Melting US coins Silver. Pennies Nickels illegal? legal?

Question

The question has been asked a number of times and very often people will respond that melting or defacing US coins is illegal. This answer is false.

Here is the law.

"Section 331 of Title 18 of the United States code provides criminal penalties for anyone who fraudulently alters, defaces, mutilates impairs, diminishes, falsifies, scales, or lightens any of the coins coined at the Mints of the United States. This statute means that you may be violating the law if you change the appearance of the coin and fraudulently represent it to be other than the altered coin that it is. As a matter of policy, the Mint does not promote coloring, plating or altering U.S. coinage: however, there are no sanctions against such activity absent fraudulent intent"

It could not be any clearer, you can do anything you want to do with your coins as long as you are not trying to commit fraud with your altered coins.

This applies to all US coins... but things get a little cloudy...

...As of April of 2007 the US Mint Under new rules, made it "illegal to melt pennies and nickels" according to one major news outlet.

Now the interesting thing is the use of the word "rule" instead of "law".

The mint cannot pass laws. Only Congress can pass laws but what do the major news organizations care what the constitution says?

I've tried to find out if the "rule" governing the melting of pennies and nickels has actual become law , My research suggests it has not. Please correct me if I'm wrong.

At any rate, the current actual law makes it clear that melting or defacing your US coins ( any and all coins including pennies and nickels) is not illegal and since, in this case, the passing of a new law would contradict a current law and changing the old law is extremely unlikely to happen. I would suggest the mint is all bark and no bite.

Conclusion:

As long as you are not trying to commit fraud, you can do whatever you like to with your coins.

As far as the new "rules" regarding pennies and nickels, the mint, with the help of the un-American press, can claim and say anything they like but you can't be prosecuted for a law that does not exist.

Answer 1

There is a Federal Law (e.g. language in the United States Code) - 31 U.S.C. 5111(d) - which "authorizes the Secretary of the Treasury to prohibit or limit the exportation, melting, or treatment of United States coins when the Secretary decides the prohibition or limitation is necessary to protect the coinage of the United States."  (The US Mint is an agency of the Department of the Treasury.)  That means that the first paragraph of xraytech's answer is entirely correct.

The US Mint's interim rule in December 2006, and their final rule in April 2007, which imposes penalties for exporting, melting, etc. certain quantities of US one and five cent coins, was issued pursuant to that Federal law:

http://www.usmint.gov/downloads/consumer...

(This link downloads the relevant file - a Microsoft Word document - from the US Mint's website)

I personally find it amusing that the Mint would be concerned about running out of pennies in circulation, due to exporting or melting, and impose such strict penalties on anyone who might take those actions, when pennies are often discarded on floors and in street gutters, and there has been long-standing consideration, at least on the part of some Federal legislators, about phasing out that denomination altogether.  In addition, in February 2008, less than a year after the Mint's final rule went into effect, Treasury Secretary Paulson casually admitted he'd like to see pennies gone from our currency:

http://www.foxnews.com/story/0,2933,3339...

Regardless of the soundness of the logic which led to it, the "rule" you mention has the backing of Federal law.

Finally, just to be clear, since there's some ambiguity about this both in the original question and in the other answer, this law does not pertain to silver coins.  (Back in 1965, the Treasury prohibited exporting or melting of silver coins, but that prohibition has long since been rescinded.  In part, that's because silver coins have not been part of the American currency for nearly three decades: the last US silver coins issued for circulation were silver-clad Kennedy half dollars bearing the date 1969, containing 40% silver by weight.)

Furthermore, at present, only pennies and nickels are especially protected in this way; all other coins and currency are more broadly protected from alteration for fraudulent purposes, but if you wanted to, say, export or melt quarters for some reason, there's no specific rule governing that.

Answer 2

Regulations (rules) have the force of law as most actual laws specify that the governed agency has the authority to promulgate such regulations.  I know of at least 2 specific cases which have affected me directly in which the governed agency's authority to regulate has the force of law.

I THINK you're correct that one can do with coins (or bills/bank notes, for that matter) as one desires, as long as there is no fraudulent intent.  Considering the price of silver and gold, any of those coins likely have more value as scrap than face value.  However, they likely have more numismatic value than scrap value, so melting them for scrap is likely a foolish undertaking....