As a collector, I also like these coins and hope the government continues making them. That said, I do believe consumers should have a choice and the government should continue producing paper dollar bills.

  26. Brian Campbell September 6, 2010 at 1:41 pm #

    Just force people not to use the paper $1 and the worthless penny. The government makes me do all kinds of nasty things like filing taxes and controls me with millions of orwellian laws. Why the drama, just stop making them, do you think a career politician is going to lose his job over this? Get rid of the nickel too!!!!!

  27. Ezra September 29, 2010 at 5:39 pm #

    When I visited British Columbia as a transit tourist, I had a bad experience: the bus fare was $2.50 each, so we tried to pay our two fares with a $5 bill. We couldn’t: there was no bill slot in the farebox. We ended up having to go get change at an all-night liquor store.
    In the US, there’s always a bill slot in a bus’s farebox, speeding up the paying of large/multiple fares.

  28. Bob Davis October 11, 2010 at 2:17 am #

    I guess we “Yanks” really are different: We refuse to give up dollar bills, we won’t touch the Metric System with a ten-foot (three-meter) pole, and for the most part we ignore the World Cup and play our own kind of football. And there are quite a few of us who would rather die than take a transit bus to the hospital.

  29. Brian McCann January 6, 2011 at 9:33 am #

    I am not ready for a serious comment on this issue; liking most of the ideas here, anyway.
    To really have reform, there has to be a strong and powerful constituency to favor such. I suggest strippers. If the US went to a ‘looney and twooney” system and the smallest bill is a $5, payments for lap dances would start at a higher floor and escalate in $5 increments. And I believe that stippers are highly influential in DC and most state capitals. It’s time to mobilize, ladies.

  30. Anne Lingotes April 28, 2012 at 12:13 pm #

    I can understand those who would rather use coins rather than dollars as paper as sometimes it can be a hassle and time consuming to unfold bills from a wallet or purse.

  31. JP May 23, 2012 at 10:26 am #

    I totally support the U.S. Dollar coin and have been using them for well over a year now. Most people seem to respond well to them, and I say it’s time to pull the plug on the Dollar Bill.