U.S. Mint director Donna Pope seems to think that the popularity of the dollar bill justifies its continued existence {"Coins Out, Paper In," Free for All, July 21}. But the need for a $1 coin should be evaluated in terms of governmental savings, private-sector savings and consumer convenience.

Coins last 30 years and cost 6 cents to make; $1 bills last 17 months and cost 2.6 cents to make. The Government Accounting Office estimates that the durability of the $1 coin would mean an annual savings of $318 million.

In the private sector, vending machine and amusement operators spend between $400 and $600 for bill acceptors, instead of the $40 it would cost for mechanisms that would accept $1 coins. Invariably costs are passed on to consumers.

Another problem for vendors is that no machine currently manufactured will give dollar bills in change. The only way to make change is with handfuls of quarters. Witness Metro's farecard machine.

In fact, handfuls of quarters are what are needed at coin laundries, long-term parking meters, highway toll booths, Sunday newspapers from street racks and for long-distance calls at pay phones. Bill acceptors are not an option for these machines.

Dollar bills cause continual inconvenience and cost. For example, every day workers in the cash room of the Chicago Transit Authority must straighten out 300,000 $1 bills, an operation that costs $2 million annually. Many transit systems spend about three cents to count a $1 bill; coins can be counted for a fraction of that cost.

As the GAO and the Mint have pointed out, the $1 bill would have to be removed in order for the $1 coin to succeed. But the option of a $2 bill hasn't been considered. With a $2 bill in circulation, a $1 coin would be needed in less than half of all transactions versus an average of two $1 bills under the current system. A $2 bill does not circulate now only because there is no room for it in cash drawers. That would change with the introduction of the $1 coin.

Pope was right about high-denomination coins being unpopular when they have been introduced in most foreign countries. But she failed to mention that the public soon discovers the convenience of a coin -- that is why no country has found it necessary to reverse its decision and return to paper.

The administration should note that it takes the taxes from 75,000 tax returns each year to pay for the $318 million luxury of $1 bills. Evidently, it finds it easier to raise taxes than to issue a $1 coin. -- James C. Benfield The writer is the executive director of the Coin Coalition.