LOOKS LIKE IT MAY FLY. Canada tries a Loonie idea: a $1 gold coin
Ottawa — `Go with it,'' says the television message. The ad isn't for some new yogurt or soft drink. It's for Canada's new gold-colored $1 coin. So far, Canadians are doing just that - going with it. Since the coin was introduced early last summer, Canadians have ``bought'' more than 75 million of them. For several weeks the handsome coins were pocketed as rarities or curiosities. Now, says Denis M. Cudahy, vice-president of manufacturing at the Royal Canadian Mint, they are showing up more often in transactions, as 6 million a week are minted.
The Canadians have even coined a name for their new coin - the ``Loonie'' - referring to the loon, the watergoing bird with the eerie call, which is engraved on the reverse of the coin. (A likeness of Queen Elizabeth II is on the obverse side.)
``It is not a derogatory term,'' says Mr. Cudahy. ``People tend to give nicknames to things they like.'' The Canadian Press news agency was quick to give the nickname an official spelling - Loonie - heading off renderings such as Looney or Loony.
For the Mint, the coin's easy acceptance is a considerable relief after the American public's flat rejection of the the Susan B. Anthony $1 coin, introduced in 1979 only to pile up in the vaults of the Federal Reserve System. Apparently consumers in the United States found it too similar to the quarter and not especially attractive.
The Canadian Mint, which moved back into its rehabilitated castle-like home here in July 1986, decided to learn from the US experience. It also studied the example of Britain, which introduced a 1 coin in 1983 and discontinued its 1 note in 1984.
To curry public acceptance, Canada's new currency was designed to have a pleasant ``fondle factor.'' The coin is sufficiently larger than the quarter to be distinctive; it has 11 sides, enabling even the blind to recognize it easily. And the coin is attractive, with its copper-tin (bronze) aureate coating electroplated onto the nickel planchet before striking.
Canadians seem to like the design, perhaps because many have an affection for the loon, a diving bird that's common in Canada, although it has become fairly rare in the US.
To make certain the coin would do what it was intended to do - replace the paper $1 bill - the government announced at the start that it would withdraw the $1 bill starting and ending in 1989. This has given the vending machine industry an incentive to start converting its machines to accept the coin.
On the other hand, when the US Treasury introduced the Susan B. Anthony, it was silent about its intentions for the $1 bill. So the vending machine industry decided to wait and see about converting equipment, and there was little incentive for the public to make the switch.
Canada also has the advantage of having in wide circulation a $2 bill, so consumers don't have to jump from a $1 bill to a $5 bill in making change.
Because the new dollar coins are expected to last at least 20 years in circulation, far longer than the year or so for paper $1 bills, the new coins will save the government money. It expects to save some $175 million over a period of 20 years in production and distribution costs.
Since the coin costs only 12 cents to make and has a face value of $1, the government should also make a profit, known as ``seignorage.'' That profit, says Cudahy, could amount to $270 million, if the Mint is able to circulate about 600 million of the coins to replace its 300 million $1 bills.
Public-transit companies expect to save $4 million a year by not having to unfold dollar bills put in collection boxes. Vending-machine operators hope to do more business because of the convenience of a $1 coin. Thousands of ``Use It Here'' decals have been placed on converted vending machines.
Though the government apparently is not financially loony in making this biggest change in the Canadian currency in some 50 years, there was some looniness involved in its introduction.
For one thing, the original design featured a traditional ``voyageur'' theme on its reverse side - a portrayal of a white man and an Indian in a fur-laden canoe. But the master dies for this design mysteriously disappeared during a snowstorm last November, when they were transported from Ottawa to the production plant in Winnipeg by a courier company.
The dies have not shown up, despite an intensive search by the Royal Canadian Mounted Police. So for security reasons, the Mint substituted the loon motif.
Mr. Cudahy isn't entirely unhappy with the switch, noting that the loon is common to all of Canada, whereas the voyageurs were something of an eastern Canadian theme.
Another bit of looniness occurred when a Mint mix-up resulted in some of the coins being distributed to the public in the west a week early.
On the whole, however, Mint officials are delighted with the reception to the coin. A public survey shows 65 percent firmly in favor of the coin and another sizable percentage fence-sitting.
Says Mint spokesman Murray Church:``Going loonie has become an in thing.''