C&L and their sub-contractor, Opinion Research Corporation, conducted a telephone survey from March 17-30, 1997. A total of 2032 persons age 18 and older participated in the survey. The large sample size was selected to provide a 98 percent confidence interval (many polls sample in the 1000 size range, yielding only a 95 percent confidence interval) and to provide statistically valid subsets of important demographic groups.

Each telephone interview lasted about 12 minutes. Questions were structured around these general topics:

• Recollection and saving patterns for Bicentennial quarters.
• Overall impression of the Statehood quarters concept and their reasons for liking or disliking the idea.
• The design submission and selection processes and topics for designs.
• Likelihood, extent and reasons for saving Statehood quarters.
  
  

Data for the sample group was tabulated, and provided the basis for assessing likely public acceptance of statehood quarters across the entire population. The survey also shed light on anticipated collection rates and demand for the statehood quarters.

The results of the telephone survey indicated that 51 percent of the respondents had a favorable impression of the statehood quarters concept; 38 percent didn't care one way or the other; only 11 percent thought it was a lousy idea. The survey indicated greater acceptance from younger people, households with children, self-identified coin collectors, and those who remembered the Bicentennial coins. Results by income level did not vary. The results of the telephone survey question regarding overall impression of the program are presented here:

Results based on telephone interviews with 2032 adults, from March 17-30, 1997.

The interviewers asked respondents about why they thought statehood quarters were a good or bad idea. Responses followed these basic themes:

Positive Themes:

• State pride / Nice Way to Honor Each State.
• Nice Collectible for Self, Others, Children, or Grandchildren.
• Historical, Heritage, or Educational Significance.
• Time for a Change / Unique Concept / "Just a Neat Idea".
• Stimulates Interest in Coin Collecting.
  
  

Negative Themes:

• Concern Over Cost of Program.
• Government has better things to do.
• Too confusing / Too many designs.
• Like coins they way they are / No need to change.
  
  

To dig deeper for opinions, focus group sessions were held in six geographically diverse cities from April 7-16, 1997. Each two-hour session consisted of 9-12 residents of the city. Two sessions per city were held.

The cities selected:

• Boston, MA
• Raleigh, NC
• Seattle, WA
• Dallas, TX
• Toronto
• Edmonton
  
  

The Canadian cities were included to learn about actual impression of the Canada 125 Circulating Quarter Project.

Because the sample size of the focus groups was small, the percentages were statistically invalid, but they provided a good platform for attaching opinions to the quantitative data gathered from the phone surveys.

Positive Remarks from focus group participants centered around the basic themes heard during the phone interviews:

"I think it's great. I imagine little kids trading. You know, I'll give you a Rhode Island for a Texas or something. I think the educational value is great."

"I think it teaches us about U.S. history. Some people, you know, who do not know what year all the states were admitted. They get to know which one came in what order."

"I like the idea of change. The United States in one of the few counties that hasn't changed its coin or currency to keep pace with the modern world. At the same time, I think it's a neat idea having the charm of the individual histories of the Sates in some way on the coins. I kind of like that."

"I have children, one's middle school age and one is elementary school age. I think they would be very interested in looking through all the change anyone's got to see different ones. And I think it would be of great interest for school age children."

The negative comments verbalized during focus group sessions centered in two areas. Participants wanted to know why the Government was proposing this program and worried about the potential cost. Here are a few specific opinions:

"I was going to ask you why the Government wants to do it. Just to encourage collection of these? Because why should the Government go to the added expense of minting and designing these quarters? I just want to keep Government costs down. Quarters are quarters."

"I think they could spend their time doing something more important"

"What's the motivation behind it?"

The data and opinions indicated that the statehood quarters program would enjoy wide public acceptance, but the undercurrent of skepticism should not be ignored, C&L warned. Many focus group participants asked if the new quarters had anything to to with the new millennium, or if there was some hidden purpose for starting the program in 1999. What was clear, too, was that many participants did not realize that the statehood quarters program stood a good chance to actually net positive income for the government, and be no burden to the taxpayer.

C&L concluded that should the government decide to proceed forward with the statehood quarters program, a clear and decisive public awareness campaign ought to accompany the implementation of the program, to inform the people of the true nature, purpose, and cost of the statehood quarters.

In retrospect, the positives heavily outweighed the negatives. The public enthusiastically welcomed the State Quarters. Everybody knew somebody who was forming a set, anxiously awaiting the next state release. Billions of the coins were plucked out of circulation by interested collectors. Almost 35 billion State Quarters were minted over the 10 year period, which was far above the quantity needed for everyday commerce over the same time frame. So successful (and profitable) was the 50 State Quarter program that it was continued into 2009 to similarly honor the District of Columbia and United States territories. Legislation was passed to institute a program in 2010 to depict national sites on the reverse of the quarter, modeled after the State Quarters.

Respondents to the telephone interviews were also asked about their interest level in setting aside statehood quarters. About 54 percent indicated there was at least a good possibility in saving the coins. Another 20 percent expressed a fair level of interest in collecting the coins. Only 25 percent said there would be little or no chance that they would save the coins. One percent didn't know what to think.

If these numbers were projected out toward the entire US population, at least 100 million people would be setting aside statehood quarters as keepsakes. According to Mint Director's 2004 report, the number of State Quarter collectors approximated 130 million.

Of the 74 percent of the respondents who showed at least some interest in collecting the quarters, about two-thirds of them envisioned themselves collecting full sets of state quarters instead of individual coins. Of this sub-group, the average anticipated collection rate was 7.8 sets per person (50 coins in a set). This anticipated collection rate is consistent to the known collection rate for the 1975-1976 Bicentennial quarters. The telephone survey discovered that approximately 34 percent of the American adult public is still keeping an average of 27.5 of the Bicentennial quarters.

C&L employed a series of complex analyses to factor the future coin demand attributable to the statehood quarter program, based on actual responses from telephone interviews, accepted assumptions, population extrapolations, number of anticipated coins saved per person, etc. Thus in 1997, C&L drew the following conclusion regarding the 10-year statehood quarter initiative:

The demand for general circulation statehood quarters by collectors during the life of the program could go as high as 25.3 billion coins.

This is the number of quarters above and beyond those produced to meet the commercial needs of the nation. Said another way, the prediction in 1997 was that as many as 25.3 billion statehood quarters would disappear into the pockets of approving collectors, mostly never to be seen again. To put this somewhat in perspective, "only" 14.7 billion circulation quarters were minted in the 10 year period from 1989-1998.

So how accurate was this projection? We'll delve into that question in the section below.

The Treasury earns a profit for most coin types minted and placed into circulation, the most notable exception being the one cent penny. This is because a coin has a manufacturing cost less than its face value, but it is "sold" at full face value to the Federal Reserve Bank for eventual release into circulation. The governmental income derived from the difference between the cost of producing a coin and its face value is called "seigniorage."

The seigniorage profit for quarters at the beginning of the state quarter program was about 20.5 cents per coin. Rising costs, such as metal prices and transportation, reduced seigniorage profits to approximately 14 cents per coin by 2008.

Increasing production and payout of quarters to the Federal Reserve Bank generates additional seigniorage. C&L reasoned that if the statehood quarters program were implemented and proved to be popular with collectors, increased demand for quarters would be realized, resulting in greater seigniorage revenue for the government. The prediction was that the program would net the Treasury anywhere from an extra $2.6 billion to $5.1 billion because of seigniorage. If the prediction of 25.3 billion coins demanded by State Quarter collectors materialized (see section above), then the seigniorage profit earned would be toward the higher end of this range.

Some collectors buy State Quarters by 100-coin bags. The bag shown above will net the government a little over $20 in seigniorage profits. United States Mint image.

By late 2008, all 50 of the State Quarter designs had been released. The cumulative mintage of State Quarters entering circulation over the 10 year program was about 35 billion coins.

According to government reports, the seigniorage profits earned during the State Quarter program was a little under $6 billion, but these reports include the seigniorage raked in for every quarter sent to the Federal Reserve, not just the quarters saved by collectors. No Mint report estimating the seigniorage attributable strictly to State Quarter collectors has been published.

Let's do some guessing ourselves. The Mint estimated that around 130 million people are collecting statehood quarters to some degree. If, let's say, 40% of the 35 billion quarters were taken out of circulation for collecting purposes, the seigniorage profits would come in around $2.5 to $3 billion, which is toward the lower end of C&L's expectations. Still, not bad, for estimating financial events into the far distant future.

The Treasury also earns income through the sale of mint and proof sets to coin collectors. Proof sets featuring exclusively State Quarters were marketed to the public and brought in millions of dollars. The Mint describes these as "numismatic sales" in their annual reports, but these gains were minimal compared to seigniorage profits.

One section of the C&L study sought to determine if the Mint could meet production demand for statehood quarters in addition to regular economic requirements for twenty-five cent coins.

The Denver and Philadelphia Mints are the most prolific coin producing facilities in the world. Billions of coins are struck every year. United States Mint image.

The approach to assessing whether sufficient manufacturing capacity existed to support projected overall demand included the following factors:

• -- Document existing capabilities.
  -- Identify planned manufacturing upgrades.
  -- Assess future capacity.
  -- Estimate incremental demand.
  -- Identify potential bottlenecks.
  

The conclusion drawn was that the Mint would be capable of producing enough quarters to meet the most realistic demand scenarios. Planned capital equipment purchases totaling $32 million was deemed sufficient to expand manufacturing capacity.

Additional capacity to handle greater than expected demand could be attained by investing $35 million in new production lines in the Philadelphia and Denver minting facilities. Contingency plans to meet temporary, unexpected spikes in demand involved conversion of penny presses to quarter production, overtime, and use of existing Washington/Eagle quarter stockpiles.

Bottom Line: C&L believed the Mint would have not trouble in meeting statehood quarter demand. This indeed proved to be true. There were no production shortages during the decade of State Quarters.

On May 30, 1997, Coopers & Lybrand sent their statehood quarter feasibility report to Treasury Secretary Robert Rubin. As required by the United States Commemorative Coin Act of 1996, the study accomplished all the following:

• Assess likely public acceptance of and consumer demand for the different coins which may be issued under the program taking into account the length of the program.
• Compare the costs of producing the Statehood coins and the revenue that the program would generate.
• Assess the impact on coin production and distribution systems.
• Candidate designs will then be sent to the Treasury Secretary for his review and approval.
• Document the advantages and disadvantages of different approaches to selecting designs for coins in such a program.
• Note other factors which the Secretary may consider appropriate in deciding upon the feasibility of the program.
  
  

To make space on the reverse side to accommodate the state design, the words "United States of America", "Quarter Dollar," "Liberty," and "In God We Trust" would have to be moved to the obverse side.

C&L did not make a recommendation whether to proceed with the statehood quarter program. Their job was to provide research data to the Secretary. The 1996 law dictated the sole responsibility for an up-or-down decision rested with the Secretary. However, the overall tone of the report was positive, in that most of the data indicated a statehood quarter initiative was indeed viable.

The same law required the Secretary to make a decision by August 1, 1997. After evaluating the data, Secretary Rubin elected to proceed forward with the statehood quarter program. The next step was to go back to Capitol Hill, where one final Act of Congress was required to set the machinery of government moving. As they say, the rest is history.

If you're interested in picking up the story of the statehood quarters from this point onward, we recommend you go to our "How it All Got Started" section.