The United States $1 Coin Act of 1997 authorized the new dollar coin to replace the Susan B. Anthony dollar coin, which began production in 1979. Even though the Anthony coin was never widely circulated, it became clear by 1997 that the government’s supply of Anthony coins would soon be exhausted. In addition to giving the Mint authority to develop a new dollar coin, the act also specified that the coin be golden in color and have a distinctive edge and tactile and visual features to make it easier to distinguish from the quarter-dollar coin. To ensure that the new dollar coin would be recognized by vending machines and other coin-operated equipment designed for the Anthony dollar coin, the new dollar coin is the same size and has a similar electromagnetic signature that is similar to the Anthony dollar coin. The $1 Coin Act authorized the Secretary of the Treasury, in consultation with Congress, to select the design of the new coin. In May 1998, the Secretary established a Dollar Coin Advisory Committee to consider alternatives and recommend a design concept for the obverse (heads) side of the coin. The final design selected was an artist’s rendition of Sacagawea, a Shoshone interpreter who assisted the Lewis and Clark expedition of 1804-06 to the Pacific Ocean. The act also required the Secretary to create a marketing program to promote the use of the new dollar coin by commercial enterprises; mass transit authorities; and federal, state, and local government agencies. The Mint marketing program had three major components, including research to identify market opportunities, a national public awareness and education program that included a national advertising campaign, and a business marketing program that was designed to increase commercial use of the new dollar coin in targeted sectors. According to the Mint, the first shipments of the new dollars were sent to the Federal Reserve on January 18, 2000, and the Federal Reserve sent shipments to financial institutions beginning January 26, 2000. The Mint also shipped new dollar coins directly to Wal-Mart stores to support a large, nationwide promotion of the coin that began on January 30, 2000. While authorizing the production of a new dollar coin, the $1 Coin Act also provided that the dollar note should not be removed from circulation on the basis of provisions in the act. In authorizing the circulation of both the dollar note and dollar coin, the act did not establish a goal for the number of new dollar coins or establish a level of dollar coin circulation compared with the dollar note. The act also required the Secretary to conduct a study on the progress of new dollar coin marketing program and submit a report to Congress on the results of the study no later than March 31, 2001. The Mint submitted a March 30, 2001, report to Congress. In reports accompanying the 2002 Treasury and General Government Appropriations Bill, the Senate and House Committees on Appropriations expressed concern that the Mint’s 2001 report to Congress did not adequately describe the nature and extent to which the new dollar coin was being used in commerce. The House report directed the Mint to submit a new report by March 31, 2002. In addition, the Senate report accompanying the 2002 Treasury and General Government Appropriations Bill also expressed concern that it had not received information on the contracts and agreements secured between the Mint and nongovernment entities and public relations firms mentioned in the Mint’s March 30, 2001, report. The Mint submitted its second report on March 29, 2002. A Senate committee report and the Conference Report accompanying the 2002 Treasury and General Government Appropriations Bill further directed the Mint to submit a marketing plan to the Appropriations Committees and stipulated that the plan must be approved by the committees before the Mint could draw additional funds from the Mint Public Enterprise Fund to promote the new dollar coin. The Mint submitted its plan, the “Golden Dollar Coin Marketing Plan for Congress,” on April 24, 2002. In March 2002, coins of all denominations made up 5 percent, or $32.1 billion, of the $642 billion in currency and coins that were in circulation. The demand for coins from businesses and the general public fluctuates, and the Mint and the Federal Reserve monitor several factors, such as economic growth, coin collection activity, and Reserve Bank coin inventories, to determine the number of coins that will be produced and shipped to the Federal Reserve. The Mint receives orders for coins from Federal Reserve Banks on a monthly basis and normally ships coins directly to Reserve Bank offices. The Federal Reserve provides coins to over 11,000 of the 20,000 U.S. depository institutions, such as banks, savings and loans, and credit unions. Smaller banks that do not order their cash and coins directly from the Federal Reserve obtain cash services through many of the larger banks. In addition to Federal Reserve offices, Reserve Banks use over 100 coin terminals generally operated by armored carriers to store and distribute coins. Besides functioning as Federal Reserve coin terminal operators, the armored carriers wrap and deliver coins for a fee to banks and retail customers to meet public demand. Reserve Banks normally fill coin orders from banks by first paying out previously circulated coin until this inventory is depleted and then by using new coin inventories to meet demand. To support the introduction and promotion of the new dollar coin, the Federal Reserve departed from its normal policy and held all previously circulated Anthony dollar coins received by Reserve Banks and filled orders only with new dollar coins. However, in January 2002, Reserve Banks returned to their normal practice of filling orders with previously circulated coins. Nevertheless, Reserve Banks will continue filling requests for new dollar coins until their inventories of new dollar coins are depleted. On the basis of the public demand for the dollar coin, the Federal Reserve estimated that, at the end of April 2002, it had over a 1-year supply of dollar coins. Since the older Anthony and new dollar coin have a similar electronic signature and neither the Reserve Banks nor armored carriers have equipment to separate them, the supply of circulated coins consists largely of commingled Anthony and new dollar coins. The Federal Reserve estimated that, as of April 2002, 70 percent of the dollar coin inventory is commingled Anthony and new dollar coins and about 30 percent is new dollar coins. In its response to a March 2002 Treasury Office of Inspector General report, the Mint said it would temporarily suspend production of the new dollar coin on March 31, 2002, and reevaluate the need for producing coins for general circulation in the first quarter of fiscal year 2003. In our May 1990 report on proposals to introduce a new dollar coin in the United States, we noted that the government did not successfully manage the introduction of the Anthony dollar coin because the dollar note was not simultaneously eliminated, the coin too closely resembled the quarter, and the coin was not effectively promoted. We identified several key ingredients for a successful conversion, including a reasonable transition period, a well-designed dollar coin, a public awareness campaign, support from the administration and Congress, and withdrawal of the dollar note from circulation. We estimated in April 2000 that replacing the dollar note with a coin would save the government an average of $500 million a year, because coins last much longer than currency and there are lower government costs to distribute coins than currency. The new dollar coin is profitable on a per unit basis. While it costs the Mint about $0.12 to produce the coin, the government receives $1.00 of spending power for each coin, thereby leaving a margin of $0.88 per coin. The Mint spent at least $67.1 million to promote the new dollar coin from 1998 to 2001, including $62.3 million for four contracts involved with creating the marketing program and advertisements. Of the remaining $4.8 million, the Mint spent $0.4 million to conduct public relations events and programs to publicize the new dollar coin’s launch that distributed 1,251,000 coins; $4.4 million for 23 promotion partnerships with banking, entertainment, retail, grocery, and restaurant chains that distributed an estimated 132 million dollar coins; and $36,000 to conduct promotional events with transit systems that distributed 36,000 coins. Most of the $62.3 million in contracts for creating the marketing program and advertisements was used for a $40.5 million national advertising campaign featuring George Washington that was designed to build public awareness, generate acceptance, and encourage the new dollar coin’s use. The Mint also worked with contractors to stimulate the new dollar coin’s use in state and local government operations and used its own staff for marketing activities in federal government facilities. However, the Mint did not track the costs for the use of Mint staff for these efforts. Though initial public awareness generated by the advertising was strong, the new dollar coin, like the Anthony dollar coin, has failed to achieve widespread use. Federal Reserve data show a net payout of 558 million new dollar coins in 2000, the year the dollar coin was introduced. But, in 2001, demand and public interest in collecting the new dollar coin dropped, and the net payout decreased by 65 percent to 194 million coins and remained at lower levels in the first half of 2002. In May 2002, the Federal Reserve estimated an annualized figure of $120 million in new dollar coin net payout for 2002. The Mint has estimated that people use the dollar coin in 4 percent of dollar transactions, but Mint data from July 2001 show it to be about 1 percent. To create and execute the new dollar coin marketing program, the Mint contracted with outside firms for the three major components of the program: research, business marketing, and a public awareness campaign. The research component, designed to help identify target markets for the new dollar coin before its January 2000 launch, was conducted under a $1.5 million contract with Marketbridge, a marketing services company. To provide the Mint with the necessary market research data, Marketbridge first analyzed existing Anthony dollar coin use in various industry sectors. Marketbridge also analyzed each industry for potential new dollar coin use by looking at several factors, such as the size of the industry, the average transaction size, and the current coin equipment capability in that industry.