The 50 State Quarters Program: A government program that actually worked

It is a rare occurrence for a government program to be both popular with the public and produce revenue for the U.S. Treasury. The U.S. commemorative quarter circulating series, which began with the 50 States Quarter Program, has been that rare success. Our economy is now in a transition period where more Americans are using debit cards and other electronic transactions rather than paper currency and coins, but the Quarters program has been embraced by the public and profitable for the government.

In 1995, as part of the first Republican Congress in 40 years, I became the new chairman of the House Domestic and International Monetary Policy Subcommittee, and we began a review of the programs under our jurisdiction, which included the United States Mint. One of the first issues that came up was the state of the U.S. Commemorative Coin program. Coin collectors were frustrated by the cost of the non-circulating commemorative coins and a decline in interest among young people in collecting coins. The last circulating commemorative coin had been the Bicentennial Quarter in 1976.

The coin community was very interested in a new circulating coin program that would attract the interest of the public, particularly young people. Coin collecting advocates, like Beth Deisher of Coin World, suggested a program that would honor the 50 States on the back of the quarter. I initially expressed some concern about public reaction to their plan for a 50-state quarter program, that “it might be perceived as monopoly money.” Our subcommittee held some public hearings on the concept of a new circulating commemorative coin program and began to work through the potential benefits and concerns over a major new coin program. It was pointed out that Canada was having success with circulating coins, and we began to see the educational value of highlighting key moments in the history of each state.

Each state would, for a limited period of issuance, be represented on the quarters. At that time it cost four cents to make a quarter, which Treasury then sold for 25 cents to banks creating seniorage, the amount between the cost of production and the sale price to banks, or 21 cents times the quarters distributed. The seniorage estimated in the billions of dollars would be used by Treasury to pay for some of its costs instead of tax dollars. Delaware would be first to have a state quarter. All of these arguments persuaded me to move forward with the necessary legislation.

Still, this was not an easy sale in Congress. After much persuasion and cajoling, it eventually passed the House and Senate. Meanwhile, I had met with Secretary of Finance Bob Rubin and his key staffer, Larry Summers, who expressed some of my original concerns. They asked for a study to allay their concerns. The firm of Coopers and Lybrand did a study that confirmed the positive economic impact of this idea, and the secretaries agreed if this legislation passed in Congress, they would recommend President Bill Clinton sign it, which he did.

Now, Delaware had the responsibility of being the first state. Working with then-Gov. Tom Carper, a contest was held for ideas on what should be on the Delaware quarter, and the image of the statue of Caesar Rodney, who had made a heroic ride by horse, to cast the deciding vote to make Delaware the first State was chosen.

With the assistance of Mint Director Phil Diehl and the Mint engravers, the coins went into production, and a first day celebration sponsored by Wilmington Trust Company, with many children participating, was held in Rodney Square in Wilmington, Del. The looks on the faces of those children as they squeezed their new quarters was going to be a success. The other 49 states followed thereafter to equal acclamation.

In the years that have since passed, the seniorage has mounted to more than $6 billion and seems permanent, as most of these coins are collected and not turned in. It has cost the taxpayers nothing, as even the new quarters are issued for the same 25 cents, and has saved the taxpayers many dollars, as the seniorage is used to help pay the costs of the Treasury rather than tax dollars. 

I went on to chair the K-12 subcommittee on the Education Committee, but I stayed involved with the coin programs, and a new one, the Beautiful States quarters, featuring National Parks in each state and a national wildlife preserve in Delaware, was enacted and has proven successful as well. Then-Mint Director Ed Moy was very helpful with this program.

Although I am often credited with having created the 50 State Quarter Program, the credit really belongs to all those who pushed us to get this done; my credit is for finally realizing what a good program this could be and pushing hard for it.

This leads to another thought. There are many other subjects managed by the government, such as health care and military innovations, that are eventually adopted and developed by the private sector. In some cases, compensation is received and in some it is not, but it would be wise to have someone in the administration and Congress as part of their duties be a clearing house for new innovations that might benefit Americans and reduce the tax burden, as well as did the 50 State Quarter Program. Something to at least ponder.

Michael N. Castle served as governor of Delaware from 1983 to 1992, and as a member of the U.S. House of Representatives from 1993 to 2010. He was partner at DLA Piper LLP (US) from 2011 to 2019.