I continue my commentary on A Guide Book of United States Coins, the familiar red-covered reference first marketed in 1946 (cover date of 1947 to preserve shelf life). Now it is in its 68th edition, with a cover date of 2015.
For many years I have maintained that by simply reading the text in the Guide Book a tremendous amount can be learned about American coinage. Most owners of the book look at mintages and prices, but the comments, especially in the front of the book, are very informative. This week I pick up with page 10, “Third Party Grading and Authentication.” The text relates that in a long period of years over 100 different commercial coin-grading services have come and gone. Today the leading firms are the Professional Coin Grading Service (PCGS) founded in 1986 and located in Newport Beach, California, and the Numismatic Guaranty Corporation (NGC), founded in 1987 in Sarasota, Florida. Each receives coins submitted directly or through dealers, evaluates them, and assigns a numerical grade. Sometimes other designations are given such as “Cameo,” a star, a plus mark, and so on. Many of these marks are relatively new and can be misleading, as coins graded years earlier before such were added can be just as nice.
In my opinion, numerical grade is important, but equally or more important are considerations such as the sharpness of strike and eye appeal. Sharpness of strike is used for just a few American series. Jefferson nickels with six complete steps on Monticello on the reverse are called “FS” for Full Steps. However, in practice you can see under magnification that on certain coins some of the steps are not complete. In any event, the steps can be sharp but on the obverse there could be weakness in Jefferson’s hair. This points out the desirability of looking at the entire coin, not just a particular point of observation.
Mercury dimes are designated as “FB” for Full Bands, if the bands on the reverse are separated. Again, this can be misleading as sometimes the bands are separated just slightly and other times the bands are full on the reverse, but the date or some other feature on the obverse might be reverse.
Standing Liberty quarters are given the designation “FH” for Full Head, if the head of Miss Liberty is nearly full. As a practical rule, the only coin in that entire series that consistently comes with a full head is the 1917 Type I. Most others, including nearly all of the Type II quarters, lack some sharpness of the head. Further complicating matters, a coin can be designated FH but have the rivets on the shield weak or missing.
Franklin half dollars are designated “FBL” in some instances for Full Bell Lines on the reverse.
Other series are not designated with sharpness at all. This leaves room for connoisseurs to select sharply struck pieces and pay no particular premium for them! An outstanding example is the 1926-D Buffalo nickel, the reverse of which is usually poorly struck. There are some sharply-struck exceptions, quite rare, and these cost no more when found. Circulation strike Barber half dollars from 1892 to 1915 are usually weak on the right side of the reverse, where the eagle’s wings meet the shield and also the talons of the eagle. Again, grading services do not recognize this, leaving an opportunity for buyers. Among Morgan silver dollars 1878 onward, as a general rule many of the New Orleans Mint coins are weakly struck in areas, particularly the center of the reverse, while San Francisco Mint coins are usually sharp.
Further concerning certification services, page 10 of the Guide Book states this:
“Professional grading strives to be completely objective, but coins are graded by humans and not computers. This introduces a subjective element of art as opposed to science. A coin’s grade, even if certified by a leading TPG, can be questioned by any collector or dealer — or even by the service that graded it, if resubmitted for a second look. Furthermore, within a given grade, a keen observer will find coins that are low quality, average and high-quality for that grade. Such factors as luster, color, strength of strike, and overall eye appeal can make, for example, one MS-65 1891 Morgan dollar more visually attractive than another with the same grade. This gives the smart collector the opportunity to ‘cherrypick,’ or examine multiple slabbed coins and select the highest-quality coin for the desired grade. This process builds a better collection than simply accepting a TPG’s assigned grades, and is summed up in the guidance of “Buy the coin, not the slab.” (Also note that a coin certified as, for example, MS-64 might have greater eye appeal — and therefore be more desirable to a greater number of collectors — than a less attractive coin graded MS-65.)
“Over the years, collectors have observed a trend nicknamed ‘gradeflation’; the reinterpretation, in practice, of the standards applied to a given grade over time. For example, a coin evaluated by a leading TPG in 1992 as MS-64 might be graded today as MS-65 or even MS-66.”
After reading the preceding, you might wonder about the true value of third-party grading. The answer is that it is of great value for several aspects. First, PCGS and NGC guarantee the coins they have graded are genuine. This protection is not offered widely elsewhere, including on the Internet, although many experts (such as members of the Professional Numismatists Guild do). This alone is a positive protection.
Also, prior to certified grading, one dealer might call a coin MS-61, another dealer might call the same coin AU-55, and still another might call it MS-63. While PCGS and NGC grades are not necessarily consistent at any given time or over a period of time, as noted in the Guide Book, they are valuable in a relative sense. A coin graded MS-66 is nearly always nicer than one graded MS-64 in the same time frame. As mentioned in the Guide Book as well, the system can be gamed, so to speak, in a very favorable way, by cherrypicking for quality. D. Brent Pogue, for example, spent many years examining thousands of coins, selecting relatively few that met his high standards. The same can be said for the late John J. Pittman and others. Now, you can go and do likewise!
