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State Stamp On Penny

I have come across a 1983 penny that has an outline of the state of Connecticut and the initials CT impressed on the obverse. I do not see any ill-effects on the reverse. No pics - can't get the camera to show it clearly.

-How is this put on the coin? Handheld tool or larger machine?
-Is this something people do to see how widely a coin circulates (like a Where's George dollar)?
-Was this a fad in another era?

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