By Arnold Miniman for The Island Connection
All of you have seen the ads on television. You go to a car dealership, buy a new Chevrolet, Ford or Chrysler for $25,000, drive off the lot and immediately its value plunges by twenty per cent, even though it is in perfect condition. Coins, and in particular older coins, are rarely seen in perfect condition.
After all, they were minted to be used in commerce. The value of a coin is generally based on its rarity and condition.
The third important factor is demand. If there is no demand for a certain coin it is not going to be worth much. When people first started “grading” a coin’s condition they developed a strange vocabulary.
A coin in very worn condition was called “good,” while a coin with a bit less wear was called “very good.” In better condition a coin was either “fine,” “very fine,” “extremely fine” or “almost uncirculated.” A coin that was considered uncirculated was called “BU” or brilliant uncirculated.
The question was and, to some extent, still is who determines the condition of a coin? That’s not an easy question to answer. First let’s look at the development of grading standards.
In 1949, William Sheldon, an expert in the area of large cents, wrote a book entitled “Early American Cents.” In the book he created a 70 point scale for the grading of large cents. He used many of the words noted above to describe the condition of a coin, but also gave the words numerical counterparts. So, a “good” coin was either a 4, 5 or 6. A very good coin received either a 7, 8 or 10, a fine coin was either a 12 or 15, etc. An uncirculated, or mint state coin, received either a 60, 65 or 70 point grade.
The problem here was his scale attempted to create a value for a large cent, dependent on its grade. The scale did not apply to all other types of coins, and was soon ignored.
In the 1970’s the American Numismatic Association decided to adopt the Sheldon 70 point scale for all coins. In doing so it greatly expanded the verbal descriptions associated with the grades. For example, a very good coin was given a grade of 8, while a choice very good coin received a 10. Now an almost or about uncirculated coin was divided into 3 categories, AU50, AU55 and AU58.
While this system was an honest attempt to standardize grading, it failed to standardize the graders. Some coin dealers still sold cleaned or “whizzed” coins as brilliant uncirculated. In other words, there was still rampant deception being practiced in the hobby.
In an effort to further standardize grading the American Numismatic Association created a grading service known as ANACS. This service employed experts to assign a numerical grade to the obverse and reverse of a coin. Coins submitted would receive a certificate with a photo of the coin being graded. By creating this service the ANA attempted to take grading away from dealers who had a vested interest in a coin, and put the grading of the coin in the hands of an independent pair of eyes.
Arnold Miniman is a resident of Seabrook Island. He graduated from Rutgers University in 1968, and the Washington College of Law in 1971. He practiced law in New Jersey for forty years, and was a Municipal Court Judge for over twenty-two years. Among the many coin related organizations he’s a member of are the The American Numismatic Association and the Seabrook Island Coin Club. His website is carolinacollectorcoins.com.