A History of U.S. Rare Coin Grading

This issue, we begin a ten-part series on the history of U.S. coin grading. We'll cover everything from the birth of U.S. coin collecting in the late 1850s to today.

The last half of the present decade represents the 150th anniversary of the birth of the U.S. Rare Coin market. While there were a few isolated collectors prior to the late 1850s, it was during that period that the first group of U.S. rare coin auctions took place in New York City and Philadelphia. In particular, the Cogan and Levick sales of 1858-1860 established a viable market for U.S. coins. It's interesting to note that some of the attendees were likely alive when the first U.S. coins were struck in 1793.

This first organized exchange of rare coins necessitated some form of communication as to the state of preservation of the offerings, and these inaugural auctions contained some terms that are very familiar to modern-day collectors. Coins were described as Proof, Uncirculated, Very Fine, Fine, Very Good, Good, Fair and Poor. A close reading reveals a few less familiar and more perplexing descriptions as well, including Splendid, Almost Proof, Slightly Circulated and Excellent Impression. These last "grades" notwithstanding, the vast majority of the offerings were described using the conventional grades familiar to us today.

While no description of what qualities a coin needs to have to qualify for "Very Fine" for example, George F. Jones' Coin Collectors' Manual of 1860 sounded an all-too-familiar refrain when it noted that "Allowance must be made, in some cases, as to the condition of the coins sold; as for instance, what one may call 'Uncirculated,' others would only denominate as Fine or Very Good."

Later in the book, Jones commented, "It is a matter of regret that there is such a diversity of opinion with regard to the condition of a coin. There must be an absence of prejudice and interest in the coin in question, in order to give a fair report of it; and at times, even experienced collectors and dealers will disagree." That could have been written yesterday!

32 years later, in 1892, Joseph Hooper proposed a 12-point numerical scale in the February issue of The Numismatist that ranged from Mint Brilliant Proof down to Very Poor.

One characteristic of the early scales was the greater emphasis on the lower grades. Four of the twelve grades in Hooper's scale were below "Good." Obviously coins have not improved in the past hundred years, but salesmanship has, and calling something Fair or Poor is no way to sell it. It is likely many of the coins described in the late 19th century as "Fair" or "Very Fair" would likely be closer to "Good" or "Very Good" today.

For the next 40 years, relatively little progress was made towards standardizing terminology and establishing clear guidelines aimed at impartially grading a rare coin. Auctioneers and dealers simply looked at a coin and applied a few selected adjectives. Perfect Uncirculated, Sharp Uncirculated, Brilliant Semi-Proof, Shade from Uncirculated, Nearly or practically Uncirculated and Uncirculated with light cabinet friction were among the free-form "grades" found in early 20th century sales. Occasional editorials or letters advocating a standardized or uniform scale appeared in hobby publications, but such efforts would not bear fruit for many years.

From the 1910s through the 1930s, the most widely circulated numismatic "price guide" was the Star Rare Coin Encyclopedia and Premium Catalog published by the prominent Texas dealer B. Max Mehl. In it, he devoted a page to grading, listing six basic grades. Proof, Uncirculated, Fine, Good, Fair and Poor. Oddly, his descriptions of "Fine" and "Good" were identical. They were described as "coins that have seen considerable circulation, but every feature of the coin must show plainly. It must not show any bad scratches or nicks."