Grading History
Coin grading can be defined as "a standardized short-hand description of a coin’s
relative condition." Assigning a Grade to a coin allows dealers and collectors to
accurately describe coins to each other, regardless of whether they are able to
see the pieces.
In the 19th century the first attempts to grade coins were pretty poor.
Descriptions such as "pretty good", "rather poor", "much circulated",
"uncommonly fine" and "quite Uncirculated" were used. Since photographs in catalogs
were not widely used a collector was never quite sure what a coin would look like
until he saw it in person.
As coin collecting increased in popularity the need for a standardized grading
system became obvious. Howland Wood was one of the first to attempt to establish
a set of written standards. He felt that "While it is unreasonable to expect
everyone to see things exactly alike, it is possible for everyone to see things
more nearly alike."
Dr. William Sheldon also recognized the need for a standardized grading system
and in 1949 he introduced a 70-point numerical grading scale for large cents.
The circulated grades ranged from 1 to 55 and the uncirculated grades ranged
from 60 through 70. His "Quantitative Scale for Condition" includes the grades
of 1-Basal, 2-Fair, 3-Very Fair, 4-Good, 5-Very Good, 12-Fine, 20-Very Fine,
40-Extremely Fine, 50-About Uncirculated and 60-70 for Uncirculated. He introduced
this scale as an algebraic pricing formula for large cents. He felt the value of a
coin could be determined by multiplying the value of a particular coin in its
basal state by the numerical grade. The formula was presented as: Book Value = Basal
Value X Numerical Designation. As an example, if a coin’s basal value was $2 and
it was graded Extremely Fine (40) the value of the coin should be $80 ($2X40).
Today’s grading system is loosely based on Dr. Sheldon’s work and is used for
all U.S. coins. Coins are now graded on a scale of 1 – 70 points, with a
1 assigned to a coin that is barely recognizable and a 70 to a coin that is
perfect in every way. Coins that have been circulated will grade in range from 1-58. Uncirculated coins, or coins in their original mint state, are graded from Mint State (MS) 60 – 70. It should be noted that coins direct from the mint that have not circulated will rarely carry a grade of MS70 due to flaws that occur during the minting process and nicks that occur during packaging.