Why did pennies become inconvenient? The paper money was debased until the honest copper became an embarrassment to the government. Governments are no more venal than the common man. Thus they always toy with money to their advantage. Money created by printing and reserve rules is a freebie for the issuer (seigneurage), issued to keep up with the increased supply of goods. A little extra accidentally gets printed each time and you know who gets to spend it first.
After adding water to the stew, the cook can scoop out some tasty stuff before the pot is stirred. The cook is the government. The smart players are lined up right behind the government to spend the new money before people notice it's been diluted.
Pennies used to be honking big coins in Queen Victoria's day. Then small but pure copper.
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| Source: Wikipedia |
and again with steel instead.
And now gone down the memory hole.
My testy take on this is that the savings of millions of citizens were confiscated outside the rule of law. With sound money, the penny would endure.
Sound money, while desired, is an elusive goal.
There's a Mullah Nasrudin joke goes with this tale of dilution: The soup of the soup.
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