Johns Hopkins economist Steve Hanke argues in the Wall Street Journal today lambastes lobbyists today with a vigor that almost approaches the level shown by my Washington Examiner colleague Tim Carney. The lobbyists he has in mind work for mining companies and he is angry that they are lobbying Congress for legislation which will phase out dollar bills in five years and effectively force everyone, he says, to use dollar coins they have avoided–the Sacagawea and Susan B. Anthony dollars which are in circulation but seldom used.
I take a different view. No other advanced country, so far as I am aware, uses a bill for amounts approximating a dollar. They use coins, which are longer lasting and more convenient to use in vending machines and parking meters. Coins last longer and don’t bulge up in your wallet.
But my major objection to Hanke’s article is that totally fails to mention that there are lobbyists working on both sides of the issue. On the dollar bill side is Crane & Co., the Dalton, Massachusetts paper manufacturer which has produced all the paper for currency since 1879, according to Wikipedia. Crane, which also manufactures high-quality stationery, developed the process of interweaving silk threads into paper, which has made counterfeiting more difficult. So it may owe its currency contracts to merit. But it also employs lobbyists, including former House Majority Whip and House Minority Leader Dick Gephardt. Crane’s position has long been championed by the Massachusetts congressional delegation. This is not a battle, as suggested by Hanke, between greedy lobbyists and an unrepresented public, it’s a battle between one set of lobbyists and another.
Crane & Co. has had actually had even more direct representation on Capitol Hill. Winthrop Murray Crane joined the firm in 1870, the year he turned 17, and in 1879 he and his brother Zenas Crane Jr. secured its monopoly for producing the paper for currency. Winthrop Murray Crane served as Governor of Massachusetts from 1900 to 1903 (the commonwealth elected its governors every year until 1920) and then was appointed and elected to the U.S. Senate, where he served from 1904 to 1913. I suspect that we can be sure that Senator Crane would have opposed any law to phase out the dollar bill.