US Coins

Multiple grading philosophies

Bill Fivaz’s and Tom DeLorey’s letters about grading bring up an important but not new issue. 

When a coin’s grade is determined by its preservation — how much it has changed since it was struck — we call that a technical grade. Technical grading, which both Fivaz and DeLorey discuss and support (as do I), is what has long been done traditionally.

These days, much of the coin “industry” now follows market grading: the value of a coin determines its grade, rather than the other way around. The reason is simple. If grade must equal price, then an attractive About Uncirculated coin with better eye appeal than a nicked-up or discolored Mint State coin, and therefore worth more, must be given a higher grade than the ugly Mint State coin. This is why grading services grade attractive, lightly-worn coins as Mint State. Indeed, among the half cents and large cents, coins in MS-60 to MS-63 slabs are typically worn.

An alternative approach to aligning grade with price, which is used by collectors of early copper, is to lower the grade of an impaired but otherwise unworn coin to AU or less depending on the damage. Philosophically, this approach downgrades the impaired but unworn coin because it is no more desirable than an attractive AU or Extremely Fine coin. 

For now, the grading services’ view that value determines grade seems to be winning the philosophical argument, especially among collectors who either don’t know how to grade or are unsure of their grading abilities.

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