Grading Standards in Question
I would like to thank you for all the life time of work you have put into the hobby I find to be the most rewarding aspect of my leisure time life. Individuals like yourself give the hobbyist a great wealth of information and make our lives a little bit easier when navigating the sometimes treacherous waters of those who would rather scam the public than make an honest living like most of us.
At first, I did not believe that there was the need for slabbing companies to tell me if a coin was a joy to behold. As I got deeper into the hobby, I found that it does make life better and easier for us in that I can bid or buy a coin from certain slabbing companies and know what to expect-sight unseen. But, as you know, just as there are problems in the hobby, mostly focused on the Chinese forgeries making their way into the market, I think that there are certain slabbing companies doing just as much harm to the hobby as the counterfeiters of the world.
I have noticed that for the most part that only three or four certification companies out there are consistent with their evaluation of the coins they grade. Some have higher standards and they command a premium for their coins at auction. But, the others, they grade coins with only one thought in mind: to fool the hobby and reward those who use them to misrepresent a coin for no other reason than to sell and make a profit for more than what it probably would have realized if left raw or in a slab with the true condition of the coin.
Some of these slabbed coins are so far from the truth that if it were a practice in any other industry it would be the subject of a government recall or in court, claims of fraudulent advertising or misrepresentation of a product and/or its performance. I know it is somewhat subjective, and grading is up to the individuals doing the grading to interpret to the best of their ability, but what some of these slabbers are doing is criminal.
Why does someone not take them to task? A class action suit by the standard bearers or the ANA, for example, would do much to improve the hobby as a whole as they attempt to make profits at the expense of others. I realize that competition is the American way, but these other companies exist for one purpose only, to fool the collector who knows what that coin should look like from the grading books and the standards set by the more conscientious grading companies. New graders could be given a grace period until they establish a track record or they show that overgrading is the main reason they are in business. In addition, besides a grade, the true state of the coin is also left off the slab-like cleaned down to the point that the minting characteristics used to authenticate a coin have been removed and the like.
I am well aware of “buyer beware”, however there are standards in place and just like gas mileage stickers on a car, the public expects the claims to be within reason and based on the 70 point grading system established by Mr. Sheldon! Otherwise, we are going to see our pocket change in slabs claiming it to be flawless if this is to continue.
My second question is not as negative. While I am not now nor never have been in the coin hobby professionally, I would like to do so as it is a true pleasure to be able to work in a field that you look forward to getting up and “going to the office.” I have been collecting since I was 10 years old and am ready to retire. I know enough to carry on a decent conversation, and read most every article I get my hands on.
To my dismay the young people at shows and even some sellers have no interest in coins other than it makes them a living or “it’s a job.” I am surprised when I get that answer and have spent hours talking to the sellers who call me on the phone to sell me the “deal of a lifetime,” and know nothing about what they are even selling. They come away realizing that they need a better approach if they are going to sell a true collector the deal of the day.
I never miss an opportunity to educate someone when given a chance. I am accomplished in my field of work professionally and am known for high standards and success by more people than I was even aware of from all parts of the USA, but have nothing on my resume which would open eyes in the numismatic world except a strong work ethic and a quick study at anything I put an effort towards completing. If these young kids can get into the field having no interest or love of the hobby, I think it only stands to reason that I should be able to achieve that goal.
Any suggestions? Thank you for your time. I know you are swamped with your day-to-day activities, but I do hope to hear from you.
Thank you so much for your very interesting e-mail. The problem with coin grading “standards” is that there are multiple factors that make up the grade of a coin, and not everyone agrees to them.
It is impossible to write a fixed set of coin grading standards by which someone with scientific knowledge or good methodology can take a book, a set of pictures, or anything else and precisely grade a coin at, say, MS-63, then ship it to five other people and have them also call it MS-63. This is the nature of the beast, so to speak. In other words, grading is not scientific. The actions of one user of a set of grading guidelines are not replicable by another user. Period.
The problem is that numbers impart a scientific aura. If instead, as in the field of old books, one simply had a “mint” copy, extremely fine, fine, and a “reading copy” (damaged, but still readable), it would be simpler. But even then there would be differences of opinion.
There are no grading standards at all in certain areas such as paintings, prints, and the like. Automobiles have a “point” system for restoration; again without everyone agreeing, and nothing much at all for unrestored automobiles.
Time was when coins were simply Uncirculated (Mint State) or they were not, with Uncirculated not being divided into 11 different categories, as it is now. A Proof was a Proof, not a Proof-61, or 63, or 68. Check Stack’s catalogs from the 1930s or 1940s, or any other catalogs or advertisements, and you will see this immediately.
In this old-time era, a few patient collectors kept looking for, say, Proofs that had hardly any hairlines or none at all, and others didn’t care. The hobby was enjoyable to everyone involved, as collectors collected and dealers dealt.
I do not know what the answer is to the future of grading. Interpretations are looser today than in 1986 when PCGS started in business and in 1987 when NGC started. If you want a sharp dose of reality, get a population report from either of these services from, say, 1992, and see how many Morgan dollars, commemoratives, and other coins are graded above MS-65. Today, higher graded coins are common, because what used to be called MS-65 is now often graded as 66 or 67. Again, no scientific methodology here.
Coin World had a feature article on a particular 1804 silver dollar, the Amon Carter coin, that a particular grading service called EF-45, and later the same service graded it 13 points higher, or 58. Once more, no science here!
There are many scientific aspects to coins, such as measuring the weight and diameter, which will be the same if determined in Lake Forest, Illinois, or in Calabasas, California, or in Milo, Maine. The composition is also a scientific aspect, and the alloy, if subjected to scientific tests, will be determined identically in New York, Paris, or Singapore.
By way of analogy, consider a new automobile being offered for sale. Determining the weight and measurements are scientific, but as to the “grading” of gas mileage, if the window sticker says 22 miles per hour, this has a lot of “buts.” However, the same car might well perform differently with a full passenger load or with a light one, or if on an Interstate as opposed to prowling around twisting roads in the Rocky Mountains.
Mrs. R. Henry Norweb could look at a coin and make her own decision as to whether it was high quality, low quality, or medium quality, and what the value should be. The same was true of John Pittman, the Garrett family in their time, and so on. In recent times, everyone wants the “work” done for him or her. Rather than learn about grading they want to depend upon the certification services.
With regard to your second question, people collect for different reasons. Some are interested only in turning a profit. Others are more interested in the history, but like the comfort of hoping that their coins, when sold someday, will maintain their value or show a profit.
In my opinion, the more that could be told about a coin, the more interesting the coin is. Among my favorite coins are the 1909 V.D.B. Lincoln cent and the 1883 Liberty Head nickel Without CENTS. Both of these are common and inexpensive, but for both I could stand on the proverbial soapbox and talk about them for a half hour. On the other hand, I could not do this for a 1935 Lincoln cent, for example, or a 1902 Liberty Head nickel. Not all coins are interesting, but continuing the Lincoln cent and Liberty Head nickel example, one of each date is necessary to complete a collection. Accordingly, a 1935 Lincoln cent is as important to completing a Lincoln cent collection as is the 1909 V.D.B., and the 1902 Liberty Head nickel is just as important as the 1883 Without CENTS.
The completion aspect is another important part of collecting, a challenge, just as is filling in a crossword puzzle. There is a certain nicety about having one of everything within a specialty.
Other than the collecting of dates and mintmarks, many numismatists form type sets-one of each basic design. However, even this has a completion aspect. Anyone wanting to have a type set of Liberty Seated half dollars, for example, will want to get an 1839 Without Drapery, the With Drapery and Without Motto type from 1839 to 1865, the 1853 With Arrows and Rays, the 1854 or 1855 With Arrows but Without Rays, the 1866 to 1891 With Motto, and the 1873 or 1874 With Motto and With Arrows at the Date. If any one of these types were to be ignored, there would be a feeling of dissatisfaction.
With regard to coin sellers not knowing what they are doing, a leading professional commented wryly, that with a box full of certified coins, “even a monkey can become a rare coin dealer.” And, this is true.
There are no legal or professional requirements needed to call oneself a “professional numismatist,” or to have business cards printed, etc. In a way the situation is not much different from America 200 years ago, when anybody could call himself a dentist, or even a medical doctor in some areas.
Similarly, today the term “financial adviser” means very little, and anyone can designate himself or herself as this. Within securities we have many predatory sellers that are part of a system whereby from their viewpoint many want to earn as much commission as possible, but from the viewpoint of the customer, solid value and liquidity are the objectives. There are exceptions among sellers, of course, but there are so many misrepresentations and frauds even by leading firms that they make a continuing stream of news and financial papers. Once again the bottom line is to have one’s own knowledge and not rely upon others. Do your own research is good advice, and the same is true of coins.
Of course, in all fields-coins, stamps, art, real estate, securities-you name it, many if not most buyers want the decisions made for them, everything to be automatic. This may work well in a rising market where all crows appear to be as beautiful as swans, but when difficulties occur, then buyers realize the true nature of what they have.
A very nice thing about numismatics is that gaining knowledge can be very enjoyable-indeed a great pleasure. If someone simply buys coins without knowing about them, this is a cardboard existence. Reading about coins, learning all about them-as you say you have-increases enjoyment, produces better buys, and contributes to longevity in the hobby. Those who read a lot tend to stay with numismatics for many years. Those who read little but simply buy certified coins and stick them in a bank vault tend to be here this year and gone the next. Alan, thanks again for your nice note.