Grade Inflation? 1 1

[Sandon]

   Back in June 1988 I attended a local coin show, where I purchased this 1915 Indian Head quarter eagle ($2.50 gold piece), my first coin of this type.  The dealer, who I think is still in business, graded it "AU+" on the invoice he gave me. It was uncertified, as was the norm at that time, which was just a few years after PCGS and NGC had opened for business.

   Because the Indian quarter eagle series in general and the 1915 issue in particular was then and is now plagued by numerous counterfeits--the 1915 is number 12 on NGC's list of "50 Most Commonly Counterfeited U.S. Coins"--I sent the coin to ANACS, which at that time was owned and operated by the American Numismatic Association and issued photo certificates providing an opinion on a coin's authenticity and grade.  These certificates were very popular from the late 1970s to the late 1980s but were ultimately eclipsed by certified holders. Unlike today's certified holders, these certificates stated an opinion on the grade of each side of the coin and the separate opinions of each of the four graders who had examined the coin. Here is the "ANACS certificate" issued for this 1915 quarter eagle:

   I thought that the AU 55 grade given, which was agreed upon by all four graders, was reasonable.  The coin has virtually full detail but light rub and luster disturbance throughout the fields, which are higher on these coins than most of the devices, as well as light wear on the Indian's cheek and the feathers on the eagle's shoulder.

   I recently submitted this coin to NGC and expected a grade of AU 55 or AU 58.  I was surprised to see that NGC graded this coin MS 63.  (The certificate number is #6514146-003.)  This is no trivial difference. While a 1915 quarter eagle in AU 55 lists $510 in the NGC Price Guide, or slightly more than twice my $250 nominal dollar purchase price in 1988, and an AU 58 an only marginally higher $515, an MS 63 has a list price of $1,300!  This coin is just one example of widely different interpretation of grading standards since the 1980s and 90s, including of coins graded by NGC and PCGS in their earlier years, and those apparently used today.

   These substantial differences in grade are usually attributed to differences between the "technical" grading supposedly used by ANACS at that time and the "market" grading used by commercial grading services.  However, the ANA grading standards (in both the 1987 third edition of the ANA grading guide and the current 2013 7th edition) and the NGC coin grading scale at NGC Coin Grading Scale | About Coin Grades | NGC are consistent in that a coin that receives a "60" or higher mint state grade must have no trace of wear. All of the pertinent grades used today were recognized in the 1987 ANA grading guide. (The ANA had adopted the eleven point 60 to 70 uncirculated grading standards and the AU 58 grade in 1986.)  Both the 1987 and 2013 ANA grading guide standards for Indian head quarter eagles state that for the AU 55 grade there will be a "trace of wear" on the Indian's cheekbone and "on shoulder of eagle's left wing", which I think are clearly present here, as well as the rub in the fields. Wear is wear!

 Do any of you have ANACS or similar photo certificates on coins that you have submitted to the commercial grading services and received much higher grades? What are your thoughts on this situation generally?

[Henri Charriere]

Excellent presentation! I believe this to be the first time I have ever seen such a certificate or knew of its existence.

I don't have any "thoughts on this situation," but do wish to direct the reader's attention to the careful distinction ANACS makes as set forth in the line, "in addition to the "numerical grades" several subjective factors of personal preference could be considered differently by others, and may have a direct value on value. (Emphases mine.) These include.... toning...." This is a fine recitation of the facts.   I am delighted your coin merited a monumental grade elevation but I believe anyone feasting their eyes on this delectable morsel would agree this is one special very deserving piece.  

[Fenntucky Mike]

It does not surprise me that this coin came back as MS63, it seems that slight wear will not necessarily hold down a coin from grading MS in today's world. 

I'm not familiar with these but based on the few MS examples I've looked at closely the given grade seems consistent with the other examples. The rub in the fields is more clearly evident in the images as opposed to wear on the cheek and wing.  I wonder if these areas were considered as not fully struck up and the lack of wear in the feathers of the headdress taken into consideration? An outsider looking in observations. 

P.S.

I think this coin grading MS is less of a shock than the 20 pfennig in another thread.

[RWB]

The coin has not changed and from the photos appears to have been correctly graded way back then.

The label has changed to enrich the greedy.

[zadok]

On 4/12/2023 at 8:40 PM, Sandon said:

   Back in June 1988 I attended a local coin show, where I purchased this 1915 Indian Head quarter eagle ($2.50 gold piece), my first coin of this type.  The dealer, who I think is still in business, graded it "AU+" on the invoice he gave me. It was uncertified, as was the norm at that time, which was just a few years after PCGS and NGC had opened for business.

   Because the Indian quarter eagle series in general and the 1915 issue in particular was then and is now plagued by numerous counterfeits--the 1915 is number 12 on NGC's list of "50 Most Commonly Counterfeited U.S. Coins"--I sent the coin to ANACS, which at that time was owned and operated by the American Numismatic Association and issued photo certificates providing an opinion on a coin's authenticity and grade.  These certificates were very popular from the late 1970s to the late 1980s but were ultimately eclipsed by certified holders. Unlike today's certified holders, these certificates stated an opinion on the grade of each side of the coin and the separate opinions of each of the four graders who had examined the coin. Here is the "ANACS certificate" issued for this 1915 quarter eagle:

   I thought that the AU 55 grade given, which was agreed upon by all four graders, was reasonable.  The coin has virtually full detail but light rub and luster disturbance throughout the fields, which are higher on these coins than most of the devices, as well as light wear on the Indian's cheek and the feathers on the eagle's shoulder.

   I recently submitted this coin to NGC and expected a grade of AU 55 or AU 58.  I was surprised to see that NGC graded this coin MS 63.  (The certificate number is #6514146-003.)  This is no trivial difference. While a 1915 quarter eagle in AU 55 lists $510 in the NGC Price Guide, or slightly more than twice my $250 nominal dollar purchase price in 1988, and an AU 58 an only marginally higher $515, an MS 63 has a list price of $1,300!  This coin is just one example of widely different interpretation of grading standards since the 1980s and 90s, including of coins graded by NGC and PCGS in their earlier years, and those apparently used today.

   These substantial differences in grade are usually attributed to differences between the "technical" grading supposedly used by ANACS at that time and the "market" grading used by commercial grading services.  However, the ANA grading standards (in both the 1987 third edition of the ANA grading guide and the current 2013 7th edition) and the NGC coin grading scale at NGC Coin Grading Scale | About Coin Grades | NGC are consistent in that a coin that receives a "60" or higher mint state grade must have no trace of wear. All of the pertinent grades used today were recognized in the 1987 ANA grading guide. (The ANA had adopted the eleven point 60 to 70 uncirculated grading standards and the AU 58 grade in 1986.)  Both the 1987 and 2013 ANA grading guide standards for Indian head quarter eagles state that for the AU 55 grade there will be a "trace of wear" on the Indian's cheekbone and "on shoulder of eagle's left wing", which I think are clearly present here, as well as the rub in the fields. Wear is wear!

 Do any of you have ANACS or similar photo certificates on coins that you have submitted to the commercial grading services and received much higher grades? What are your thoughts on this situation generally?

...yes i have a few of these with the original certs but do not n have not resubmitted for more modern grading by the other tpgs...i was there in 1988-89 n yes their grading was conservative n i would classify as "technical" vs "market"...this series is n has always exhibited wide ranges in grading..."traces of wear" is very subjective so ur ms63 grade does not surprise me....

[Coinbuf]

I own a couple of the old ANACS photo certs, however I was not collecting or submitting to ANACS or any TPG back then, the examples I have were purchased in the past twenty years.   Nor have I (or will I) submitted those coins to a "modern" TPG, grades are opinions and opinions change.   Like a few others I am not all that shocked to see the change in grade, the coin has not changed only the opinion.

I will say that I am not a fan of the current market grading system, I much prefer the way the ANA graded.   Today too much emphasis is placed on the eye appeal and luster while the actual surface condition is second banana.   But it is also true that nobody cares what I think, just like nobody cares or is listening to what Roger thinks about grading today, so rather than scream into the wind I simply note my grade and buy those coins that I like and think are graded to a standard that I can live with.

[Henri Charriere]

On 4/13/2023 at 12:09 AM, Coinbuf said:

....But it is also true that nobody cares what I think, just like nobody cares or is listening to what Roger thinks about grading today, so rather than scream into the wind I simply note my grade and buy those coins that I like and think are graded to a standard that I can live with.

The membership cares and listens to everything. Before I joined, I had never heard the term "cabinet friction" or such-and-such series' dates were always notably weak strikes. Or, some series are graded differently.  There are a few members with considerable experience and are a repository for "institutional experience." We read and remember what they say because their numbers are always diminishing.  One reason why I could reject outright one MS-67 is because, though I need it desperately, it doesn't measure up in any way, shape or form to the handful of others I have and whose features I am intimately familiar with.  The shame is I can provide the proof with a simple side by side photo comparison--but re-grading it accurately is going to cost someone a lot of money.  You yourself are a Lincoln cent collector.  It stands to reason that with the time and investments you've made you may be considered very knowledgeable if not a downright expert. Everyone knows Roger speaks the truth but the truth, very often, is at odds with the party line, prevailing opinion, and is unpleasant because deep down the avid reader know he's right. Why?  Because everything he says is premised in common sense. It takes intestinal fortitude to come right out, go against the grain, and make the kind of controversial statements he is known for.  Unless there is a plausible explanation or exception, the truth though it may be uncomfortable, is irrefutable.

 

Edited April 13, 2023 by Henri Charriere
Die polishing; Addition of thoughts.

[World Colonial]

I own quite a few "older" coins in MS holders, mostly 18th century Spanish colonial pillars from Peru and Mexico.  Under technical grading, I infer most and possibly none are actually UNC.  There are also much older coins, also in MS holders.  I presume somewhere on the coin, there is probably evidence of "handling" over the centuries which if applied universally under market grading, would make grades lower and with it the price level collapse.  I don't own any, but read others write in the past of earlier "AU-66" US coins.

[RWB]

There is a great deal of "numismatic veneer" used to cover basic bologna and obscure, or misdirect collectors from reality. "Cabinet Friction" is one of several such coatings. "Rub" is another. Old-tyme mail order auction sponsor Arthur Kagan loved the term "Virtually Uncirculated" although few others used it. (Composer Charles Ives once responded to criticism about his polytonal and multirhythmic music saying that listeners "Should sit down and take it like a man!" Meaning listen beyond the superficial and accept the truth.)

[LINCOLNMAN]

Excellent presentation and topic. Those of us who have been at this for a while have been nonplussed by the changes. However, the coins themselves are unchanged, so we adapt. Just need to be aware so as not to be disappointed and take care to examine slabbed purchases more critically than we perhaps did 30 years ago.. 

[Henri Charriere]

Grade inflation is one thing, but what about the panoply of ambiguous grades, many faced by the world coin collector who expects dealers to adhere to "defined" preservation standards?   Advertised presently on ma-shops is a coin described as "SUP / BU."  For the unacquainted, SUP, or Superbe, is defined by the French as "from AU-55 to MS-62". [SPL, or Splendide (MS-63 and MS-64) was disregarded completely as was FDC (MS-65-MS-70)].  [BU, interestingly, is defined generically as  Brillant (pronounced bree-YANT) Universal and in English as Brilliant Uncirculated. PCGS further refines the distinctions as, Choice UNC (63-70) GEM UNC and GEM BU (65-70).  NGC uses BU (60-62) CHOICE BU (approx 63-64) SELECT BU (64) GEM BU (65) CHOICE-GEM--SUPERB (67 or even 67; "best of the best". Whew!

I requested a clarification from the German selling a French coin on a German site but doubt I will get one. The easier thing to do is bide one's time until a less inquisitive buyer shows up and then pronounce the case moot, the piece: SOLD.

So, in light of the foregoing, where does Sandon's exquisite Indian fall?  In light of @RWB's steady drumbeat of remarks made over the years, your guess is as good as mine.  [Note:  I believe NGC makes clear that collectors may not hold them to the grades they assign to coins because all are opinions subject to varying interpretations.]

 

Edited April 13, 2023 by Henri Charriere
Usual die polishing

[RWB]

On 4/13/2023 at 5:35 PM, Henri Charriere said:

[Note:  I believe NGC makes clear that collectors may not hold them to the grades they assign to coins because all are opinions subject to varying interpretations.]

Yet several TPGs claim to promote consistency and reliability. Collectors have bought into the scam and trusted the original promises, all of which have been broken. The question should be why do collectors continue to tolerate these abuses, while busily complaining about "gradeflation" and assorted ills?

[Henri Charriere]

On 4/13/2023 at 7:10 PM, RWB said:

Yet several TPGs claim to promote consistency and reliability. Collectors have bought into the scam and trusted the original promises, all of which have been broken. The question should be why do collectors continue to tolerate these abuses, while busily complaining about "gradeflation" and assorted ills?

🤔 

[World Colonial]

On 4/13/2023 at 7:10 PM, RWB said:

Yet several TPGs claim to promote consistency and reliability. Collectors have bought into the scam and trusted the original promises, all of which have been broken. The question should be why do collectors continue to tolerate these abuses, while busily complaining about "gradeflation" and assorted ills?

It's mostly about the money.  If it's their coins, it's deserved and not gradeflation.  If it's someone else's coin, it's someone else's "dreck" holding the value of their coin down.

[mlovmo]

On 4/13/2023 at 11:44 AM, RWB said:

There is a great deal of "numismatic veneer" used to cover basic bologna and obscure, or misdirect collectors from reality. "Cabinet Friction" is one of several such coatings. "Rub" is another. Old-tyme mail order auction sponsor Arthur Kagan loved the term "Virtually Uncirculated" although few others used it. (Composer Charles Ives once responded to criticism about his polytonal and multirhythmic music saying that listeners "Should sit down and take it like a man!" Meaning listen beyond the superficial and accept the truth.)

Yeah, the "cabinet friction" one is quite rich.   It's called "WEAR" last time I checked, and should relegate any "Uncirculated" coin in question with "cabinet friction" to About Uncirculated.  Also, this "cabinet friction" thing seems to be only applied to big-money/"significant" coins, doesn't it?  Graders have NO problem whacking me over the head with reality when I send in for grading those coins that I care about!

[EarlyUS.com]

I have either owned or handled a fair number of the old ANACS photocerts.  Upon resubmission to NGC or PCGS, the grade can certainly go up, but it can also go down.  There is also a decent chance of getting a "details only" grade for some since the old ANACS style of grading seemed to simply "net" problems without noting them separately.  Somewhere around here, I still have one for a 1909-S Indian cent that I used to own, graded VF-30/30 and ultimately "downgraded" by NGC to VF/cleaned.

[Dave1384]

Dear Lord. 
When I saw the initial 2 pictures, I thought, that’s a beautiful mint stater he has there.
I think ANACS missed it.

I agree with the slabbed grade. 

[Sandon]

   First of all, I want to thank everyone who has commented on this topic.  The responses generally fall into three categories.  The first group of respondents are as concerned as I am about the frequent upgrading of coins by top tier grading services even though the applicable grading standards purportedly haven't changed. The second group recognize the issue but are resigned to the grading services assigning grades higher than they would. The third group--numbering just one so far--believe that NGC correctly graded my coin as MS 63 "Choice Uncirculated" and that both ANACS and the dealer from whom I purchased the coin were wrong to describe it as an AU 55 or "Choice About Uncirculated".  This last opinion may be due to the limitation of my photos, which don't show the extent of the wear on the Indian's cheek or the lack of luster and extent of "rub" on the fields of this coin, which for this series and the similar half eagles are among the highest points on the coin's surface.

   The term "About Uncirculated" should mean just that--a coin that is about or nearly uncirculated, with nearly full detail but traces of wear on the coin's highest points. The "AU 58" grade was originally conceived of--I think by Bill Fivaz, the Cherrypicker's Guide author--as a grade for coins that would grade at least MS 63 but for a slight trace of wear. An AU (50-53) or especially a Choice AU (55-58) coin can be quite attractive and desirable, perhaps sometimes more so than a heavily bagmarked or spotted lower end uncirculated coin, but that doesn't make it worthy of an "uncirculated" grade.

   Third party grading services were supposed to act as a neutral arbiter between buyers and sellers of coins who would express an unbiased, professional opinion as to authenticity and grade. However, because the submitters who pay for their services, whether they be dealers or collectors, hope that their coins will get favorable grades and are more likely to make additional submissions if they receive such grades, grading services are inevitably under pressure to be somewhat liberal in their grading.  I recall an advertisement that NGC ran in Coin World back in the late 1980s or early 1990s in which John Albanese, who was one of the original NGC principals, claimed that he had been approached by a group of dealers who had complained about how strictly NGC then graded coins.  His answer to them was purportedly 'THANKS!'"  Unfortunately, it appears that his successors and those at competing grading services have succumbed to the pressure. It doesn't help that many, if not most, of today's buyers of certified coins never learn to grade for themselves and rely solely on the number on that little paper tag.

   For those like me who are familiar with traditional grading standards, the tendency of grading services to give our coins higher grades than we would ourselves creates a moral hazard. I have no intention of selling my coins anytime soon, and they might not be sold during my lifetime. However, if I did sell them, it's unlikely that I (or almost anyone else) would be willing to sell the coins as at a lower grade and substantially lower list price than the one on the holder. This goes for this 1915 quarter eagle as well as for the 1796 Draped Bust dollar I featured in another topic that Bowers & Merena fairly graded F 15 but now resides in an NGC holder labeled VF 25 or the 1863-S double eagle similarly sold to me as XF 45, which an ANACs grader orally opined was the correct grade but is now NGC graded AU 53.  

  Several of you have referred to some of the "weasel words" such as "cabinet friction" and "slight rub" that have been used by dealers to contend that coins with light wear are nevertheless "uncirculated". Another such term is "roll friction", which can be used to refer to signs of coin-to-coin contact on a legitimately uncirculated coin but is also inappropriately used for coins with light wear. Some of you may remember the 1970s British television comedy series Monty Python's Flying Circus. One of its funniest skits is one in which a man is attempting to return a parrot to the pet shop where he had purchased it after discovering that the parrot was dead and had been nailed to its perch to prevent it from "pushing up the daisies".  The store manager insists that the parrot isn't dead but was "just molting" and that the purchaser should keep it because it was a "Norwegian gray" [!] with "beautiful plumage".  A numismatic analogy would be the dealer or grading service that gives a coin an uncirculated grade despite "just slight rub" and points out the coin's "originality" or "beautiful toning." As for my 1915 quarter eagle, perhaps the reason that I see wear on the feathers near the eagle's shoulder is because the eagle is "just molting". 

   

Edited April 15, 2023 by Sandon

[World Colonial]

AU-50 isn't even close to "almost uncirculated".  It's actually an XF.  I've seen a lot of variation on AU-53 and AU-55.

[VKurtB]

On 4/13/2023 at 11:44 AM, RWB said:

There is a great deal of "numismatic veneer" used to cover basic bologna and obscure, or misdirect collectors from reality. "Cabinet Friction" is one of several such coatings. "Rub" is another. Old-tyme mail order auction sponsor Arthur Kagan loved the term "Virtually Uncirculated" although few others used it. (Composer Charles Ives once responded to criticism about his polytonal and multirhythmic music saying that listeners "Should sit down and take it like a man!" Meaning listen beyond the superficial and accept the truth.)

It's "Kagin". Jus' sayin'.

[numisport]

On 4/14/2023 at 10:20 PM, Dave1384 said:

Dear Lord. 
When I saw the initial 2 pictures, I thought, that’s a beautiful mint stater he has there.
I think ANACS missed it.

I agree with the slabbed grade. 

Guess that makes 2 of us. Looks 62 or 63 to me. Really need it in hand though.

[Henri Charriere]

On 4/15/2023 at 6:17 PM, Sandon said:

....I have no intention of selling my coins anytime soon, and they might not be sold during my lifetime. However, if I did sell them, it's unlikely that I (or almost anyone else) would be willing to sell the coins as at a lower grade and substantially lower list price than the one on the holder....

   

I steadfastly maintain the Net Worth of a life-long bachelor (or spinster, if that term has not fallen out of vogue) and a well-heeled gentleman who just died, intestate, are exactly the same: $0.00.

Now, as to selling... Sadly this depends largely on one's immediate circumstances. Sol Wachtler, once New York's chief judge wrote a book and became a paralegal. Robert Blake unabashedly said he needed a job in a post-acquittal sound bite. Bernie Madoff did not serve the term meted out to him in full but did the best he could. O.J. was reduced to stealing his assets but paid a heavy price for doing so. John J. "Whitey" Bulger was apprehended with quite a fortune. So was Saddam Hussein.  I believe it safe to say their respective lawyers made out just fine.

I received two pieces of bad news recently.  Falling a few times, I could not get up. I contracted COVID-19 and had to wait until I tested negative to be treated only to see an item in the paper: while deaths from the pandemic fell, everyone's life expectancy had risen. I believe the people who truly enjoy collecting have a unique outlook on life that goes beyond the intrinsic value of things.

My mother told me I was the richest person in the world.  "You know why, she asked?"  Because everything you love and admire can be found in museums and gardens and you're free to visit your things anytime you want.  I found a wife who is upright, blameless and without sin. The Great z paid me the finest compliment publicly on this Forum in attaining the # 1 rank on my Set Registry and the Hon. V Kurt B stated a gold coin he had been gifted looked mighty fine.  I officially have 24 G20F pieces most comprising the best of the best.  The sets will remain intact.  Like the OP, I have no plans or desire to sell.