In today’s fast-paced world of business transactions, serious coin collectors, dealers, and investors realize the necessity of having communication methods that all parties can understand and rely upon. Over the years, the most crucial element of that need has morphed into what today’s collectors might call specialized coin grading (essentially the province of several professional services).
Grading Origins
Like many other areas of numismatic jargon, grading has unique terms and standards that are apt to vary from time to time. Knowing as much as possible about all the variables is essential to successfully competing in any endeavor involving the attractiveness, quality, and value of whatever is being graded. Differences of opinion in these matters are due to the fact that they are still subjective to a large degree. Untold books, articles, and dissertations have been published over the years in an effort to codify or standardize the terms and descriptions of what various grades of wear or perfection look like on different types of coins and how they can be recognized.
In 18th-century America, collecting coins for amusement was merely an idle pastime for those who could afford it and were interested in preserving, studying, and learning about whatever was of interest to them. A curio cabinet of interesting coins at home was a novelty intended to entertain and impress visitors. The condition of specimens mostly depended on whatever was available to the collector through finding, trading, or purchasing coins at auction.
Grading Evolution & Confusion
Grading at that time was generally based on the three tiers that professional archaeologists used: Good, Fine, and New. Even today, that system works very well in determining what, where, when, or how buried coins were being used or preserved. It is a classification of evaluation without regard for their commercial value. Frankly, the only need to be more specific about physical wear on a coin is to help determine what something might be worth in the marketplace.
Thus, if grade and price are equal factors in establishing a coin’s value, then price and grade should theoretically be equal. But that does not seem to work in the real world today. Auction houses sell rare or exceptional coins at public auction, where competitive bidding determines the price that an eager bidder is willing to pay. But that might be only a one-time occurrence. In many cases, two identical coins may bring entirely different prices in the same auction, leaving no clue as to which should be considered the precise valuation.
The need for unified industry grading standards arose with the age of a new generation of coin collectors.
Standardizing Grading
The need for unified industry grading standards arose with the age of a new generation of coin collectors. This group was becoming accustomed to relying on pricing information that was available through magazine advertisements, auction results, and in specialized publications like the Wayte Raymond catalogs, Brown and Dunn, and Whitman’s Red and Blue Books. In 1948 large cent specialist William S. Sheldon attempted to standardize grades using a 70-point scale that equated wear and commercial value. Unfortunately, it was a system that worked only as long as each factor remained constant.
In 1978 a group of like-minded dealers and collectors collaborated to produce the Official Grading System for United States Coins, which detailed descriptions of the amount of physical wear and other qualities for all types of United States coins. Since then, even more finite descriptions have been established and used by specialists and individual professional grading services to provide collectors with clear descriptions of what to expect in their evaluations of grades.
Conclusion
Will these systems continue improving, changing, or becoming even more finite? Probably so. With the aid of mechanical and/or artificial intelligence applications, this seems inevitable and likely to improve communications between collectors, investors, casual hobbyists, and the numismatic industry. We live in exciting times and will all benefit from the continuing improvement of grading.