再Making no cent, May 12th 2012 P64 少額貨幣の消失と長期インフレトレンド
Farewall to the Canadian penny. The last one-cent coin, in circulation ever since Canada developed its own currency in 1858, was minted on May 4th. The coin had become a nuisance, weighing down consumers' wallets and costing more to produce than it was worth. The penny is just the latest in a series of coins to disappear after centuries of use. The British farthing was worth just a quarter of an old penny, or one-960th of a pound, but it still lasted almost 700 years before it disappeared from circulation in 1960. Remarkably enough, half-farthings were also issued in the 19th century, and even smaller coins (third-and quarter farthings) were used abroad. Inflation killed the farthing just as it has killed the Canadian cent. Small coins are living on borrowed time once they become useless for buying individual items. A single penny could buy the first British postage stamp, the Penny Black, in 1840 and was still sufficient to buy a small ice cream for a short-trousered Buttonwood in the late 1960s. Nowadays you would struggle to find a humble ice lolly selling for less than a pound. By the time the farthing disappeared, Britain was entering its most rapid period of peacetime inflation. In 1971 decimalisation followed, under which the smallest coin was the halfpenny (one-200th of a pound). It lasted only 13 years before it was abandoned. Even when governments do not abolish coins, a market solution may emerge. In Italy, before euro adoption, almost all items cost so many thousands of lire that shopkeepers and restaurants stopped handing over small amounts of change, offering customers sweets instead. Coins are not the only casualties of monetary history. The old British ten-shilling note disappeared in 1969, replaced by the new 50-pence piece. The one-pound note, which had been around for almost 200 years, was replaced by a coin in 1988. In those cases, wear and tear was to blame. The coins lasted 50 time as long. Sometimes the whole currency gets redenominated. The French franc was worth around a fifth of the dollar just before the first world war. It attained the exchange rate in the 1960s. In the meantime, however, two zeros had been knocked off the face value of French bank notes：100 old francs became 1 new one. In effect, the franc had lost 99% of its value (and that against a dollar with a reduced purchasing power against gold). But the rise in prices, itself a symptom of inflation, does for coins in the end. Nowadays melting down coins to exploit the potential for arbitrage is often illegal, but in the Middle Ages it was standard practice. As a result the content of the farthing, which was once made of silver, was steadily switched to cheaper copper, tin and bronze. The Canadian government is presenting the decision to abolish the penny as a matter of public economy：the move will save C$11m a year in production and distribution costs. There have been calls for the American penny, which costs 2.4 cents to produce, to follow suit. But that would mean greater use of the nickel (five cents), which is even less economic to produce, at 11.2 cents for each coin. Tradition, and a public suspicion of such goverement initiatives, have saved the penny so far. These losses are offset by the profits each government makes by producing other notes and coins for less than their face value. This profit, known as seigniorage, is one of the great hidden sources of government revenue. Quantitative easing - the ability of central banks to create money with a click of a mouse, and to use the proceeds to buy bonds and reduce the government's borrowing costs - is potentially an even more lucrative wheeze. The demise of small coins also owes something, of course, to the move towards electronic money. Retailers have typically priced goods just below a whole number：$9.99, say. In part, that was a measure against fraud：employees were forced to open the till in order to provide the penny change. That is less pertinent these days, when most customers are paying by debit or credit card. Canadian retailers will presumably want to exploit the psychological appeal of less-than-whole-number pricing, so many will opt for C$9.95 rather than the full C$10. That might make this shift different from the usual experience of consumers - that any currency reform becomes an excuse for higher prices. But history suggests shoppers cannot win in the end. If you don't look after the pennies, then the pounds (or dollars) will disappear by themselves.
