Contents* Standard International Coin Grading Terminology
* Definition of Coin Grading Terms
* In-Between Grades, Split Gradings and Additional Descriptions
* Grading Examples
* Proofs, Patterns and Specimens
* Grading Banknotes
* Grading Services and the 'Slab'
Standard International Coin Grading TerminologyA great deal of subjectivity surrounds the 'art' of establishing a coin's grade or condition. Invariably, the seller will err on the higher side while the buyer will find any number of blemishes, hairlines or weak spots to lower the grade. To bring some degree of 'science' or objectivity to this process,
standard classifications and descriptions have been established. The following table sets out the equivalences between various grading scales used throughout the world in assessing the state of preservation of a coin or medal. Their meanings, along with common derivative grading terms, are explained in the next section.
Definition of Coin Grading Terms AustraliaProof Technically, the term proof refers to a coin's method of manufacture, not its state of preservation. However, in reality, the term is used in grading to describe a pristine example of a proof manufactured coin. Lesser graded or damaged examples are described as impaired proofs.
Brilliant Uncirculated Also referred to as FDC (Fleur de Coin - flower of the die). Although struck with normal dies, a coin described as BU is pristine, almost prooflike in appearance, being perfectly sharp, absolutely flawless and showing no signs of wear or bag marks. On the US grading scale, such a coin is described as MS-65. Grading at this superior level has become more complex in recent years with distinctions being made in many catalogs between (from
highest to lowest state of preservation) - FDC, GEM Uncirculated and Choice Uncirculated.
Uncirculated A coin which shows no signs of being in circulation. Coins in mint rolls are classed as uncirculated. Due to high-speed production techniques, even uncirculated coins may show slight imperfections such as minor bag marks or tiny rim indentations, especially on larger coins.
Extremely Fine or Extra Fine (EF or XF) Under magnification, these coins show only the slightest amount of wear in addition to slight bag marks. Wear will be confined to the very high points of the design and the natural mint lustre common to uncirculated coins will be still almost intact.
Very Fine (VF) Slightly more wear will be evident without magnification but the coin is still in a high state of preservation. A magnifier will show numerous light scratches over the high points and on the fields of the coin. Most of the high points will be affected and only traces of the mint lustre will be present.
Fine (F) Considerable signs of wear will be apparent on raised surfaces and the fields of the coin will be quite dull. Almost all sections of the coin will exhibit some forms of wear. Generally there will be no traces of lustre and the rim border will be smooth in parts.
Very Good (VG) A strange description for a coin which is rather ordinary. If you see a coin for sale described as 'circulated', you should assume that this is the best it will grade. The whole of the coin is showing significant amounts of wear although all of the main detail is still visible. Usually only scarce coins and those of historical significance are worth collecting in this condition.
Good (G) Again, the wrong word to describe the state of preservation of the coin. Nearly all the fine detail is lost although most of the main detail and lettering is still visible. The surface of the coin will be showing considerable scratching.
Fair This coin is really showing its age or abused life. The design, including most of the main features, have disappeared through many years of handling. At best you can still make out the issuing country.
Poor You can tell what shape the coin is, but that's about all. There is virtually nothing left to see - definitely scrap value only.
In-Between Grades, Split Gradings and Additional DescriptionsMany dealers, in catalogs and advertisements, use in-between grades such as nUNC, aVF or gVF.
A coin described as aVF (almost VF) is one not quite up to VF standard but pretty close to the mark. It might also be described as F+ or nVF (nearly VF).
A coin described as gVF (Good VF) meets all the requirements of VF condition and then a little more. It could also be described as VF+ or, if it were a little better still, aEF.
The following table of in-between gradings, with their approximate percentage grading equivalents, may be useful:
Where the condition on one side of a coin varies from that on the other side, it is common practice to report the two gradings separately. For example, a coin described as VF/nVF has an obverse in
Very Fine condition while the reverse has slightly more wear and grades just below VF.
When split gradings are used, it is common practice to state the condition of the obverse first and the reverse second. Another common practice is to indicate a range. This is normally used where a number of coins are offerred as a lot. For example, EF-UNC indicates the coin(s) grade between
both those classifications.
Another good practice in grading coins is to describe abnormal features of a coin as well as the
overall grade. Examples include:
* EF+, lightly toned
* aUNC, tiny rim nick on reverse
* VF, washed, retoning
* nEF, 8 pearls (see below for details) ...
Grading Examples
King Edward VII's 1910 Australian coins: Checking the obverse first, look at the horizontal bands at the bottom of the King's Crown. To be UNC they must contain 8 dots (known as pearls), the centre diamond and the horizontal bands of the two rectangular blocks must have rounded surfaces without any signs of wear, as must the King's eybrow, nose tip, beard and moustache. The robes, regalia lettering and rims nust not exhibit any signs of wear.
On the reverse, check the Emu's feathers, the Kangaroo's shoulder and haunch, the ribbon and lettering of Advance Australia. Even under magnification, no wear should be visible. Check also the rim and legends. The star should be sharp but sometimes it is 'Softly Struck' due to filled dies. To be uncirculated, all of these highpoints must be free of wear. They may have knicks, dings, dents and scratches but these must be mentioned and unless they occurred in the minting/shipping process, the coin should be down priced.
Coins of 1910 will probably show toning which is a patina of age above the underlying lustre. An attractive toning will add a premium to coin pricing for experienced collectors, while many novices will shy away, not understanding this natural protection to coins.
'Near', 'About' and 'Virtually' UNC (nUNC, aUNC & vUNC) all mean that the coin shows minute signs of wear only on the high points mentioned above. The wear should be so little that magnification is necessary to detect it. For nUNC and aUNC coins, the percentage scale would be 98% while Virtually UNC coins would grade slightly better at 99% - ie. only the faintest hint of wear shows up under magnification.
For an EF coin, wear is still minute but slightly more apparent. The Crown's 'jewels' remain intact, the portrait high points show slight wear. The Emu's feathers remain clearly defined and the Kangaroo's limbs remain rounded. EF score is 95%, EF+ scores 96% or better while
nEF scores 92% to 94%.
Wear becomes easily visible on VF graded coins in the design areas and also, frequently, in the open areas (fields). The pair of pearls to the right of the diamond (known on 1910 coins as the 'Second Set of Pearls') are usually, but not always, smudged flat, leaving the other 'jewels' intact but slightly flattened (the 'Second Set of Pearls on George V coins are
immediately to the left of the centre diamond). The obverse highpoints of eyebrow, beard, nose, moustache tip and parts of the regalia are also slightly flattened. On the reverse, the Emu feathers are rounded and individual feather groupings are generally not visible while
the Kangaroo's limbs and Advance Australia ribbons show some wear. VF rates a minumum of 70%, VF+ at least 85% and nVF from 65% upwards.
Fine coins show considerable wear with much of the detail obliterated. The centre diamond has usually disappeared and all the high points are worn. The Emu's feathers have moulted and the Kangaroo is nearly flat. Score F as 45% while F+ rates 55% minimum and nF at least 40%.
VG and G coins show continued wear resulting in the Crown's two horizontal bands
displaying only at the ends, with the centre diamond long gone. Advance Australia on the reverse is readable on VG coins but mostly obliterated on G coins. VG rates 25% with adjustments for Plus and near. Good rate 10% with plus and minus adjustments not really adding much information to a bleak looking coin.
The condition of the Star on the reverse rates a special mention as this part of the design is often not fully 'Struck-Up' - especially on 3p and 6p pieces due to filled dies. Sometimes the die steel was of inferior quality resulting in poor quality strikings. In other cases, incorrect die pressure settings resulted in a 'Soft Strike'. Where this occurs, split gradings are used.
The grade EF/UNC is a common one on 1910 coins because the obverse side is often not struck up.
King George V 1911-1936 Australian coins: On George V coins, the layout of the bands on the crown is similar to that on Edward VII coins. Again, this is the first point of inspection. Once again there are 8 dots or pearls , a centre diamond and two rectangular blocks inside two horizontal, parallel perimeter lines.
The first signs of wear appear on the two pearls to the left of the diamond (strangely called the 'two front pearls'). With more use, wear continues onto the diamond and parallel lines, then onto the pearls to the right of the diamond and onto the two rectangular blocks until eventually all design is worn away. Attention must also be paid to the eyebrow, nose, moustache, beard, ear and robes.
Take notice also of wear on the rim and in the lettering (legend). The gradings and percentages used remain constant with those described earlier for Edward VII's coins.
1937-1938 Australian Crowns: On the reverse of these coins at the very top of the crown is a cross with a circle (or 'Orb') below it. On this circle is one vertical and one horizontal band which form another, very light, cross. This light cross should be checked for wear.
The next point to check are the nine pearls lined up vertically below the Orb. Are they rounded or do they show any sign of flattening ? On each side of the pearls is a vertical line known unofficially as a 'Spire'. Each has a raised line running down the centre referred to as a 'Flute'. Check the Flutes for wear. Look also at the rims and denticles for any wear, rim ricks, chips, bumps or bruises.
If there is absolutely no wear on any of these high points - a magnifying glass should be used to check - then the obverse side may be graded UNC. Before assigning that grade, check the fields and designs for scratches, wear, abrasions and porosity of the surface. Circulation coins drop from the minting presses into containers which may cause indentations to occur. 1937 and 1938 Crowns were distributed throughout Australia to banks by ship and rail. During transportation, particularly because of the large size of the crowns, it was common for 'Bag Marks' to occur . The grading is still UNC if only bag
marks and no other wear is found - the coins description would be something like - UNC with bag marks or UNC with rim nicks. However, unless the coin still has full lustre (even under surface patina or toning), it should be graded downwards.
On the obverse, the highpoints to check include the King's hair, top of ear, eyebrow, nose, jaw line and neck, plus the rims and legends. Do the combing lines in the hair stand out clearly ? Has the eyebrow been flattened ? Is the lobe of the ear worn or damaged ? Are their marks in the field ?
Once you have mastered the art of these examinations, grading the coin should become less of a black art and more of a science. You will be in a much better position to negotiate a reasonable price based on the evidence of wear displayed by the coin, not on the seller's powers of persuasion with an eye towards a fast buck.
Proofs, Patterns and Specimens.Proof coins represent the very best of the minter's art. Today, they are manufactured from hand-polished dies, are virtually flawless and are superby presented in customised packaging, with strict limits on production.
Originally they were trial coins, hand struck at the start of a mintage, in order that any flaws could be detected and rectified. Then they became a special sample, kept as an example of each mintage. Today, they are considered numismatic coins - of interest to coin collectors - and are sold at fixed prices consistent with their quality and rarity.
For most Australian pre-decimal proof and pattern issues (particularly gold sovereigns and half sovereigns), mint records were poorly kept. Confusion has resulted from references to Proof, Pattern and sometimes Specimen coin strikes, all of which seem to have similar qualities. To overcome these description difficulties, a proof or specimen coin is now defined as a specially prepared coin which also has normal circulating coins issued with the same date and die types. On the other hand, a Pattern is an issue of a particular date and die
types for which no circulating coins were issued. Patterns may, and often do, show slight differences from circulation issues as they were usually intended as examples of a change in proposed design, manufacturing process or composition.
Modern proof coins are minted from highly polished dies using specially prepared blanks with a bright surface. Extra pressure is used to strike the coin and often the blank is struck more than once. They are the result of a number of labourous processes. Firstly, the die surface is sand blasted and hand polished using diamond lapping paste applied with soft wooden sticks. A final polish to produce a brilliant mirror finish is achieved with a dental drill covered with a soft pad. Next, the surface of the die is covered with clear tape and a scalpel is used to expose the design areas. Again the die is sand blasted resulting in a frosted finish on exposed design areas. The final process is for the die to be crome plated before being used to strike coins.
The blanks intended to become proof coins are also given special treatment. Prior to striking, they are immersed in a weak acid bath to remove any surface impurities. From that point on, they are only ever handled with gloved hands or special tongs to ensure that the surfaces remain pristine.
Grading Banknotes.Five characteristics are examined to accurately determine the state of preservation of a banknote. They are the state of cleanliness, the severity of folding, the state of the surface, the state of the edges and the severity and number of any punctures or pinholes on the note.
A points system is used where each characteristic is scored out of 20 - the maximum score for an absolutely pristine note being 100. Grading points are as follows:
The following table describes scoring process used for each characteristic:
Grading Services and the 'Slab'In the late 1980's, a new innovation, the so-called slab, was introduced in an attempt to remove the subjectivity surrounding grading. Used particularly by investors, high value coins and other numismatic pieces are forwarded to a recognised, independent grading agency for evaluation. Along with a grading certification, each item is then sealed within a 'slab' of inert plastic.
Officially known as 'Encapsulated Numismatic Products', slabs were intended to promote investor confidence and enable the purchase and sale of numismatic items, sight unseen. In the U.S.A., the practice has enabled Wall Street companies to confidently trade in numismatic items through the investment market, with the actual item being traded remaining locked away in a bank vault.
The practice has its critics. Many believe that the entry of large scale investors into the numismatic market has pushed up prices to the point where genuine collectors are being pushed out.
Further, controversy of grading continues. Dealers and investors have been known to send a piece to several different grading services, seeking that slightly higher grading which will add hundreds or even thousands of dollars to the value of the piece.
One advantage of the slab is that market forces have helped to reduce the gap between the buying and selling price of items - the dealer's margin. This, however, is more than offset by the increased volitility of investment market driven valuations. Alongside the more
established benchmarks of valuation - rarity and condition - the criteria of market forces has made numismatics a much more complex hobby.
Sources:
NUMI$NEWS Magazines - Sept, Oct, Nov, 1996 - M. R. Roberts, Wynyard Coin Centre,
'Rigby's Coin and Banknote Guide' by Greg McDonald - 1983,
Renniks Australian Coin and Banknote Guide by Dion H. Skinner - 1980.
Posted 03/02/2006 05:39 am
