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Congress is taking a look at whether the penny, after 203 years, has outlived its usefulness.

The General Accounting Office, at the request of a House subcommittee chairman, is studying whether most people still want the penny, whether the coin is too expensive to produce and how prices could be rounded in a fair way to the nearest nickel."The inconvenience of the penny may have exceeded the utility of the penny," said Rep. Michael Castle, R-Del., chairman of the monetary policy subcommittee, who requested the study. "At nearly every small business, you see the penny cup at the cash register because nobody wants to carry them."

More pennies are produced annually than any other circulating coin. Of the 19.2 billion circulating coins made in 1994, for example, 70 percent (13.5 billion) were pennies. Dimes were the second most-produced coin with 2.5 billion, along with 1.7 billion quarters, 1.4 billion nickels, and 38 million half dollars.

Scattered throughout the country are an estimated 129 billion pennies, enough for an average of 489 per person. Many consumers, of course, keep more than their share, throwing thousands of pennies each year into drawers, piggy banks or jars until they find a reason to carry them to a bank. Millions more are plunked into reflecting pools and fountains by people making wishes or just for the sport of it.

In 1994 there was so much hoarding of the penny that it caused a temporary shortage in several major cities. Some banks in New York were paying $1.10 for each 100 pennies deposited.

In at least one place in Tennessee, pennies are not a nuisance. They are the livelihood for 300 workers at Zinc Products Co. in Greeneville, which produces 85 percent of the 13.5 billion pennies made a year.

The plant rolls and cuts blank zinc coins, coated in copper, and ships them to the Philadelphia and Denver federal mints for the stamping of Lincoln's face, the Lincoln Memorial and the inscriptions. More than 60,000 coins a minute can roll off the assembly line, said plant vice president Ed Pejsa.

U.S. Mint officials and the penny plant's managers say there are many reasons for keeping the penny but the two main reasons are tradition and profit.

The penny has been in circulation since 1793 and was part of the country's original monetary system. A recent national poll, commissioned by the zinc industry, showed that 76 percent of adults oppose eliminating the penny.

The Mint reports that annual revenues from new penny sales are $40 million over its production costs. Mint officials say that each penny costs seven-tenths of a cent for raw materials, production and distribution; the three-tenths of a cent extra is profit. The surplus helps reduce the agency's budget needs, thereby reducing the federal deficit.

Castle, however, said he wants to take a close look at overhead costs for the penny to determine if the Mint really makes a profit.

Pejsa of Zinc Products said the penny has been a bargain since 1982, costing the same to make today as it did then due to continuing efficiency. He predicts that a full study of the economics of the penny will support keeping it.

Other reasons often cited for keeping the penny: some major charities' fund drives that depend on penny donations, bookkeeping systems depend on exact price amounts rather than rounding, millions of cash registers are programmed to deal with pennies, state revenue departments depend on the penny to collect sales taxes.

"I think there is a definite attachment to the penny," Pejsa said. "The penny is the thing that all kids use to count with. They use pennies to buy gum at the store. You check the depth of the tread of tires with it."

In polls, many senior citizens support the penny. Tom Otwell of the American Association of Retired Persons said that may be because many elderly associate the penny with pleasant memories.

"There was penny candy," Otwell said, "and the penny arcade (games one could play for only a penny), playing gin rummy at a penny a point, (the expression:) `A penny saved is a penny earned,' pitching pennies, returning empty Coke bottles for two pennies ...."

By contrast, Castle said that in his travels, he has heard much grumbling about the penny. "Ninety percent were opposed to the penny everyplace I went. They just don't see it as being necessary. They see it as being an inconvenience."

Some large retail chains have complained about the time and expense involved in counting, rolling and banking pennies.

Another issue, Castle said, is whether 70 percent of the U.S. Mint's circulating coin operations should be tied up with the penny. The mint generates higher net profits from its other coins.

Each nickel, for example, costs 2.9 cents to make, leaving a 2.1 cent profit compared to a three-tenths of a cent profit per penny. Each dime costs 1.37 cents to make; each quarter represents 3.2 cents of labor and materials.

Castle said he has not prejudged the future of the penny and is waiting for the GAO's report. Any change in the status of the penny will come only after much congressional and national debate, he added.

In 1990, the last time the GAO studied the penny, the agency found "demand for the penny remains high. The public is skeptical about the effects, particularly on the poor, of rounding retail cash transactions to the nearest five cents. The penny ... is considered by some to be a nuisance, (but) we found no compelling reason to eliminate ... the penny."

Even if the penny survives its latest review, it may have seen its peak use.

Debit cards, which allow easy purchases from checking accounts without a check or ID card, can be used at increasing numbers of retail businesses, from gas stations to department stores. Some grocery store chains allow debit card users to receive up to $50 cash in addition to their purchase amount, avoiding the need to use an ATM.

"Debit cards will eventually have an effect on coin demand," Pejsa said, so the company is looking to overseas markets for growth in sales of its non-coin zinc products, such as batteries, automobile fuses and flashing.