US Coins

Examining inflation of grading Q David Bowers

A certified Fine 12 1877 Indian Head cent violates traditional standards. In recently graded coins, to find what 20 years ago was graded Fine 12 with full LIBERTY, you may need an Extremely Fine 40 coin!

Original images courtesy of Heritage Auctions.

The Joys of Collecting column from Feb. 15, 2016, issue of Coin World:

“The more things change, the more they are the same,” it has been said. Not necessarily so with numismatics, especially grading. Gradeflation has taken over.

For example, I estimate that more than 75 percent of the About Uncirculated 58 gold coins of the 1796 to 1834, or early era, certified in the late 1980s and early 1990s, have now “graduated” to become Mint State 60 to 62.

Twenty years ago, the Fine 12 grade, abbreviated as F-12, for Indian Head cents was defined by the Official ANA Grading Standards as: “Obverse: One-quarter of details show in the hair. Ribbon is worn smooth. LIBERTY shows clearly with no letters missing. Reverse: Some details visible in the wreath and bow. Tops of leaves are worn smooth.”

Jim Ruddy’s Photograde, widely used and with high acclaim for decades, said: “Obverse: A full LIBERTY will be visible, but it will not be sharp. Reverse: The top part of the leaves will be worn smooth. The ribbon bow will show considerable wear.”

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In 1996, I also queried Rick Snow, a Flying Eagle and Indian Head cent specialist, who later wrote books on these. Here is what he said for F-12:

“This is a twilight-type grade, and often if the word LIBERTY is fairly strong, but the headband borders are not complete, a coin will be called VF-20 [Very Fine] by some collectors and dealers. In practice, there are relatively few Indian cents within the strict F-12 category; there seem to be many more VG-8 [Very Good 8] and VF-20 pieces.”

I hold that many if not most grading interpretation today are meaningless in relation to those of yesteryear.

If now, in 2016, you wanted to chart the price performance of an F-12 key-date 1877 Indian Head cent, you’d need to compare the F-12 grade of 1980 with the VF-20 grade of today. Or that is what I thought as I started to write this column.

Wait! That won’t work. I went on eBay and looked at VF-20 1877 Indian Head cents, and not a single certified coin had full LIBERTY. There is even more: Some Extremely Fine 40 coins did not either! 

So it seems that F-12 of years ago is at least EF-40 or so today! What to say about this?

How about: Most market analyses based on coin grades have little or no statistical value?

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