HOW COINS ARE
United States coins
are all produced by the Treasury Department through the US Mint.
After production, the Mint ships the coins directly to Federal
Reserve banks and branches. The Federal Reserve banks then release
the coins as they are required by local banks. Demand for money by
the public varies from day to day, from week to week and from season
to season. Banks are usually first to feel the impact of the
public's demand for cash, so banks turn to their regional Federal
Reserve bank for coins when supplies are low.
To assure a smooth
and sufficient flow of
coins, the US Mint continually revises its techniques for
estimating coinage demand. In planning production and coin
shipments, the Mint uses several economic indicators and historic
seasonal trends to decide how many coins to produce. Since
forecasting coin demand cannot be done with total accuracy, the Mint
typically produces a sufficient amount of coins that would absorb
any deviation that might occur. Armored carriers usually transport
ten-cent coins, quarter-dollar coins and half-dollar coins, while
tractor trailer trucks transport
one-cent coins and
Federal Reserve banks
arrange in advance to receive new coin shipments for the coming
year. They do this in amounts and on a schedule that will maintain
their inventories at the required levels. Under this arrangement,
the US Mint can schedule its production efficiently. However, even
with advance planning, there are occasions when coin shortages
arise. The Federal Reserve banks must follow the advance shipping
schedules and unless there is an emergency, there are no provisions
for obtaining additional coins.
Federal Reserve banks
receive coins at face value. They store the coins until orders need
to be filled from the commercial banks in their district. The
Federal Reserve banks fill orders with both new and circulated
coins. They also fill orders without regard to date or mint mark.
Shipments of coins leave the Federal Reserve banks by armored car,
registered mail, or express mail.
If a commercial bank
has excess coins on hand, they can return the coins to their Federal
Reserve Bank where the coins are sorted for fitness. Badly worn or
bent coins are returned to the US Mint where they are melted and
made into new coins. Foreign and counterfeit coins are removed from
circulation. According to Federal Reserve sources, over 20 billion
coins valued at well over $2 billion pass through their coin
processing units each year.
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