COIN GRADING

Knowledge Is Power And Information Is Money

An interesting series of events occurred at the last annual meeting of BHCC concerning the grading of coins.  The usual discontentment expressed by many members about the current state of books on grading coins was the main topic.  One member had read that Liberty Nickels “should have full kernels on the corn in the wreath to grade extremely fine”, and yet after searching at several coin shows he found a few dozen nickels graded XF and even AU but couldn’t find a single one with full kernels.  Much to his surprise, he later found that even in uncirculated grades, Liberty nickels often do not have “full kernels”.  More to the point, kernels are not even full on many PROOF Liberty nickels that are specially struck twice in order to bring out the detail for collectors.  Several members were using terms to describe the current grading books, such as “too vague”, “overly simplified”, “excessively generalized”.   

     Member Dorothy McCormick stated that her grading book reads, “All I have to do is compare my coin with the coin in the picture.” She stated, “That is ridiculous because all it illustrates is one coin for each grade.  I have forty-three Morgan Dollars, each graded MS 65 by the Professional Coin Grading Service.  But not a single one looks exactly alike because most of the O mints are poorly struck to various degrees and the S mints are really sharp with nicer luster to various degrees.  I’m tired of the bulky slabs and am going to break them out and put them in a nice album.”       

     Another member, Jason Stuart, stated that all the grading books give an “elementary cookie cutter approach to grading coins.” When asked what he meant by “cookie cutter approach”, Mr. Stuart stated that he is a specialist in Buffalo Nickels.  He further stated that many dealers and collectors over-simplify the grading of these complex coins by naming some arbitrary and random part of the coin, such as the horn on the Buffalo, and declare that the coin has to have a “full horn” to grade VF.  Nothing could be further from the truth”, he notes.  “Most D & S mints in the teens and nineteen-twenties are not even STRUCK with a full horn to begin with.  Are we going to call weakly struck AU and uncirculated coins with full obverse details ‘Fine’ because some person decided long ago that if it can only grade above Fine when it has a full horn or full liberty?  What about the overall percentage of detail all over the rest of the coin?  Grading coins by an isolated area such as "Liberty" on a scroll or headband or a ‘full horn’ is just as illogical as grading circulated Standing Quarters by Miss Liberty’s head detail or Mercury dimes by the lines in the bands. Most Standing quarters were never struck with full heads, and most Mercury dimes were never struck with full bands.  To demand that a coin has to have certain features in order to grade a certain grade is cookie-cutter thinking and is an embarrassing and amateurish way for dealers or advanced collectors to approach grading coins.”  After much healthy debate on the topic, it was decided that BHCC should get together a “grading committee” to publish at least three pictures of each coin in every grade in RCM, and allow members and readers of RCM to add feedback so that a more exacting consensus can be obtained as a better guide for grading coins.  It was generally agreed that grading coins will never be an exact science, but we could get closer in GENERAL agreement when we give many examples of each coin in each grade, rather than a dogmatic command or rule that a coin has to be graded by an arbitrary part of it’s design.

    It was also noted that often there can be honest and legitimate disagreement between buyer and seller pertaining to a grade of a coin. Grading can involve the psychology and subjective tastes of people with different levels of experience and legitimate viewpoints. Often disagreements can be resolved when we realize that sometimes a seller may be overly optimistic and a buyer can be overly critical. As one of many examples, MS 65 coins are referred to as "Gem" but in no way does this term mean that the coin is perfect or anywhere near so. Most members report that they have never seen a perfect coin, and an MS 65 is a full 5 points lower than the perfect grade of MS 70.
When buying and selling coins, one must keep in mind that many issues are virtually non-existent in fully struck condition, even in the highest possible uncirculated grades of MS 68 and MS 69. Up until a few years ago, all dies were made at the mother mint in Philadelphia and these dies were transported in limited quantity to the “branch” mints such as San Francisco, New Orleans and Denver. During most years, these branch mints had to stretch out their limited supply of dies to the maximum, so the coiners would purposely allow a slight space between the obverse dies and reverse dies to minimize wear. This resulted in extremely weak strikes and almost no finer details on major parts of many coins. Also, because the mint was interested more in commerce than art, very few older coins are nicely struck and almost all have at least a few bag marks. So even with the precaution of spacing dies apart to avoid quick wear, what few dies the mints had, quickly wore down resulting in flatly struck coins NOT wear on the coin itself. So how does one tell the difference between strike and wear? Weakness of strike is usually confined only to central or isolated areas, leaving the rest of the design fully intact in most cases. If there are isolated flat spots on the highest part of the coin, yet some other areas of the coin are sharp and complete and NO breaks in luster/toning and NO slight traces of wear on other parts of the coin, the coin is Uncirculated. By nature, wear occurs evenly and uniformly all over coins, not just one or two areas. Buffalo nickels do not just wear on the horn nor on Miss Liberty's head detail on Standing Quarters and Saint Gardens' Double Eagles, nor just on Diamond detail on Indian Cents, Feather and hair detail on Bust and Seated coins, Wreath Detail on half cents, large cents, half dimes and Seated Dimes, Miss Liberty's hair detail and the Eagle's feather detail on many Morgan and Peace Dollars, Wheat stalks on Lincoln cents, lines on Mercury Dimes, the hand detail on Walking Liberty Halves bell lines on Franklin Halves, steps on Jefferson Nickels, etc.. All of these areas mentioned above on these type coins may be weak, fuzzy or non-existent due to weakness of strike, while all other detail in the coins overall design may be much sharper and bold.
Listed on the following pages is part one in a twelve-part series on grading coins. This will culminate in a book on the subject, featuring three coins of each type in each grade. Reader feedback and photos are appreciated and Contributors will be acknowledged in print.
Current growing list of Contributors and other research sources:
James Allen, Mark Austin, Charles Baker, Q. David Bowers, David Carter, Coin Universe Auctions, Robert Dupont, R.D. Drysdale, RD Rare Coins, James Halperin, Heritage Auctions, Dr. Steve Jacob, Dorothy McCormick, PocketChange, Jason Stuart
 

 

        Grading abbreviations.  These are general guidelines for grading. It should be noted that many issues, such as "S" mint and "O" mint issues, never exhibit full detail even in the highest Uncirculated grades as not all coins are fully struck. The mint was interested more in commerce than art, so very few coins are nicely struck and almost all have at least a few bagmarks. (Small scuffs and abrasions from being banged around with other coins in bank bags). Central figure = the main design in the center of the coin, such as Washington, Franklin, Lincoln, Miss Liberty, a shield or an eagle.

 

NOTE:  MS = Mint State Unc. = Uncirculated.  BU = Brilliant Uncirculated Unc. All terms can denote the same grade, but BU usually refers to a fully brilliant coin whereas MS or Unc. may usually refer to a coin that is toned to various degrees and colors.

(Because no two coins are exactly alike and because coins should not be graded by a single comparison, cookie-cutter approach).

Pr – Poor (1) - The worse possible condition, worn, holed, damaged or defaced, barely identifiable by type. A collectible grade for those who cannot afford some of the colonial issues and early type coins from the 1790s.

Fr – Fair (2) - Faint details in the central areas start to show and identifiable by type, although not usually by date. In many pre 1838 issues there may be no detail on the reverse due to weak strikes.  Extensively worn or damaged.

AG - ABOUT GOOD (3) - Portions of the design worn away entirely. Date and lettering will only be partially visible. Most 1790s issues will not have a date at all, such as 1793 Chain cents.  Central figures partly outlined.

Note that this example has very little damage, just even wear. Undamaged coins in this low grade are hard to find. Although the coin is heavily worn near the top, the bottom is unusually strong. A classic example of an uneven strike resulting in uneven wear.

In terms of wear alone, this coin would normally grade VG, but excessive damage takes it down to the AG.

This coin would also normally grade VG if not for excessive porosity (pitting caused by years of oxidation & corrosion, seen on most pre-1816 copper coins & many pre-1830 silver coins due to several decades of exposure).

G – Good (4-6) - A coin in G will show very heavy wear. The top part of the lettering may be faint due to wear or weakly struck rims.  A weak outline of the main portrait will be visible, with no central designs apparent, such as hair, eye, “Liberty”, feather detail, etc.  Circulation marks are common as such coins have been in use for decades.

Note that this example has very little damage, just even wear. Undamaged coins in this low grade are scarce, as it takes about 50 years of heavy use to wear this much.   Lettering and date are weak but fully readable.

This example is a bit weak on the reverse center but strong on the obverse center. Note the light damage, and circulation marks, which is expected on any coin with this degree of wear.

A very strong example representing the highest end of the grade.

VG – Very Good (8-10) Rims are full as is date and lettering. There may be some detail in center, but still with heavy wear on all portions of the design. In many cases, only the basic outline of the major design will show clearly, unless weakly struck in some areas, as is common among pre 1836 issues.  The lettering (legends) are often complete, but may be weak in some areas, as many coins were unevenly struck and thus wore unevenly as well.

Another example of an unevenly struck coin, this example has very sharp outer details and very weak central details, making the overall grade a nice VG.  It is logical to grade by overall detail, not just pinpoint areas.

A sharp example with many bag marks and scuffs as would be seen on any coin of this low grade.

Representing the highest end of the grade in terms of wear, with typical circulation marks.

F – Fine (12-15) - Considerable wear on all parts of the design.  The overall central details on the main designs are around 35% visible for Fine-12 and about 45% for Fine-15. Full rim and date except on poorly struck issues, which are to be graded by overall detail.  Unevenly struck coins can technically have areas that appear as “good” and as high as “VF-XF” simultaneously.

A nice example with a few circulation marks as expected, which if much more severe, should usually be described.

Unevenly struck with some VF details & some VG details making the overall grade fine. Note weakness on left reverse.

An evenly struck example representing the highest end of the grade.  Reverse is weak in the center, but stronger rims.

VF – Very Fine (20-25) - Moderate wear on the coin's highest features, fields also show moderate surface wear and often have small circulation marks. Most of the major design details will still show, but not necessarily with clarity or sharpness.  Sharp rim and date except on weakly struck issues such as most Standing Liberty Quarters, S & D mint Buffalo Nickels, and early large cents. Overall central design detail is about 50% for VF 20 and 55% for VF 25 examples for VF 30 and VF 35 examples.

The obverse is in a rare, nearly flawless state while the reverse has a few of the expected circulation marks expected in a low-end Very Fine grade.

Very bold drapery details but has some slight porosity making this a VF 20 coin.  Unusually well-struck rim for a coin in this condition.

Sharp with no problems. Nearly full drapery details make this a VF 25.  The flaw below the date is a filled die error, which does not affect grade.

VF 30 – VF 35            Same as above except overall central design detail is about 60% for VF 30 and 65% for VF 35 coins. 

A sharp VF with some minor porosity on the reverse, making this a VF 30. Obverse is nice, with no porosity.

Sharpness of VF 35 but has slight porosity, making this VF 30. Moderate to heavy porosity would make it grade VG-F.

One of the highest quality VF coins one can find, problem-free with sharp details makes this a solid VF 35+, with only a few tiny contact marks.

EF or XF - EXTREMELY FINE (40) - Sharp rim and date except on weakly struck issues. The highest points of the designs and fields will show some slight wear and circulation marks.  Most of the lower-struck parts of the design should still be sharp, and if most of the coin is very sharp with isolated flat spots on the higher points, chances are it’s a weakly struck coin, as coins do not wear unevenly.  In this grade, coins are not expected to have any luster although some might have traces.  Most original (uncleaned) silver coins are toned in various shades of light gray to dark gray or have a golden hue.   Copper coins of this grade are generally various shades of light to dark brown.  Overall central figure details are about 75% as originally struck

A nice problem free example with glossy brown surfaces. Note that there is a lot of hair detail but very little leaf detail on the reverse. This is indicative of a weakly struck coin as coins do not wear just on one side.

Note that this coin also has strong hair detail and weak leaf detail. This is common among a lot of coins when a coin is struck stronger on one side than the other. Since coins are graded by wear and not strike, such coin should always be graded by the strongest side since a lack of detail on the weaker side does not indicate actual wear.

More evenly struck on both sides although the reverse is weak in the center as usual, but with a strong rim compared to a weak obverse rim.

EF or XF -  EXTREMELY FINE (45)  Same criteria for XF 40 except overall central design detail is about 85-90% as originally struck.  Sometimes reflective luster might appear more often on silver and gold coins in XF 45 examples than in XF 40 examples.

A sharp strike with a few of the usual light circulation marks one would find on older coins.

Sharp with some usual slight porosity.

Very sharp with nearly 90 % hair detail but with typical weakness on the reverse.

AU ABOUT or ALMOST UNCIRCULATED (50-53) Traces of surface wear on the highest points of the coin's design. Some wear will also likely appear in the coin's fields in the form of scattered hairline scratches that are caused by the coin being rubbed slightly, or from being in one's pocket or purse. Since by definition, an AU coin has been circulated, there will be a few contact marks or circulation scratches.  Deep or distracting scratches, marks or heavy rim dings should be mentioned when describing an AU coin in print.  In this grade, the coin may or may not have luster remaining in the protected areas since most silver coins tone quickly and copper coins are often brown even in “Gem” uncirculated, older copper coins usually do not have luster in AU condition. Gold coins should have noticeable traces of original luster on both sides as gold does not heavily tone unless the gold/copper mixture of the coin presents more copper towards the surface.  This phenomenon is known as “copper streaking”.  Overall central figure details about 90% to 95% of the design as originally struck, taking into account softly struck areas.

Usually AU 54 grades are not listed, as this is splitting hairs, much as would be attempting to standardize VF-24, XF-44, etc.

A sharp coin but on the lower end of AU with noticeable wear on the shoulder, the lower hair locks, the ribbon, and above the forehead.  Note the reverse has a typical weak strike, which should not determine grade as it is not actual wear.

Less wear on forehead and lower curls than the AU 50.  Reverse also has a typical weak strike.  Note that even AU coins will have circulation marks, bag marks or contact marks, as often even uncirculated coins have large numbers of marks.

A sharply struck coin and thus a strong AU 53.  Only excessive bag marks or contact marks keep this out of the AU category as there is almost no wear.  Reverse is weak due to a typical soft strike, evident because coins wear uniformly and not just in isolated areas. 

AU (55-59)  Same as above except there will be over 95% central detail visible for AU 55 and up to 99% for AU 59 examples.

A nice AU 55 coin with sharp details and virtually no problems.  Only a slight mark on the neck with wear on the cheek and upper hair keeps this from the AU 58 category. 

Another sharp obverse example with a typical weak reverse.  A few circulation marks near the bust keeps it out of the 59 category.

A sharp AU 59 example with virtually no wear.  Only a slight rub on the obverse and a couple of small circulation marks on the reverse keeps this out of the uncirculated categories.

UNCIRCULATED (UNC) - This general grade classifies all coins that do not show any evidence of circulation; in other words, physical surface wear of any degree. Of course not all "Uncirculated" coins are equal, and collectors have adopted a set of standards for describing an uncirculated coin. These will be described in greater detail later. 

BU (60 through 70) - Brilliant Uncirculated  Fully brilliant and original as minted. A coin that has no wear but may vary in quality according to the number of bagmarks, strike, luster, spots, damage etc. 60 is the worse and 70 is perfection. We never buy a BU coin unless it looks nice, so even our BU 60s have some eye appeal for the grade. We have never graded a coin "70" because we don't believe a perfect coin exists, even ones graded by the major grading services as 70 are not perfect in our judgment.

"Uncirculated". Over the last two decades, the Uncirculated grade has been refined and split into several subcategories to more accurately describe mint state coins. The general descriptions of these Uncirculated grades, from best to worst, are as follows:

MS (60 though 70) - Mint State  The same description applies for BU, except, we use MS to denote a coin that may Dot be fully brilliant, but has nice toning or mellowing of luster over the years.

PERFECT UNCIRCULATED (MS 70) - Coins of this grade must show no contact marks of any kind, even under 10 power magnification. The coin must have a perfect, full strike, and feature full blazing luster. To date, no Canadian coin has ever been found to be worthy of an MS 70 grade.  No imperfections under high magnification. A perfect coin with no slight scuffs nor spots.

GEM UNCIRCULATED (MS 69) MS69: Any imperfections, hairlines, etc, are virtually undetectable under magnification. Finding business strike U.S. coins graded this high is extremely rare. Even Proofs are difficult to find in this lofty grade. MS68: Full mint luster or highly lustrous, attractive toning. Outstanding eye appeal. No major distracting marks are present on the coins primary surfaces under average magnification power (3x to 5x).

GEM UNCIRCULATED (MS 67) - An MS 67 coin will appear perfect at first glance. Only after careful study will the observer detect any blemishes. Such blemishes must be of an extremely small and isolated nature. One too many light surface marks will automatically disqualify a coin from an MS 67 grade. The coin must still be fully struck with outstanding luster. It is rare to achieve an MS 67 grade on a Canadian coin.  Above average strike. Full mint luster or highly lustrous, attractive toning. and attractive eye appeal. A few tiny 'marks may be present and even one single hidden mark or flyspeck-size spot near or at an important design area of the coin may exist, with only a few of tiny marks and abrasions present.

GEM UNCIRCULATED (MS 66)  Nice strike, although many issues may not be full. Full mint luster or attractive toning is required for the MS66 level. Should have above average eye appeal and be considered attractive for the issue. A few, small scattered marks may be present, but not overly large obvious marks that detracts from the overall nice appeal of the coin when view with the unaided eye. Under extremely high magnification, any coin can appear horrendous as even freshly minted proof coins can have flaws caused by die problems or microscopic spots caused by oily coining machinery. Minute spots may be noted under l Ox or more magnification.

CHOICE UNCIRCULATED (MS 65) - Coins grading MS 65 should still have a "quality" look to them. Surface marks must only be visible after some study, and will be small and not overly bothersome to the observer. Coins with surface marks that are substantial enough that the observer notices them at first glance should not grade MS 65. The strike should be full and above average for coins of that series. The luster should be complete and above average for that series. Lower denomination Canadian coins will occasionally grade MS 65. Silver dollars, with the exception of 1935, 1949, and 1950 are very scarce in MS 65.  The strike should be at least average for the issue and preferably sharp for the issue, but not in the case of many branch-mint issues. The luster should be above average although full mint luster or exceptional lustrous toning is not required as in higher grades. Bag marks can be obvious, but should not distract too much from the coin's overall appearance. Bag marks on the rim or near the edges are more obvious than bag marks near the center. Generally, MS65's are above average for the issue with attractive luster and are appealing coins overall due to having few if any large or heavy marks/spots on the central designs.

CHOICE UNCIRCULATED (MS 64)  The strike is about average with average luster. Full mint luster is not required. Average strike for the issue. Bag marks are present, sometimes heavier than others. A few tiny spots and non-distracting hairlines can also be present. Nowhere near a perfect coin, but nice to look at with the unaided eye.

BRILLIANT UNCIRCULATED (BU or MS 63) - An MS 63 coin will appear to be slightly better than the average Mint State coin. There will be obvious contact marks on the coin's surface, although the strike should be fairly complete. The luster should be attractive, even if not complete. The majority of Canada's Mint State coins will fall into this and the next grade.  An average uncirculated coin for the issue. Full mint luster is not required, nor is full strike. Average eye appeal is sufficient to make this grade. Bag marks are more obvious and can be heavy at times. Can be professionally cleaned or dipped, but not too harshly. Can also be lightly hairlined, marked, spotted and/or weakly struck.

BRILLIANT UNCIRCULATED (BU or MS 62)  Will likely have a below average strike along with below average luster, toning and lacking in eye appeal. Bag marks can be heavy and the coin's surfaces may have some large, detracting ones. May be cleaned or hairlined, marked, spotted and/or weakly struck.

BRILLIANT UNCIRCULATED (BU or MS 61)  MS60: An often unattractive, possibly impaired coin with surface distractions and scuffed, heavily bag marked surfaces. Can be harshly cleaned or heavily hairlined, marked, dull, spotted and/or weakly struck

(TYPICAL) UNCIRCULATED (UNC or MS 60) - Coins grading MS 60 are Uncirculated, but only just so. There will be numerous, in some cases unattractive surface contact marks. The luster is sometimes badly impaired by these marks, and may in some cases be almost totally obliterated. The strike will be mushy from below-average striking pressure. Despite these features so commonly seen on Typical Uncirculated grade coins, they must not show any sign of surface wear. Any indication of surface wear will disqualify the coin from any Mint State grade, and the circulated grading system described further applies. Some coins grading MS 60 however, are actually quite attractive, and have been branded MS 60 only because of a poor strike or just a few too many bag marks.

An MS 63 coin will appear to be slightly better than the average Mint State coin. There will be obvious contact marks on the coin's surface, although the strike should be fairly complete. The luster should be attractive, even if not complete. The majority of Canada's Mint State coins will fall into this and the next grade.

Once the coin has been assigned a grade, there are two additional factors that do not contribute to the coin's technical grade, but do affect the actual selling price of the coin. These two factors are toning and overall eye appeal. The first term, toning, is controversial, as some hobbyists argue that the presence or indeed absence of toning should be used to formulate the grade. In our opinion, however, the technical grade of the coin is not affected by toning. There are several reasons for this. First, one has to remember the three criteria used to grade Mint State coins. Ask yourself what affect toning has on each criterion. Does toning affect the quality of the strike, the luster or the surface quality? The answer to all three questions, of course is no. Certainly, toning may disguise or even hide surface marks, and it may totally mask the luster. But regardless of the toning present, the bag marks are still there and so is the luster. Secondly, the inconsistency of collector's tastes should also indicate that toning should not be a grading factor. Many novice collectors believe that toned coins are a bad thing, and would never buy one. Yet, there are other collectors that would kill for a coin with attractive toning. If these two schools of thought cannot agree on whether or not toning is a "good" or a "bad" thing, then why should we let this issue invade the already complex issue of grading! That is why we feel that only the selling price of the coin should be affected. If a buyer thinks toning is bad, the coin may sell for less. If a buyer loves toning, he will not hesitate to pay a bit more for something he or she likes.

The second of the two factors is eye appeal. At a recent coin show, two 1902H 25 cent coins were made available for sale by the same coin dealer. Both coins had been assigned MS 63 or a "Brilliant Uncirculated" grade. Yet one coin was priced at $400.00, and the other was priced at $500.00. Why such a gap in the price for two seemingly identical coins? Simply put, the coin for $500.00 looked nicer. Despite all the terminology, the definitions, the abbreviations, and the "science" behind grading, collectors will always be willing to pay a bit more for a coin they like. This collector preference is usually seen in relation to a coin that is toned or a coin that is not toned (remember the two schools of thought!) Collector preference in terms of eye appeal is sometimes also manifested in other fashions, such as the positioning and location of bag marks on the coin's surface or the exact positioning of the metal flow lines that result in the luster. So in conclusion, a coin that is MS 63 and extremely attractive will probably sell for a price fairly close to that same coin that is graded, let's say, MS 65 that is downright ugly!

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