Dollar coin not welcome in a paper-money town; New gold-colored buck seen as unneeded change in home of the bank note


DALTON, Mass. -- Between now and March 1, when a new $1 coin goes into circulation, the U.S. Mint will be hard at work trying to convince Americans that they need it. Television advertisements, Cheerios boxes -- even a float in today's Macy's parade -- will sing the praises of the gold-colored Sacagawea dollar.

But they should not waste their effort in Dalton.

"Frankly, I don't want it in my register," said Ruth Trapnell, 60, at the gift shop where she deals in scented candles, novelty beer steins and T-shirts that say "The Buck Starts Here." Here, in the town that produces all of the paper for U.S. currency, people are only too aware of what most Americans never consider: Money itself is big business.

On the day when the first Sacagawea coin turns up in a box of Cheerios, many in Dalton will be less than delighted.

"I feel as though if this coin is made, you're stealing jobs from people here," said Trapnell. "You've got to figure this is what's keeping this town alive, and we're not going to let go of it without a fight."

Throughout its multimillion-dollar launch of the coin, which honors a Native American woman who assisted the Lewis and Clark expedition, the mint has maintained that the coin is not intended to squeeze a single bank note out of circulation. But as other countries have swapped their smallest notes for coins, they've all withdrawn the paper equivalent, and many experts hold that the coin's success depends on it.

The battle between advocates of the coin and defenders of the bank note has been heating for a decade, fueled by lobbies on both sides. Backing the coin are copper mining interests, mass transit authorities and coin-operated industries. Defending the bank note are the printers' union, the ink and paper industry, and manufacturers of dollar-bill validators.

The entrance onto the scene of the papoose-toting Sacagawea brings the conflict to a new stage. While the coin will not be the death blow that papermakers feared in 1995, when several members of Congress were pushing to eliminate the bank note, neither is the Sacagawea coin doomed to failure like its predecessor, the Susan B. Anthony dollar. Unlike the Anthony dollar, the Sacagawea dollar could never be mistaken for a quarter, because of its gold color and wide, smooth edge.

The Mint has thrown itself into the task of making sure the Sacagawea dollar succeeds -- partly through a glossy marketing campaign, and partly with a plan to inject it into circulation at cash registers across the country.

Although coin advocates were disappointed not to win an outright elimination of the bank note, they maintain that history is on their side. As a note's real value falls, governments often replace it with coins, which last 10 times as long.

When the Government Accounting Office last reviewed the choice between dollar bills and coins, in 1991, it concluded that, for a dollar coin to work, the dollar bill would have to be eliminated, said Steve Bobbitt, a spokesman for the American Numismatic Association. His organization "recognizes the impossibility of both coexisting successfully for long," he said.

Mint director Philip Diehl countered that "the skeptics are wrong that the dollar bill and the coin cannot co-circulate, and we are about to prove them wrong." With a comparatively minuscule first-year circulation of around 120 million coins -- a very small percentage of the dollar bills in circulation -- the coin poses no threat to the paper dollar, he said.

It's hard not to look back at the failure of the Anthony dollar, which Diehl called "the Edsel of American coinage." In 1979 and 1980, the mint produced 900 million Anthony dollars, assuming they would become "coin of the realm," said mint spokesman Mike White. Those coins didn't run out until this year.

But the mint's position is that the Anthony dollar failed because it wasn't promoted properly. The government isn't usually in the business of selling its services.

"When you think of it, defense isn't a product," said Stan Collender, senior vice president of the Washington-based public relations firm Fleishman Hillard, which won the contract to handle the Sacagawea's promotion.

"From the beginning, we realized that the U.S. Mint was looking at this as a consumer product launch, not unlike when a company launches a new car," said Collender. He added, "This is a fairly unique situation in the sense that there is a competing, or let's say an alternative" product.

Another mistake the mint made with the Anthony dollar was what Diehl called the "chicken-and-egg problem" -- namely, that people will not start using a coin unless they receive it as change. So the mint has tentative agreements with "two household-name retailers" to give customers Sacagawea dollars as change, he said.

The measure worries Lansing Crane, 54, who left his law practice four years ago to run the 120-year-old family business, Crane & Co., which makes paper for dollars. Crane's last four-year contract with the government, won in February, was worth $260 million.

Lansing Crane said the mint's marketing campaign constitutes an unfair advantage that, in the private sector, might break antitrust law.

"Look at what the government's doing here. It's a classic case of pushing a product on the public," Crane said. "You sort of scratch your head and say, why would anyone spend all this money ramping up a program whose ultimate objective is eliminating the dollar note?"

And in the Main Street stores, the consensus is that there is more to the gold-colored coin than meets the eye.

"This is just so bizarre. How many multibillions are we spending just to redo what we did before?" said Stan Walczyk, owner of a Main Street pharmacy.

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