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THE ABE-B-Cs OF COIN GRADING
By Ed Reiter
(NOTE: Coin grading has come a long way since 1976, when the American Numismatic Association voted to add grading to the functions of the ANA Certification Service and authorized an official new book detailing the standards it would use. This article, published in COINage in December 1976, provides a behind-the-scenes look at the preparations then under way.)
*****Once upon a time, coin grading was as easy as A-B-C. Either a coin was, uncirculated or it wasn’t. If it wasn’t, it was either fine or extremely fine. Anything less than fine simply wasn’t worth saving.
Times have certainly changed – and just how much they’ve changed will become dramatically clear next spring, when Whitman Coin Products publishes a new book on coin grading prepared by veteran coin dealer Abe Kosoff and officially sanctioned by the American Numismatic Association.
Kosoff’s manuscript consisted of 260 pages of single-spaced text, and Whitman editors estimate the book itself will contain 384 pages – filled with hundreds of illustrations in addition to the written material.
The new book shapes up, though, as more than just a yardstick of how much the hobby has changed and how complicated grading has become. It looms as a milestone in the hobby’s history and a force that will help promote change for the better in the future.
Improper grading has become one of coin collecting’s biggest bugaboos in recent years. With the ever-growing emphasis on choice condition, the market value of uncirculated coins has skyrocketed in the last five years or so, and the temptation to overgrade not-quite-uncirculated coins has increased accordingly.
Dealers and collectors have relied to some extent on two existing guide books on coin grading: A Guide to the Grading of United States Coins by Martin R. Brown and John W. Dunn (the so-called “Brown and Dunn book”) and Photograde by James F. Ruddy. While both these books are helpful, however, neither is comprehensive enough to satisfy buyers and sellers in many transactions – especially those involving uncirculated coins. And while both books are widely used, neither has the hobby-wide acceptance and prestige that an ANA-sanctioned book seems sure to enjoy.
Kosoff spent more than a year gathering material for the new grading book and hammering it into shape for publication. His interest in the subject dates back much further, though: He has advocated strict grading throughout his nearly 50-year career as a professional numismatist. And he brought to his task a perspective as broad as all of coinage history.
“Grading,” he says, “has probably been a problem for 2,600 years – since the very first coins were struck.”
The problem was worsening considerably around 1970, when Kosoff wrote a column on the need for corrective action – but his warning went largely unheeded. Then, in 1974, he noticed a full-page ad by New York coin dealer Stanley Apfelbaum urging the establishment of a coin grading board, and before long he found himself caught up in the project.
“I wrote Apfelbaum a letter commending him on this effort,” Kosoff recalls. “I told him I’d been an advocate of it, and I was glad to see somebody grab the bull by the horns. As soon as he got my letter, he called me and asked if I wanted to help.”
Before jumping aboard the bandwagon, he asked to see the file on the project – and discovered that Apfelbaurn intended to finance it himself.
“The more I thought about it,” he says, “the more I realized that unless some agency like the ANA got behind this, it would fall of its own weight.”
At length, he persuaded Apfelbaum to relinquish control of the venture to the ANA and got Virginia Culver, then the ANA’s president, to appoint a committee to direct it. Former ANA president John J. Pittman nominally headed the committee, but for all practical purposes Kosoff was its chairman.
“Look, it’s your baby,” Pittman told him. “I’ll act as liaison with the ANA board, but you act as chairman and get things done.”
Kosoff named a task force to prepare grading standards – a necessary prelude to creation of a grading board. He soon became dissatisfied with the approach it was taking, though, and in June 1975, at a meeting in New York, he took charge of the project himself. The episode reinforced one of his long-held convictions: “I don’t believe in all these committees. I believe in one man putting his head on the block, and if he doesn’t do the job, he gets it cut off.”
Preparation of the grading standards was far from a one-man job, Kosoff is quick to point out. He enlisted the aid of dozens of fellow-dealers and other knowledgeable numismatists in drawing up his manuscript – then, when the rough draft was ready, he solicited comments from a cross-section of dealers and collectors.
“At least 60 people were involved in this at one time or another,” he says, “and even those who didn’t contribute anything of substance – those whose ideas had to be rejected, for example – contributed to the recognition of how great a need there is for grading standards.”
It soon became apparent that the need was even greater than he himself had realized at the outset.
“Some dealers didn’t know the fundamentals of various grades,” he reports, “and others who did know how to grade coins accurately couldn’t put their criteria into words; it was something they just did instinctively. We need more than that; we have to be able to spell these things out.”
There were some dealers, too, who backed off when they were asked to participate in the project.
“Certain dealers were afraid to cooperate,” Kosoff says, “because their names would appear as having cooperated and some of the customers who bought coins from them as brilliant uncirculated would see them listed now as about uncirculated. It’s like a man who committed a theft 20 years ago and is afraid of being discovered. If they did overgrade, the day of reckoning is at hand
“I’ve probably overgraded coins myself on occasion,” he adds. “I’m not infallible. But if so, I haven’t done it intentionally. Those of us who have graded conservatively aren’t afraid of this book.”
After weighing and rejecting a number of alternatives, Kosoff made up his mind to model the new grading system on the so-called Sheldon scale – the scale introduced by Dr. William H. Sheldon in Penny Whimsy, his book on large cents. In this system, coins are graded from 1 to 70, with 70 denoting a perfect specimen and lesser grades scaled down accordingly.
“I agree this system wouldn’t make the most sense if we were starting from scratch,” Kosoff says. “It would be much more logical to use a scale from 1 to 100. But from where we start now, it would make no sense to change it. To do that would create tremendous confusion among those collectors who have maybe hundreds and hundreds of thousands of coins in their vaults graded by the old system. People would have to sit down with thousands of coins and regrade them, and it just didn’t seem fair to me.
“Actually,” he adds, “any grading system would work as long as everyone was using the same blueprint. You could use Greek letters if you wanted.”
In recent years, the Sheldon scale has been used widely in the grading not only of large cents, but of all U.S. coin denominations – especially in the designation of mint state (MS) pieces, for it helps express the shades of difference that play such a big part now in the pricing of uncirculated coins.
Kosoff took particular care in setting up the standards for MS-70 (Mint State-70) coins. In doing so, he had to try to reconcile two conflicting and widely held schools of thought.
“The old school,” he explains, “says that a coin is a Mint State-70 only if it is flawless – a perfect coin from a perfect die. The new school says there are some coins which leave the die in an imperfect state. The planchet may not be perfect to start with, the die strike may be weak – or the die may even be worn. There also may be adjustment marks, which show up almost like scratches.”
He resolved the dilemma by coming up with a kind of compromise. Under the ANA grading standards, an MS-70 coin will be described as a perfect coin from a perfect die with a perfect strike on a perfect planchet. Special provision will be made, though, for coins which were imperfect to begin with but have had no wear or damage since being struck.
These, too, will be graded MS-70 – but with suffixes denoting the type of imperfection in each case. Thus, an otherwise perfect coin will be graded MS-70-P if struck on an imperfect planchet, MS-70-S if the strike is weak, MS-70-D if there is die wear, and MS-70-M if there are mint adjustment marks.
MS-65 and MS-60 will be used to describe mint state coins which have suffered some type of damage, however minor, since leaving the die – bag marks or hair lines, for example. The degree of damage will determine which grade applies. Kosoff emphasize s that under no circumstances can a coin be called mint state if it has any wear whatsoever.
The book will discourage the use of intermediate numbers such as MS-69, 68, 67 or 66, stating that these numbers, when used, should be regarded as exaggerations of the next-lower regular grade and adding that under close examination, the coins so described may prove to be of an even lower grade.
Coins in about uncirculated condition will be graded either AU-55 or AU-50, depending on the degree of wear and damage, and extremely fine coins will be XF-45 or XF-40. An intermediate grade – about extremely fine – will carry a 35 rating, and the system will provide three grades for very fine coins: VF-30, 25 and 20.
The spectrum is narrow for grades below very fine.
“Once you get below the level of very fine,” Kosoff explains, “your coin has obtained a considerable degree of wear, and all you need is a little bit more before you throw it out.”
Ratings for the lower grades are 15 for about very fine, 12 for fine, 10 for about fine, 8 for very good, 6 for about very good, 4 for good, 3 for about good, 2 for fair and 1 for poor. The book will describe in detail the characteristics of each of these grades as they apply to every coin of every denomination in the regular U.S. coinage series. There also will be a section on the grading of commemorative coins. Hundreds of drawings will accompany the text, pinpointing spots where each coin shows wear in various grades.
“We decided to use drawings, rather than photographs,” Kosoff says, “because photographs are deceiving. They serve a useful purpose when you’re selling a coin; they help sell it. And they’re attractive. But, there’s real inadequacy about them.”
The ANA Board of Governors approved the book’s text in August, at the ANA convention in New York, and then turned its attention to arrangements for its publication. Those arrangements hadn’t been completed as of early October, but Kenneth E. Bressett, manager of Whitman Coin Products, already was involved in pre-publication preparations.
“We’re hard at work on the illustrations,” Bressett reported. “At this point, I can’t tell how many we’ll, have, but we’re going to try to show the front and back of each coin for each grade – except that we’ll only show one extremely fine piece, for example, even though the book lists two XF grades.”
Whitman hopes to have the book ready for release by early spring. Its working title is Official ANA Grading Standards for United States Coins. Bressett suspects that the press run will not be disclosed, but promises that his company will make “enough to go around” and keep the book in print on a regular basis. Tentative price is $5.
Hobby leaders feel Whitman is performing a significant service by agreeing to publish the book, for the startup costs are substantial – some say in the neighborhood of $100,000 – and it’s likely to be years before the company recovers this investment.
ANA President Virgil Hancock announced at the convention that the association intended to forgo any royalties on the book in order to help keep down the price.
“When anyone asks what the ANA has done for its members,” Hancock said, “this is the answer. Without any monetary profit, we’ve made this grading book possible.”
Hancock paid special tribute to Kosoff. “If Abe Kosoff had worked at bricklayers’ wages,” he said, “the thousands of hours he put in would have put quite a dent in the ANA treasury.”
Kosoff responded that his salary was equal to the royalties. It’s expected that soon after publication of the book, the ANA will move to establish a grading service at its headquarters in Colorado Springs – much like the present ANA Certification Service, which passes judgment on the authenticity of coins it is asked to examine.
In return for a specified fee, the staff of the new agency would assign a grade to each coin submitted for review – strictly in accordance with the ANA grading standards – and register and photograph the coin. Kosoff plans to recommend the establishment of a supplementary “express service” whereby for a minimum charge of $5 plus postage, collectors could have up to five coins graded. As he envisions it, this service would not entitle users to photographs or certificates, however.
Kosoff has no illusions that the book and the grading service will put an end to improper grading. “We can’t legislate morality,” he declares. “We can only establish standards and take action against violators.”
He suggests that emblems be awarded to dealers who comply with the new grading standards – with those emblems subject to recall if surprise tests show that the grading is not up to snuff.
“A dealer who didn’t want his coins tested would be conspicuous by the absence of an emblem,” he observes.
Kosoff also has no illusions that the grading book itself is without imperfection – a flawless MS-70, so to speak.
“If I was going to try to be perfect,” he remarks, “I never would have taken the job. This was a problem that was impossible of a perfect solution. Criticism isn’t going to bother me, though. I don’t expect to be perfect; I expect criticism.
“We probably have some errors in here. We had some disagreements, and I had to weigh both sides – the criticisms on both sides. But we hope we have a solution to most of the problems.”
In reaching for solutions, he even had to scuttle views on grading that he himself had held for many years.
“There are a number of things in this book that I do not personally agree with,” he says. “But I test-checked them, and 80 percent of the people disagreed with me, so I’m just going to have to change my thinking. I never buy a pencil without an eraser.
“The point is, we’ll have a blueprint now – and even if there are errors ... even if it’s not 100-percent accurate ... as long as we have a blueprint everyone can follow, it’s conceivable people will follow it.”