The penny in the United States is a one-cent coin. Presently the United States Mint strikes about 13 billion pennies annually, accounting for two-thirds of all coins struck by the mint. If all the pennies struck by the U.S. Mint since its inception were lined up edge to edge, the pennies would circle the earth 137 times.
Historically, the penny was a copper coin. Copper coinage came slowly to the English-speaking countries, perhaps because of its long association with currency debasement. Early in the seventeenth century Spain had debased its silver coin with copper alloy, eventually striking coins that were virtually all copper with face values commensurate with high silver content. The prevailing opinion in England was that only gold and silver met the standard of a monetary metal. A shortage of small change among tavern keepers and tradesmen, however, prompted the introduction of private tokens. To meet the need for small change the English government in 1613 first struck copper coins. England struck the first copper pennies for home use in 1797.
In 1722 the English government authorized William Wood to mint pennies and halfpence for Ireland and the colonies. These pennies were a mixture of copper, tin, and zinc, and had a touch of silver. In 1681 New Jersey sanctioned as legal tender copper coins called Patrick’s Pence, after the Irishman who brought the coins to the colonies.
Under the Articles of Confederation several states established mints that turned out copper coins. The Coinage Act of 1792 established the cent and the half cent and set the weight of the cent at 264 grains of copper. The act made no provision for the actual coinage of copper and the legal tender provisions of the act failed to mention copper coins. Congress soon amended the act to provide for the purchase of copper and necessary arrangements for the coinage of copper cents and half cents. Congress also began to think of the copper coinage as a fiduciary issue, and authorized the president to substantially reduce the copper weight of the cent and half cent.
Congress also banned the circulation of foreign copper coins, a restriction that did not apply to foreign gold and silver coins. The Spanish silver dollar circulated clearly as legal tender currency while the legal tender status of the copper cents and half cents remained in doubt. After President Washington reduced the copper content of the cent to 168 grains, the coinage of cents and half cents accelerated as a profit-making venture.
In 1857 Congress substantially increased the seigniorage on the copper coins. It abolished the half cent, and reduced the weight of the one-cent coin to 72 grains with 88 percent copper and 12 percent nickel. In 1864 Congress again changed the composition of the cent, raising the copper content to 95 percent, and making up the remaining 5 percent with zinc. Congress also made the one-cent coin legal tender.
In 1909, to mark the one-hundredth year since his birth, Abraham Lincoln became the first historical figure to adorn a United States coin. Fifty years later an image of the Lincoln Memorial appeared on the reverse side, and today both sides of the penny commemorate Abraham Lincoln.
Rising copper prices in the 1970s caused a shortage of pennies, then worth more as copper than as money. Pennies were melted down for copper, and to keep pennies in circulation the government reduced the penny’s copper content to 2.5 percent, the remaining 97.5 percent composed of zinc.
At the end of the 1990s the penny’s future is somewhat uncertain. Inflated price levels may have made the penny coin obsolete, but proposals to discontinue the penny have not met with widespread approval. The U.S. Mint contends that coinage of the penny is profitable to the government, and other large major industrialized countries, including Great Britain, Canada, Japan, Germany, France, and Italy, have kept the penny, or penny equivalents, in production.