The E-Sylum:  Volume 10, Number 51, December 16, 2007, Article 18

ISRAEL DROPPING LOWEST DENOMINATION COIN, ADDING NEW 2 SHEKEL PIECE

Dick Johnson writes: "Israel has done something with its
coins that the United States should do: Issued a higher
denomination coin and drop the lowest. Wise move. The Bank
of Israel introduced a 2-shekel coin last Sunday, December
9, 2007.

"It is all part of a well-devised plan, first started with
the abolishment of the 1-agorot coin in 2005, the lowest
denomination then in circulation (I wrote of this in The
E-Sylum at the time: vol 8, no 8, article 13). The plan
continues with a survey of Israeli citizens last summer.

"That survey, conducted by Dr. Mina Tzemach, states most
Israelis welcome the new 2 shekel coin. According to public
opinion, its introduction will diminish the existing gap
between NIS 1 (one New Israeli Shekel) and NIS 5 coins.
This will facilitate the daily transactions and bring more
efficiency in coin handling.

"Note well the word 'efficiency.' Rounding off retail prices
and abolishing coin denominations of low denominations creates
greater efficiency in commerce. It also creates a demand for
larger value coins to maintain a balance of the correct number
of circulating denominations. (What's the ideal number of
denominations? Count the number of coin compartments in cash
registers in that country! Don't go over that number!)

"The next step in Israel's coin system plan is to abolish the
5-agorot coin (comparable to U.S. 5-cent piece).  A statement
accompanied the announcement of the new 2-shekel coin:  'The
next change in Israeli currency might be to abolish the
unpopular 5-agorot coin, as a majority of Israelis do not
appreciate receiving it in change.'

"In addition to Israel, Australia, New Zealand and a number
of Scandinavian countries have eliminated their lowest
circulating coin denomination.  Canada is just about to
abolish their cent coin. When will the U.S. Treasury officials
realize the inevitable -- it will be necessary to abolish
the U.S. cent!

"Eliminating the cent will lead to greater efficiency in
American  commerce.  (And create a demand for higher
denomination circulating coins to maintain that efficiency.)

"The Israeli news story gives details on the design and
designer of its new 2-shekel coin:
-http://www.israel-times.com/business/2007/12/israel-a-new-2-shekel-coin-see
s-daylight-3478/

  Wayne Homren, Editor

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