Board of Governors of the Federal Reserve System 

________________________________________________________________________ 

Annual Report to the Congress on the 

Presidential $1 Coin Program 

June 2011
2011 Report to the Congress on the Presidential $1 Coin Program 

Background

Pursuant to section 104 of the Presidential $1 Coin Act of 2005 (Public 

Law 109-145), the Board of Governors of the Federal Reserve System is required to 

submit an annual report to the Congress on the remaining obstacles to the efficient and 

timely circulation of $1 coins; on consultations with industry representatives, the vending 

industry, and other coin-accepting organizations; and recommendations for legislative 

action that the Board may determine to be appropriate. 

Recent Activities and Feedback from Depository Institutions

Since our 2010 annual report, the Federal Reserve Banks (the Reserve 

Banks) distributed nearly 290 million James Buchanan, Abraham Lincoln, Andrew 

Johnson, and Ulysses Grant Presidential $1 Coins, satisfying depository institution 

demand.1 To facilitate this successful distribution, the Federal Reserve continued to 

refine the Presidential $1 Coin Program based on stakeholder input and experiences with 

previous Presidential $1 Coin releases. The Federal Reserve held meetings with 

depository institutions and community bankers, as well as with armored carrier 

representatives, to gather feedback about demand and potential obstacles to the 

circulation of $1 coins.2

At these meetings, industry representatives noted that the coins continue to 

be easy to order and that our communication about program dates and changes is 

effective. Participants again indicated that transactional demand for $1 coins has not 

increased since the start of the program and that overall demand continues to come 

primarily from collectors. Most meeting participants did not believe that demand would 

increase significantly for future coin releases, with the possible exception of the coins 

commemorating the most popular former Presidents. Some depository institutions stated 

that because of operational challenges associated with distributing the $1 coin to all of its 

branches and decreasing demand, as well as increased levels of $1 coin inventories at the 

branch level, they may not continue ordering $1 coin for all branches or may stop 

participating in the program altogether. 

At these meetings during 2009, some depository institutions noted that 

more time was needed to allow remotely located branches to have the $1 coins on hand 

by the public release date. As a result, the Reserve Banks implemented a new special 

ordering period in 2010, beginning with the Millard Fillmore Presidential $1 Coin 

release.3

 We discussed the change to the ordering period in last year’s report, but at that 

 

1

 The 2010 Annual Report to the Congress on the Presidential $1 Coin Program can be found at 

http://www.federalreserve.gov/boarddocs/rptcongress/dollarcoin/2010/dollarcoin2010.pdf 2

 Beginning in 2008, the Federal Reserve and the United States Mint agreed to meet with their respective 

coin user groups through each organization’s normal channels each year of the program and share feedback 

as appropriate. 

3

 The “special ordering period” consists of the both the “pre-release staging period” before the United 

States Mint’s public release date (when depository institutions can order the coins from the Reserve Banks 

but cannot provide them to the public) and the “introductory period” after the release date (when depository 

institutions can provide the coins to the public and can continue ordering from the Reserve Banks). 
2 

time the depository institutions did not have sufficient experience to evaluate it fully. 

(See figure 1 below for diagrams of the previous and current special ordering periods.) 

Figure 1

Previous Special Ordering Period 

(through the Zachary Taylor Presidential $1 Coin) 

 

 

Current Special Ordering Period 

(beginning with the Millard Fillmore Presidential $1 Coin) 

 

 

Depository institutions have stated that the new ordering period has 

improved the ability of their remotely located branches to order and receive coins by the 

release date, while accommodating their customers’ ordering patterns. 

 

Some of the Federal Reserve’s largest cash customers have indicated that 

they are considering whether to continue providing the Presidential $1 Coin to 

customers.4

 If these depository institutions opt not to order Presidential $1 Coins, then 

the size of Reserve Bank orders from the United States Mint would decline significantly. 

 

 

4

 These depository institutions provide coin and currency services to many small depository institutions that 

do not obtain cash services directly from the Federal Reserve. 

Public Release 

Date

Four-week introductory period

Week 1 Week 2 Week 3 Week 4 Week 6

Two-week pre-release 

staging period

Week 5

Public Release 

Date

Two-week 

introductory period

Week 1 Week 2 Week 3 Week 4

Three-week pre-release 

staging period

Week 5
3 

Depository Institution Demand Continues to Decline

The Federal Reserve’s experience with circulating commemorative coins 

other than $1 coins has differed significantly from our experience with $1 coins. In the 

early years of the 50 State Quarters® Program, in an effort to support the legislation, the 

Reserve Banks ordered more quarters than were necessary to meet demand and filled 

many depository institution orders with new coins rather than with available inventories 

of circulated quarters.5

 The residual coins from each release, plus the excess quarters 

redeposited by depository institutions, created excessive inventories at the Reserve 

Banks. The Reserve Banks were able to reduce those inventories over time, however, 

because of significant, ongoing transactional demand for quarters.6

 

For previous $1 coin programs, the Reserve Banks experienced large 

excess inventories for much longer periods of time because transactional demand was 

very low. The Presidential $1 Coin Program experience is consistent with those other $1 

coin programs. Dollar coin payments to circulation increased significantly in the first 

year of the program but have declined since that time, and are now declining at a lesser 

rate, while receipts from circulation have significantly increased. We do not believe that 

demand will improve. We also note that a 2008 Harris poll found that more than threefourths of people questioned continue to prefer the $1 note.7

 

The Reserve Banks have studied detailed payment and inventory data for 

previous Presidential $1 Coin releases at the Reserve Bank offices and off-site coin 

terminals, supplemented these data with feedback from depository institutions about 

expected demand, and developed better forecasts for each successive release. The 

Reserve Banks have actively managed inventories throughout the special ordering period 

for each coin, relocating coins around the country, as necessary, to meet demand. As 

figure 2 indicates, however, depository institution demand has generally continued to 

decline, albeit at a decreasing rate. 

 

 

5

 After the initial years of the 50 State Quarters Program, the Reserve Banks began to move to centralized 

management of coin ordering and distribution, which resulted in improved forecasts of coin demand. In 

2008, the Reserve Banks fully centralized coin management at the National Cash Product Office, located at 

the Federal Reserve Bank of San Francisco. 

6

 Because of lower payments of quarters to circulation during the financial crisis, Reserve Banks’ quarter 

inventories increased significantly in 2008 and 2009; however, in 2010 and year-to-date 2011 demand has 

improved and Reserve Banks began to work down those inventories. 

7

 http://www.reuters.com/article/idUSN1435329120080414 
4 

Figure 2 

Note: We believe that the increase in demand for the Abraham Lincoln Presidential $1 Coin is because of 

his popularity as a president and does not reflect a change in the overall demand for the Presidential $1 

Coin. We expect similar results for other popular presidents.

Significant Growth of $1 Coin Inventories

Because we have not seen an increase in demand, the Reserve Banks’ $1 

coin inventories have increased significantly over time, even though improved 

forecasting and ordering practices have reduced the number of residual coins at the end of 

each new release period. Payments to depository institutions of new, previously 

uncirculated Presidential $1 Coins represent 75 percent of all $1 coin payments. 

Additionally and more significantly, depository institutions have redeposited a significant 

number of excess $1 coins with the Reserve Banks. A recent sampling of Reserve Bank 

$1 coins inventories shows that depository institutions have redeposited roughly 40 

percent of all Presidential $1 Coins issued. The Reserve Banks hold the residual coins as 

inventory at their offices and off-site coin terminals. Reserve Banks can only use excess 

inventories to fill the remaining 25 percent of payments to depository institutions because 

of the special ordering period requirement in the Presidential $1 Coin Act. 

As shown in figure 3 and table 1, previous $1 coin supplies, plus the 

excess $1 coins returned by depository institutions, elevated total Reserve Bank 

inventories of all $1 coins to over $1.2 billion as of May 31, 2011, or about $1.1 billion 

more than the Reserve Banks held before the start of the Program. Based on historical 

Presidential $1 Coin payments and receipts, along with current inventory growth trends, 

the Federal Reserve estimates that it could hold more than $2 billion in $1 coins by the 

time the program is expected to end. Because of vault storage constraints and insurance 

limitations at coin terminals, the Reserve Banks have been forced to spend resources to 

expand storage capacity to hold the excess $1 coins, with no perceptible benefit to the 

taxpayer. 

303

200

168

142

114 105 96 99 96 85 82 75 72 72 70

89

71 73

212

158

126

108 106 96 94 93 87 82 76 71 71 68 68

84

69 71

0

50

100

150

200

250

300

350

(in millions) 

Presidential $1 Coin

Reserve Bank Orders from the Mint and Payments to Circulation

Mint orders

Payments to 

circulation
5 

In particular, the Reserve Banks will construct a new storage facility at the 

Federal Reserve Bank of Dallas, at a cost of approximately $650,000. In addition, the 

Reserve Banks will incur costs of more than $3 million to ship the surplus inventory from 

other Reserve Banks to the new facility. We anticipate this will provide enough space to 

handle forecasted inventory growth through the end of the Presidential $1 Coin Program. 

Figure 3 

Note: The United States Mint has indicated that it paid to circulation $121 million Native American $1 

Coins through its Direct Ship Program in 2009, $47 million in 2010, and $16 million in 2011 (as of June 1). 

The United States Mint also indicated that it has paid to circulation a total of $60 million Presidential $1 

Coins via direct shipments since the start of the Presidential $1 Coin Program (as of June 1). These data 

are not included in the above Reserve Bank payments to circulation. 

 

‐

100

200

300

400

500

600

700

800

900

1,000

1,100

1,200

1,300

1st Quarter

2nd Quarter

3rdQuarter4th Quarter

1st Quarter

2nd Quarter

3rdQuarter4th Quarter

1st Quarter

2nd Quarter

3rdQuarter4th Quarter

1st Quarter

2nd Quarter

3rdQuarter4th Quarter

1st Quarter

2nd Quarter

2007 2008 2009 2010 2011

Millions of pieces

Quarterly$1 Coin Inventories, Receipts, Payments, & Mint Orders

MintOrders Receiptsfrom Circulation RB Paymentsto Circulation RB Inventories
6 

Table 1 

Quarterly $1 Coin Inventories, Mint Orders, Receipts, & Payments 

($ millions)

QUARTER

1

BEGINNING

RB

INVENTORY

2

MINT 

ORDERS

3 

RECEIPTS 

FROM 

CIRCULATION

4 

RB PAYMENTS 

TO

CIRCULATION

5 

ENDING RB

INVENTORY

1+2+3-4

Q1/2007 67 301 47 250 165 

Q2/2007 165 201 69 223 212 

Q3/2007 212 171 87 178 292 

Q4/2007 292 144 85 153 368 

Q1/2008 368 119 87 153 421 

Q2/2008 421 109 82 137 475 

Q3/2008 475 96 93 138 526 

Q4/2008 526 104 88 138 580 

Q1/2009 580 96 92 119 649 

Q2/2009 649 87 88 122 702 

Q3/2009 702 85 118 117 788 

Q4/2009 788 77 123 110 878 

Q1/2010 878 89 108 120 954 

 Q2/2010 954 72 92 105 1,013 

 Q3/2010 1,013 88 96 123 1,074 

 Q4/2010 1,074 96 97 130 1,137 

 Q1/2011 1,137 86 101 116 1,208 

Q2/2011(as of May) 1,208 88 66 110 1,252 

Note: the Reserve Bank payments to circulation do not include the $1 coins that the United States Mint has 

issued directly into circulation. See note to figure 3. 

Commemorative Circulating Coin Processes in Other Countries

To gain a broader perspective on the management of commemorative 

circulating coin programs, we reviewed the experiences of other countries. We found 

that other major industrial countries have implemented very different processes from the 

United States for issuing commemorative circulating coins. For example, the Eurosystem 

countries have regulations specifying that all commemorative circulating coins should be 

limited to the 2-euro coins. Eurosystem countries have also limited the quantities of 

these coins that these countries may issue.8

 Other countries, such as Canada, limit the 

issuance periods and continue to issue the traditional design simultaneously with the 

commemorative circulating coins. Some central banks (for example, the Bank of 

England and the Bank of Canada) are not involved in the distribution of commemorative 

circulating coins or do not accept the return of coins from depository institutions. These 

types of restrictions serve to minimize the number of excess coins produced by the mint 

or held by the central bank. 

 

8

 The Eurosystem countries’ regulations specify that quantities are limited to the higher of the following: 

0.1 percent of the total 2-euro coins in circulation, or 5 percent of the total of 2-euro coins from the issuing 

country. 
7 

Recommendations for Legislative Action

Native American $1 Coin Requirement 

Our first annual report to the Congress on the Presidential $1 Coin 

Program recommended that the Congress adjust its required minimum production for 

“Sacagawea design” $1 coins.9 The Congress later reduced the Sacagawea production 

requirement in the Presidential $1 Coin Act with the enactment of the Native American 

$1 Coin Act (Public Law 110-82). Under the revised requirement, the number of $1 

coins minted and issued in a year with the Sacagawea-design on the obverse shall not be 

less than 20 percent of the total number of $1 coins minted and issued in such year. The 

Reserve Banks’ depository institution customers, however, have again indicated that they 

have experienced very little or no demand for Native American $1 Coins.10 Given the 

lack of evidence to date that the Presidential $1 Coin Program will stimulate demand for 

$1 coins as a broad-based transactional medium, and a recent survey finding that nearly 

60 percent of all Native American $1 Coins issued have been redeposited to the Reserve 

Banks by depository institutions, the requirement that a specified minimum number of 

coins be minted and issued in excess of actual public demand will continue to result in 

production and storage costs to the taxpayer without any offsetting benefits. 

Therefore, we support the enactment of the United States Mint’s 

legislative proposal to eliminate the 20 percent requirement in the Native American $1 

Coin Act, by striking paragraph (5) of Section 5112(r) of title 31 of the United States 

Code, as contained in Section 119 of the Administrative Provisions for the Department of 

the Treasury in the President’s Budget for Fiscal Year 2012. 

Mandatory Introductory Period 

The Federal Reserve has extensive experience successfully managing 

circulating commemorative coin programs. We have met demand for the 50 State 

Quarters® Program, the America the Beautiful Quarters Program, the Westward Journey 

Nickel Series, and the Lincoln Bicentennial One-Cent Program while maintaining 

operationally efficient inventory levels. The Presidential $1 Coin Program is the only 

circulating commemorative coin program to have statutorily mandated introductory 

periods in which Reserve Banks are required to make specific designs available in 

unmixed quantities. As discussed above, the Reserve Banks’ inventory levels of 

Presidential $1 Coins are growing significantly. This inventory growth, in large part, is 

because of the introductory period requirement in the Presidential $1 Coin Act. The 

Reserve Banks must order each new design from the United States Mint even though the 

Reserve Banks have ample inventories of $1 coins. Therefore, we recommend that 

Congress eliminate the introductory period required by the Presidential $1 Coin Act, by 

striking paragraph (i) of Section 5112(p)(3)(D) of title 31 of the United States Code. 

 

9

 http://www.federalreserve.gov/boarddocs/RptCongress/dollarcoin/dollarcoin.htm 10 Because of the lack of significant demand from Reserve Banks’ depository institution customers for 

Native American $1 Coins and the Reserve Banks’ high inventories of $1 coins, the Reserve Banks are not 

ordering Native American $1 Coins from the United States Mint. As indicated in the note to figure 3, the 

United States Mint is issuing these coins directly to the public. The coins end up at the Federal Reserve, 

however, as the public deposits them with their depository institutions, which then deposit them with their 

Reserve Banks.