PCGS The Standart for the Rare Coin Industry

After a typical coin is struck it is mechanically ejected from the dies, and slides down a chute or tube into a metal box, where other coins are heaped on top of it. By this time the coin, if viewed under magnification, is apt to have a number of nicks and abrasions. From this point the coin is dumped from the metal box into a large storage bin, during which process the piece comes into contact with numerous other coins. As each bin becomes full it is taken to another area of the mint where it is unloaded, and the pieces are fed into a mechanical counting machine, which jostles the coins even more and imparts additional abrasions. The coins are then run at high speed through a mechanical counter, after which they go through a chute and are dumped into cloth bags and stored. The cloth bags are not handled with care and are piled upon each other. The bags are put into a safe storage place, until they are called for to be shipped to Federal Reserve banks or other locations, to which places they are typically shipped by motor freight.

Coin storage and distribution. The Federal Reserve system distributes bags of coins to member banks, which often place them into circulation either as loose change or by running them through mechanical devices which count and wrap them (creating bank-wrapped rolls). To this point the typical coin has not been in circulation, nor has it been touched by human hands. However, it may have acquired enough nicks, scratches, and abrasions that it would barely make the grade MS-60! I remember seeing a bank-wrapped roll of 1958 Philadelphia Mint Jefferson nickels in which there wasn't a single coin I would grade better than AU-58, and yet the coins had never been in circulation! Perhaps from a technical viewpoint they were indeed Uncirculated, but no knowing buyer would have bought them as such.

The larger and heavier a coin is, the more susceptible it is to receiving abrasions and other handling marks. When in the 1970s the General Services Administration distributed Treasury-stored Morgan dollars, which had been kept by the government since the 1870s and 1880s in many instances, purchasers often found that the coins were heavily nicked, scratched, and abraded, although the pieces had never been out of government hands and had not circulated. Such issues as 1893-CC and 1895-S in particular are usually seen with extensive contact marks.

In general, a Morgan silver dollar, a Saint-Gaudens double eagle, a Liberty Seated half dollar, or some other large and relatively heavy coin will have more bagmarks and abrasions than a small, light coin such as a silver three-cent piece, half dime, dime, or gold dollar.