Volume 50 Federal Register 28679-81 (July, 15, 1985)
Agency: United States Mint, Treasury
Action: Final Statement of Treasury Policy Regarding the Use of Metal Tokens
SUMMARY: The United States Mint, Department of Treasury announces its final statement of policy regarding the use of metal tokens. The Mint has historically been opposed to the production and use of metal tokens because of its concern that widespread use of tokens would lead to their circulation in the community as coinage in violation of the criminal code. Exceptions to this opposition have been granted by the Mint for the use of tokens by gambling casinos on a case- by-case basis.
On September 2, 1983, the Mint notified the public that it was proposing to change its policy of opposition to metal tokens provided that certain enumerated criteria were met. See 48 FR 40054. Public comment was invited and received. The commenters endorsed the concept of the restrictions and advocated expanding them to insure against the unlawful use of tokens in vending machines and other coin operated devices. On June 21, 1984, the Mint published revised token restrictions which generally adopted the increased restrictions advocated by the commenters. See 49 FR 2556. Public comment was again invited and received. Having analyzed these comments the Department now issues its final policy statement on the use of metal tokens. The present policy statement retains certain of the restrictions while deleting others. The final statement is aimed at providing the necessary guidance to the public to insure the protection of U.S. coinage while minimizing the adverse impact of the restrictions on legitimate users of tokens.
EFFECTIVE DATE. This policy will be effective on July 15, 1985.
Kenneth B. Gubin, Legal Counsel, United States Mint, Room 1032 Warner Building, 501 13th St. N.W., Washington, D.C. 20220
Before discussing the specific comments to the previous notice, a preliminary point must be clarified. The policy which is reflected in the notice which is published today is intended for the advice and guidance of token manufacturers and users as well as the public generally. It represents the views of the Department of Treasury concerning measures which, if implemented, should minimize the possibility of a violation of the counterfeiting provisions of title 18, United States Code. This statement of policy does not prescribe mandatory specifications concerning the size, composition or other requirements for metal tokens. These matters may be the subject of state or local regulation. Rather, this notice simply informs the public, especially those who are in the business of manufacturing or using tokens, that as a general rule, the Department does not object to tokens which meet the restrictions which are set forth out in this notice. The prosecution of violations of the counterfeiting statutes is vested with the Department of Justice which will assess each claimed violation on the particular facts presented.
Approximately 36 comments were received. Commenters expressed strong opposition to several of the restrictions. First, a number of commenters were opposed to the requirements that tokens contain 1) the name and location of the establishment from which they originate on at least one side and 2) language limiting redemption of the tokens to the issuing establishment. Commenters pointed out that requiring this information adds significantly to the costs of the tokens. While large business concerns are able to absorb these costs, it is asserted that smaller business establishments which have been using a generic token without this identifying information will be unable to afford the increased costs. It is emphatically urged that these requirements be abandoned.
The Department recognizes that the identification requirements may impose significant costs upon the token user. These requirements derive from conditions that were originally placed upon casinos which were more able to absorb the costs. Their purpose is to facilitate the determination of the source of a potential violation so that appropriate remedial action may be taken. The Department believes that this goal will be attained provided that tokens contain some mark which clearly identifies the manufacturer. Accordingly, we have modified the restrictions to allow for the use of manufacturer’s identifying mark or logo in place of the name of the originating establishment.
By far the most vehement opposition to the restrictions was concerned with the prohibition of certain diameter ranges for metal tokens. It was pointed out that under the most recently proposed restrictions, one of the most commonly used tokens, which is .900 inch in diameter, would be prohibited. In addition, other size tokens would be likewise not in compliance with the diameter specifications. It was pointed out that there are millions of such tokens in use throughout the United States. Commenters urged that the increased restrictions on token size were simply not necessary to achieve the Department’s purpose of safeguarding against the slugging of vending machines. Moreover, commenters wished to know what mechanism would be specified for the replacement of these tokens.
The restriction on the diameter of metal tokens is the most essential means of minimizing the possibility that tokens will be unlawfully used to slug vending and other gaming machines. In view of the impact that the prohibition of a .900 inch token would have on token users throughout the United States, however, the Department has carefully reexamined its restrictions and has determined that its policy goals will be met by narrowing the prohibited ranges for these “quarter-sized” tokens to .910 -.980. This range is large enough to exclude most tokens which could find their way into vending machines without excluding the popular .900 token.
Other diameter ranges have been likewise modified to allow for the continued existence of tokens which have not posed significant problems under the slugging statute.
Commenters objected to the minimum weight and thickness restrictions embodied in our previous policy statement. It is asserted that there is no reason for such restrictions since a lighter weight and thinner tokens will more easily be rejected by the coin mechanisms. The Department has determined that the restrictions on minimum weight and thickness for tokens are not necessary in view of the protection afforded by the restrictions on token diameters. Accordingly, these restrictions have been eliminated.
A number of commenters objected to the requirements concerning the composition of the tokens, especially to the requirement that tokens which are composed of a copper based material contain no more than twenty-five percent of alloying materials. In addition, commenters object to the requirement that tokens not be composed of a ferromagnetic material.
The Department has determined that the restrictions on the amount of alloying material for copper based tokens serves the purpose of providing added assurance that such tokens will not be unlawfully used instead of U.S. coinage in vending machines. Accordingly, the restriction has been retained. The restriction has been modified, however, to require that the amount of alloying material be at least 20 percent of the token’s weight. The Department believes that this modification will provide the necessary protection against slugging while minimizing its adverse impact on legitimate token users. With regard to the prohibition against ferromagnetic material, this provision has been modified to require only that tokens not be composed of material the magnetic properties of which will result in their being accepted by vending machines. This change will not restrict tokens whose magnetic properties are so slight that they should not be accepted by the coin mechanism.
Conditions for Department Approval
The Department does not oppose the production or use of tokens which meet the following conditions:
- Tokens should be clearly identified with the name and location of the establishment from they originate on at least one side. Alternatively, tokens should contain an identifying mark or logo which clearly indicates the identity of the manufacturer.
- Tokens should not be within the following diameter ranges (inches):
- Tokens shall not be manufactured from a three layered material consisting of a copper nickel alloy clad on both sides of a pure core, nor from a copper based material except if the total of zinc, nickel, aluminum, magnesium, and other alloying materials is at least 20 percent of the token’s weight. In addition, tokens shall not be manufactured from material which possesses sufficient magnetic properties so as to be accepted by a coin mechanism.
- Establishments using these tokens shall prominently and conspicuously post signs on their premises notifying patrons that federal law prohibits the use of such tokens outside the premises for any monetary purpose whatever.
- The issuing establishments shall not accept tokens as payment for any goods or services offered by such establishment with the exception of the specific use for which the tokens were designed.
- The design on the token shall not resemble any current or past foreign or U.S. coinage.
The Department of Treasury believes that the observance of these restrictions will minimize the possibility of a violation of the counterfeiting statutes. The prosecution of violations of these statutes is vested with the Department of Justice which must evaluate any claimed violation on the particular facts presented.
Katherine D. Ortega
Treasurer of the United States
[FR Doc. 85-16519 Filed 7-12-85; 8:45 a.m.]
Billing Code 4810-37-M