A Treasury Department task force yesterday recommended that the government phase out the workhorse of the American monetary system, the dollar bill, and replace it with two also-rans the public so far has refused to accept: the Susan B. Anthony dollar coin and the $2 bill.
Federal Reserve officials said such a changeover, if approved, could be implemented as early as next year, but opposition is already building on Capitol Hill.
The task force report, which included other currency recommendations, was sent yesterday to Congress pending a decision on replacement by the Treasury, the Federal Reserve, the U.S. Mint and the Bureau of Engraving and Printing.
No timetable has been suggested for the switch. Two weeks ago, Fed Governor Philip E. Caldwell said, "The time will come in early 1980 when the supply of dollar coins will be high enough to warrant discontinued production and supply of the dollar bill. At that time, I believe we should meet commercial bank needs with dollar coins and $2 bills."
At a hearing yesterday before a House Banking subcommittee, William H. Wallace, staff director for Federal Reserve bank activities, said a crash program could bring about the demise of the dollar bill by late next year. However, he added, he was not advocating such a course of action.
If the Fed appears to bucking the buck issue, Congress isn't. Reps. Frank Annunzio (D-Ill.) and Thomas B. Evans Jr. (R-Del.) said they will introduce legislation to prohibit regulators from dumping the paper dollar without congressional approval. And Rep. Jerry Lewis (R-Calif.) has introduced a bill to stop minting and distribution of the Anthony dollar, which he termed "just short of a national disgrace."
Since it was first issued in July, the new coin has had the popularity of a wooden nickel. Close to 670 million have been minted, but most are still being held in reserve by banks, waiting for the public to accept them. Three months after it rolled off the assembly line, the Anthony dollar was dubbed the "Edsel of the monetary system" by Rep. Joseph G. Minish (D-N.J.).
It has also been called the "Carter quarter" by detractors objecting to its similarity to the 25-cent piece and the feeling that a dollar today won't buy much more than a quarter did a few years ago.
The irony of replacing the $1 bill with a pair of losers, the Anthony coin and the $2 bill, was not lost on Lewis, who said, "The administration has done some things that have left many other citizens and me amazed, perplexed and befuddled. But surely, even they must have heard the old adage: 'Two wrongs don't make a right.'"
The original battle of the buck centered on whose portrait would be on the new coin. Unknown at the time of the skirmish was the fact that the suffragette not only would win out over the general, when the Eisenhower dollar was retired, but also might supplant the Father of Our Country as well.
The results of a study the Fed commissioned from the University of Michigan were not received until after the congressional decision had been made to mint the Anthony coin. That study concluded that dollar notes would have to be withdrawn from circulation for the new coin "to achieve its full potential."
Rep. Mary Rose Oakar (D-Ohio), one of the Anthony dollar backers, said yesterday the United States, like some European countries, should have both coins and paper of the same denomination. However, the government's chief rationale for a new dollar -- annual savings of up to $50 million -- is based on substitution of the paper single by the more durable coin.
Other currency recommendations made by the task force were eliminating the half dollar, which is not in wide circulation due to its size and weight, and making pennies of a cheaper, aluminum alloy when the price of copper hits $1.14 a pound. It now costs more than 90 cents. The recommendations also called for a study of the circulation of $50 and $100 bills because of their use in drug trade and gambling.