Perhaps no aspect of collecting coins is dissected, discussed and debated as much as grading. No single aspect is more important, for both sellers and buyers, than the grades of coins. Small differences among the higher grades can translate into huge differences financially.

An abundance of guidebooks and articles have been written to help collectors understand the grading process, learn how to grade coins and spot undergraded or overgraded coins. And the grading process has advanced considerably since the days of vague descriptions, thanks to the popular book Photograde and third-party grading services.

This doesn't apply to world and ancient coins, though. The relatively small number of U.S. coins (comparatively speaking), and their abundant popularity, means most works devoted to grading coins are tailored to U.S. coins.

Because of this, Coin World will explore the world of U.S. coin grading and compare that to what exists in the realm of foreign and ancient coins.

But how did the U.S. system begin?

Although grading systems were in use long before the mid-20th century, the system in vogue today in the United States dates to 1949. According to the Official Guide to Coin Grading and Counterfeit Detection issued by Professional Coin Grading Service and edited by Scott Travers, the 1 to 70 grading system in use today can be traced to William H. Sheldon. In 1949 Sheldon authored Early American Cents, later titled Penny Whimsy. The book offered a grading system for large cents minted from 1793 to 1814.

When the American Numismatics Association was trying to establish uniform grading standards during the 1970s, one of the proposed systems would have run from 1 to 100. However, the book said, "The panel decided to turn instead to a system already being used in a much more limited way."

Sheldon's system, the book reports, was based on the 1794 Liberty Cap cent, "a bellwether coin in the series." He noticed that coin in "the lowest collectible condition" sold for about $1, so $1 became the base value and that grade was assigned the numerical value of 1.

The system evolved from there in a similar fashion; coins in Good condition were selling for about $4, so Good 4 became another grade level, and so on.

The book said: "The relative values reflected in Sheldon's scale may have been accurate for one given coin - the 1794 large cent - at the time he first proposed them as grade levels. However, they have never been reliable barometers for U.S. coin values. In choosing to base its own grading system on Sheldon's version, the ANA apparently was influenced by the fact that the 1-70 scale was a known commodity, already being used in at least one portion of the coin market."

What has sprung from that system is often hard for new collectors to grasp, and the plethora of guides and their descriptions don't help clarify the matter.

The PCGS book lists 30 different grading points, slightly more than the 21 grading points determined by the ANA in Official A.N.A. Grading Standards for United States Coins. A Guide Book of United States Coins, more commonly called the "Red Book," bases its 13 grades on the ANA standards. But there are only nine grading points in what is considered the major source for world coin collectors, the Standard Catalog of World Coins, by Chet Krause and Clifford Mishler.

Here's a comparison, grading point by grading point of the listed books' general grading instructions.

The PCGS book is the only one to explain Poor 1, "Identifiable date and type," and Fair 2, "Mostly worn, though some detail is visible."

The PCGS book further lists About Good 3, "Worn rims but most lettering is readable though worn," while the "Red Book" terms AG-3 as "Very heavily worn with portions of lettering, date and legends worn smooth. The date may be barely readable."

For world coins, the Standard Catalog writes, "On the About Good coin, there will typically be only a silhouette of a large design. The rim will be worn down into the letters if any."

PCGS then lists two more variations, Good 4, "Slightly worn rims, flat detail, peripheral lettering nearly full," and Good 6, "Rims complete with flat detail, peripheral lettering full."

The "Red Book" lists G-4 as "Heavily worn with design visible but faint in areas. Many details are flat," while the Standard Catalog said: "The Good coin's design will be clearly outlined but with substantial wear. Some of the larger detail may be visible. The rim may have a few weak spots of wear."

The PCGS lists two variants of the next grade level, Very Good 8, "Design worn with slight detail," and Very Good 10, "Design worn with slight detail, slightly clearer." The "Red Book" defines VG-8 as "Well worn with main features clear and bold although rather flat," and the Standard Catalog omits this grade.

The PCGS guide offers two levels of Fine, F-12, "Some deeply recessed areas with detail, all lettering sharp," and F-15, "Slightly more detail in the recessed areas, all lettering sharp." The "Red Book" offers F-12 as "Moderate to considerable even wear. Entire design is bold with overall pleasing appearance," and the Standard Catalog said: "For Fine, there will be about 50 percent of the original detail visible. Or, on a coin with no inner detail, there will be fairly heavy wear over all of the coin. Sides of letters will be weak. A typically uncleaned coin will often appear as dirty or dull. A small grading area will have just under 50 percent of the original detail."

Very Fine is one of the largest categories, at least in the PCGS book. It lists Very Fine 20, "Some definition of detail, all lettering full and sharp," and VF-25, "Slightly more definition in the detail and lettering."

The list continues with VF-30 described as "Almost complete detail with flat areas," and VF-35 explained, "Detail is complete but worn with most high points flat."

The other books are not as thorough. The "Red Book" lists two grading points, VF-20, "Shows moderate wear on high points of design. All major details are clear," and choice Very Fine, VF-30, "Light even wear on the surface and highest parts of the design. All lettering and major features are sharp."

The Standard Catalog offers only one description: "The Very Fine coin will have about 75 percent of the original detail visible. Or, on a coin with no inner detail, there will be moderate wear over the entire coin. Corners of letters and numbers may be weak. A small grading area will have about 66 percent of the original detail."

PCGS and the "Red Book" offer two grading points for Extremely Fine, while the Standard Catalog offers only one. PCGS said the "Detail is complete with most high points slightly flat," on an EF-40 coin, and on an EF-45 coin, "Detail is complete with some high points flat."

The "Red Book" said on an EF-40 coin, "Design is lightly worn throughout, but all features are sharp and well defined. Traces of luster may show," and on a choice EF-45 coin, "Light overall wear shows on highest points. All design details are very sharp. Some of the mint luster is evident."

Though the Standard Catalog has only one listing, its description is thorough: "On the Extremely Fine coin, there will be about 95 percent of the original detail visible. Or, on a coin with a design with no inner detail to wear down, there will be a light wear over nearly all the coin. If a small design is used as the grading area, about 90 percent of the original detail will be visible. This latter rule stems from the logic that a smaller amount of detail needs to be present because a small area is being used to grade the whole coin."

For About Uncirculated, again the PCGS book is the most thorough, offering four different grading points, while the others offer fewer.

An AU-50 coin, according to the PCGS guide, has "Full detail with friction over most of the surface, slight flatness on high points," while an AU-53 coin displays "Full detail with friction over half or more of surface, mainly on high points."