Origin of (and reason for) minted non-magnetic currency

by go_on_without_me

I’m in the U.S and when I was a kid I asked my parents why I couldn’t pick up coins with a large magnet we had. I was told that if coins were magnetic, it would make stealing them and tricking people with them a lot easier.

I’ve been trying to research the history of coinage in the U.S. but I’m struggling to find any specific person or group that decided on the metals for the coins, and whether magnetism was a consideration, or just a coincidence.

Who proposed the early coins, and were they specifically made to not be magnetic?

wotan_weevil

It's mostly coincidence. Only a minority of metals are magnetic (i.e., strongly magnetic = ferromagnetic, since diamagnetic and paramagnetic effects are typically too small to be detected with everyday magnets), and the only ones of importance in coinage are steel and nickel. The traditional major coinage metals - gold, silver, and copper - are non-magnetic.

Once upon a time, the amount and type of metal in the coin was the key thing that determined the value. Replacing gold, silver, and copper in coins with other metals made them less valuable (but was done, with consequent devaluation of coinage), so these metals remained important in coinage. Today, depending on country, we can still have coins that are referred to as copper, silver, and gold coins due to that tradition, despite the modern alloys having no gold or silver, and often little copper.

Why do we see less usage of gold, silver, and copper today? With the divorce of values of currencies from silver and gold standards in many countries, inflation brought the situation where coins would be worth more for their metal than their face value. Sometimes, this could happen very quickly - the original Australian 50 cent coin (80% silver, 20% copper) introduced with the decimalisation of Australian coinage in 1966 was only minted for 2 years before rising silver prices pushed their cost above 50 cents, forcing a switch to a cupronickel alloy commonly used for "silver" coins (75% copper, 25% nickel). Just as "silver" coins are often cupronickel to keep their cost below their face value, Australian "gold" coins are also copper alloys (92% copper, 6% aluminium, 2% nickel). Copper, relatively cheap, continued to be commonly used for low-value coinage, often in the form of brass and bronze alloys. However, other cheaper metals were sometimes use, to keep costs below face values. Inflation and rises in copper prices compared to currency values led to copper becoming widely uneconomical. Two common responses have been withdrawal of low-value copper coins from circulation, and their replacement with cheaper metals. In Australia, the 1 cent and 2 cent coins were withdrawn, without replacement, in 1992. In Britain, also in 1992, 1 penny and 2 penny copper-alloy coins were replaced by copper-plated steel (followed by steel for "silver" (i.e., cupronickel) 5p and 10p coins, along with using magnetic separation to remove the older coins from circulation).

These steel coins are magnetic. Other magnetic coins are in use around the world. One problem with iron/steel coins is rust - who likes rusty money? Thus, most modern steel coins are plated, or are rust-resistant stainless steel alloys. Modern manufacturing allows steel coins to be plated more cheaply, and stainless steel alloys are also a modern development. Neither was feasible for low-ancient coinage, so iron coins were unusual. They saw some use, with some Chinese governments issuing cast iron coins when insufficient copper was available. Most modern magnetic coins are (a) plated steel, (b) stainless steel, or (c) nickel alloys with enough nickel to be magnetic (the common 75/25 cupronickel alloy isn't magnetic).

In summary, few old coins were magnetic since the metals usually used for coins were - coincidentally - not magnetic. Inflation has led to wider use of magnetic metals in coins.

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