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Coin Grading Is in the Eye of the Beholder of the Holder, or…

coin grading - Sheldon and DuPont

By Harvey StackFounder, Stack’s Bowers ……
I recently read the great piece by Josh Mcmorrow-Hernandez on CoinWeek about what a coin’s grade says about you as a collector. He is so right, and one of the answers he gave is one that should be emphasized and amplified again and again.

I have written before and want to repeat: “GRADING IS IN THE EYE OF THE BEHOLDER”.

How the Present Grading System Evolved

Let us review the numerical grading system, developed by Dr. William Sheldon in his book Early American Cents published in 1949. I was already a full-time dealer at Stack’s Coin Co. in New York. Dr. Sheldon was good friends with my father, Morton Stack, as both loved early coppers (along with Half Cents and American Colonial coins), and many an afternoon did my father sit with Dr. Sheldon as he was putting the finishing touches on his book.

Not only did Dr. Sheldon want to clarify and unify the study of varieties (which had been done by others in several books, just not in one volume), but he also wanted to develop a system where adjectival grading could be supplanted by a numerical grade so that value and rarity could be translated into a guide of dollar value. Dr. Sheldon gave what he termed a “basal value” in accordance with the coin variety’s known scarcity and rarity. The higher the basal value, the higher the value in relation to other Large Cent varieties. Then he developed a numerical grade that corresponded to the adjectival terms formerly used by Large Cent collectors. By taking the ascribed value of the “basal number” and multiplying by the numerical value, one could see the relative value, scarcity and rarity of the cent they were looking at.

Scientifically, this wasn’t the exact value he felt a coin was worth. It was just his way of expressing the differences in varieties so a collector could better see what one variety might cost in relation to another.

Sheldon’s “basal value” was modified in his second book Penny Whimsy, published in the mid-1950s after he received corrections and suggestions from collectors nationwide–including information not published before and therefore not considered in the rarity scale. Again, it wasn’t a perfect system, but it did establish a way to ascertain rarity and the number of low grades as opposed to high grades.

Really it was a guide to how hard to look if you wanted a better specimen.

The system worked well for copper Large Cents, and it was tried for Half Cents, although no one wrote a book about them with a definition and listing like Sheldon did. But to express the grade of a Half Cent, since they were made of the same metal as a Large Cent, Sheldon’s system was employed by some collectors.

It must be remembered that both books by Dr. Sheldon referred only to LARGE CENTS from 1793 to 1814. The series of CENTS from 1816 to 1857 was condensed from several books also and was written by Howard Newcomb (Stack’s published it in the mid-1940s). The book had hand-drawn illustrations for each date and variety, along with a description of how to identify each one. Included with each listing was the author’s opinion as to rarity, expressed in a rarity scale.

No numerical grade was used, as the Sheldon system was not developed yet.

Numerical Grading Adopted by the New Grading System

So grading for the most part remained ADJECTIVAL until the American Numismatic Association (the ANA) and ANACS (the ANA’s grading service) started using letters and numbers as an alternate way to express a coin’s grade. This system had its faults but it did provide another way to grade a coin. It was used infrequently as the numerical grading system hadn’t been fully implemented when first used.

Besides, collectors still liked the old-style grading descriptions, where the grade was abbreviated in letters and then amplified with additional words like ‘choice’, ‘very choice’, ‘gem’, ‘toned’, ‘full lustre’, ‘About’ and so on to give the grader more latitude in expressing his opinion.

When grading services by two private companies entered the field, with coins encased in plastic holders, they found that the shortest way to express a grade was basically two letters and two numbers. However, they did not stick fully to the Sheldon System, especially in the Mint State grades where Sheldon used 60, 63, 65 and 70 (with 70 as Sheldon expressed it as virtually unattainable).

To give an example as to how the grading services used numbers, a coin that was About Uncirculated would be abbreviated as AU 55, and a Choicer example as AU 58. The difference was just the opinion that a grader felt a coin was somewhat nicer but that it had enough wear that it could not be considered as a fully Uncirculated (or Mint State) coin. The two letters and two numbers replaced adjectival grading in writing or printing on the label inside the plastic holder.

The grading services have since added a range of numbers using all the values from 60 through 70, and to many collectors the differences between the higher numbers such as 67, 68, 69 and 70 are hard to discern. The numbers are therefore somewhat arbitrary, reflecting the opinion of the grader and sometimes subject to objective debate.

This is an outline as to how numerical grading evolved. However, I learned about grading from the thousands of collectors I served over the counter at Stack’s, and got to know on a first-hand basis what the collector was looking for, what pleased him and what didn’t, and therefore bought those that fit the criteria for his own collection.

What Pleases the Buyer Is What He Acquires

To further explain the “what pleases the buyer is what he acquires” way I learned over the past 70 years of dealing with collectors, let me tell you a story that occurred in the early 1950s. It is a lesson in understanding a collector’s desires that has stuck with me all these years.

I was sitting in the front-rear desk space of the Stack’s offices when a gentleman walked in, looked about and sat down at the counter. He wore a heavy herringbone coat that had to be more than a decade old and had on his head a wide brim hat with a sweat stained band. I immediately wondered who he could be.

My father and uncle, both at the front end of the counter, looked up, rose quickly and rushed to say “Hello” to the visitor. They chatted a moment or two, and my uncle came back to where I was and asked “Where is that lovely About Uncirculated 1795 Flowing Hair Dollar I bought earlier this week?”

I replied, “Right here in front of me as I was rewriting the envelope.”

My uncle took it from me and walked it back to the front and showed it to our visitor. The collector looked at it carefully, held it by the edge, turned it from front to back and continued to gaze at it.

I heard him say “I will take it!” He then asked something I couldn’t hear and when my uncle came by my desk a little later I asked quietly, “Who are you and Dad working with?”

My uncle whispered, “That’s Lamont Dupont!”

“Gee,” I said, “why didn’t you show him the Uncirculated one I bought this morning?”

My uncle said “HE WOULDN’T BUY IT! Look over and watch as he holds the coin in his fingers, by the edges, and then he stares at it for a few moments, and as he always told me, he liked a coin with a bit of wear, a slight but minor scratch… one that could have been handled by some famous person in history. He would say to me that this could have been in the pocket of Washington, Jefferson, Franklin or some early colonial person. They had the largest coin in their hands at one time, didn’t need that much to buy, say, a loaf of bread when a loaf of bread sold for a half a cent or maybe a bit more, so they kept the coin in their pocket and sometime put it into circulation. And then it went through some other hands, rarely used but touched by them, so it has minor evidence of wear, and now I have it over 150 years after it was struck, so in its way it speaks to me and I think it might been handled by a forefather.”

For the record, the About Uncirculated coin was priced at $45.00 and the Uncirculated was $65.00; no big difference to a collector of Lamont Dupont’s wealth. He bought what he liked.

“Wow,” I said, “so does he feel the same about Pedigreed coins?”

“Of Course” replied my uncle. “He likes coins of the 19th century with known earlier owners, ones whose collections are now available at sale, who put together a group, added to it, and became noted as being the earlier owner. And of course, the previous owner might have got it from an earlier well-known collection, and that relation to its past is what attracts Mr.Dupont when he acquires coins.”

My uncle continued.

“Like many collectors you have already met and spoken to, each has a desire to own certain coins, either to complete a set, add to what they are building or just wanting to own it. Each coin seems to convey a message to its new owner, and that ownership is part of the PRIDE OF POSSESSION!!!!”

That chat, which occurred nearly 70 years ago with my uncle, has made me appreciate collectors and their desire to own. And I will always remember that to the collector —


And to define a collector as “someone who wants to have something as good as he has seen, a bit less than he has seen, or better than what he has seen others have”.


Stack's Bowers
Stack's Bowershttps://stacksbowers.com/
Stack's Bowers Galleries conducts live, internet, and specialized auctions of rare U.S. and world coins and currency and ancient coins, as well as direct sales through retail and wholesale channels. The company's 90-year legacy includes the cataloging and sale of many of the most valuable United States coin and currency collections to ever cross an auction block — The D. Brent Pogue Collection, The John J. Ford, Jr. Collection, The Louis E. Eliasberg, Sr. Collection, The Harry W. Bass, Jr. Collection, The Joel R. Anderson Collection, The Norweb Collection, The Cardinal Collection, The Sydney F. Martin Collection, and The Battle Born Collection — to name just a few. World coin and currency collections include The Pinnacle Collection, The Louis E. Eliasberg, Sr. Collection of World Gold Coins, The Kroisos Collection, The Alicia and Sidney Belzberg Collection, The Salton Collection, The Wa She Wong Collection, and The Thos. H. Law Collection. The company is headquartered in Costa Mesa, California with galleries in New York, Boston, and Philadelphia. Offices are also located in New Hampshire, Oklahoma, South Carolina, Virginia, Hong Kong, Paris, and Vancouver.

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  1. A lovely reminiscence about the good old days of coin dealing!

    One minor correction; Howard Newcomb did the book on large cents of 1816-1857.

    Another minor correction; the Sheldon system that the ANA adopted in 1977 only included the Mint State grades of 60, 65 and 70. When I started the grading add-on to the existing ANACS authentication service in 1979, I added MS-63 and MS-67 because we realized that MS-70 was virtually unobtainable (nobody in their right mind would ever submit a modern coin, right?) ,and two functional Mint State grades were not enough.

    Tom DeLorey


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