how we almost got a new denomination U.S coin (warning: long read)

[yonico]

at the end of the 19th century , a bottle of Coke cost a nickel. It was 5c in 1915 and in 1930.

 

for over 70 years since the first Coke was sold, you could still buy a bottle for the same exact price. Three wars, the Great Depression, hundreds of competitors — none of it made any difference for the price of Coke.

 

Why not, you might ask?

 

In 1899, 2 businessman, Benjamin Thomas and Joseph Whitehead, came to the president of Coca Cola with an offer: they wanted to buy the bottling rights for Coca-Cola and start selling Coke in bottles (at that time, coke was sold at soda fountains only). The president of Coca-Cola took the offer and signed a contract with the men, allowing them to sell Coke in bottles, and agreeing to sell them the syrup to make coke, at a set price for unlimited time, without raising the price on the syrup, ever.

 

bottled coke sales took off like a rocket. now since Coca Cola agreed on a fixed price for life on the syrup, that meant they won't get any extra money once the prices were raised on the bottles. Coca cola wanted the price to stay low at 5c, and the sales volume to stay high. what could they do to achieve that?

 

SMART MARKETING.

 

coca cola bought huge ads on billboards and newspapers, advertising their drink with a price of 5c. any ad they would make, would have the 5c price printed on it, first in small print somewhere near the bottom or sides of the ad:

 

 

 

 

and later plain ads that simply read "DRINK COKE, 5C":

 

 

 

 

coca cola did all they could do to insert the 5c/bottle price into their costumer's brains, and by that ensuring that the price is gonna stay at that.

the stunt worked. probably worked too good; even after the contract with coca cola was revised, and the price of syrup was raised, it was impossible to raise the price of bottled coke.

 

That contract with the bottlers eventually got renegotiated. But the price of Coke stayed at a nickel. That was partly due to another obstacle: the vending machine.

 

there was another reason why Coca Cola couldn't raise the prices: vending machines.

the Coke vending machines were built and programmed to take one coin only: a Nickel. they could have been formatted to take a Dime instead. but that would be DOUBLING the price, and probably be too much for their consumers..

at one point, believe it or not, coca cola implemented a strategy where one in every nine vending machine bottles was empty. The empty bottle was called an "official blank." This meant that, while most nickels inserted in a vending machine would yield cold drinks, one in eight patrons would have to insert a second nickel in order to get a bottle. This effectively raised the price to 5.625 cents. sounds like a small increase, just 0.625 cents per bottle, but considering that coca cola had 400,000+ vending machines installed in late 1940's, the numbers are huge. every million dollars in sales would bring in an extra $125,000!!

 

now getting to the point: still seeking ways to raise the prices, Coca Cola approached the U.S treasury department in 1953 and asked them to mint a 7.5-cent-coin that would be used on their vending machines. there were 2 approaches made: a formal one to the treasury department, and an informal one by the President of Coca Cola, Robert Woodruff, to President Eisenhower, asking for help with the request (they used to hunt together). The requests was considered, but eventually both were refused and rejected.

 

After that, prices of Coke around the U.S rose to 6,7, and then 10 cents a bottle in different states. by 1960, you could not have gotten a coke for 5 cents anywhere in the states.

 

 

[RWB]

There have been many attempts to have coin denominations made that would fill local or industry-specific needs. A century ago, many transit fares rose from 5-cents to 7-cents and the mint was petitioned to make 7-cent coins. There were also calls for 2-1/2 cent coins and a return to the ½-cent. Fifteen-cents was also a popularly-proposed new denomination. During the mid-1930s, several states wanted 5-mil and 1-mil coins (1/2-cent and 1/10-cent) to facilitate state sales tax collection. In 1919 there was a proposal for a 2-1/2 cent coin honoring Teddy Roosevelt. A silver half-dime was proposed along with a 3-cent coin during WW-II. (Designs for the half-dime ended up on the half dollar of 1948.) As late as 1974 the mint tested a 2-1/2 cent coin as a replacement for the cent.

 

Every proposal was backed by testimonials of its necessity and universal utility. Fortunately, every one was discarded as being too local and temporary - unnecessary clutter of the coinage.

[123cents]

What a great post Yonico, Thanks!

[Conder101]

Not sure how effective the Coca-Cola Advertising was in fixating the Coke and 5 cent in our brains. When I think 5 cents and a soft drink I think of Pepsi.

 

Pepsi Cola hits the spot

12 full oz that's a lot

twice as much for a nickel too

Pepsi cola is the drink for you.

 

The jingle was introduced in 1936 and lasted through the late 50's. (And Coke nickel price at the time would only get you a six oz bottle.)

[asdfgh]

In around 1960 when I was 9 I bought a 6c coke (small bottle) from a 6c machine at my dentist

office building. I believe that the cokes and other bottled drinks were about 10c for the tall ones at the local store down from my house. I remember this as I thought it was so cool to save 4 cents. Ha

 

also the cokes had real cane sugar in them.

[RWB]

Coke's big marketing breakthrough was providing them to the soldiers and liberated countries during WW-II.

[johnny9434]

i wonder what would have happened if coke did buy pepsi back in the day. would that be considered a monopoly?