By Rob Lehmann
I know that much has been written about grading uncirculated coins, most of it very specialized and analytical. I wanted to address grading as a much more generalized topic, and give some basic guidelines that would have multiple applications across the numismatic spectrum.
There are three major components of grading a coin: strike, luster and surface preservation. There are also many individual characteristics of each of these three components. Let’s examine each component and its individual characteristics in detail.
Perhaps no single area of grading has more impact on the value of an uncirculated coin than its strike. This is especially apparent in series like Mercury Dimes that are collected with “full bands”, Standing Liberty Quarters that are coveted with “full heads” and Franklin Half Dollars with their elusive “full bell lines”. A 1953-S Franklin Half Dollar with full bell lines recently realized $69,000 in auction, where a counterpart without the bell line definition would have brought several hundred dollars, at best. The same can be said for dates of the Standing Liberty Quarter series in full head such as the 1918/7-S, 1919-D & S, 1926-D & S and 1927-S, to name a few. Then, there is the 1945 Mercury Dime which has a value of $50 or so in MS-65. Add split bands to the equation and your value skyrockets up to $7500! So, what makes strike such a prized component, and how do I evaluate it in the overall grading equation?
First, to answer the above question, you need to come to grips with one very important truth. Grading is subjective, and no matter how good the grader, is NEVER 100% consistent. With that said, I would say that strike accounts for 20-40% of the overall grade depending upon the individual circumstances. Is it the most important single component of grading? In my opinion, no, it is not. I reserve that distinction for luster, which I will address in a short while.
Evaluating strike can be somewhat tricky, especially if one is not extremely well acclimated with a particular series. A fully struck coin is the result of several things coming together in harmony. First, and most importantly, a fresh, sharply impressed die is imperative. Secondly, and closely related to the actual die impression, is the die state. A worn die with flaws, such as cracks, will produce an inferior struck coin to a newer die. Finally, the striking pressure of when the die contacts the planchet also plays an important part.
Quite often, first year type coins are extremely well struck. Examples that come to mind are 1892 Barber coinage, 1878 Morgan Dollars and 1948 Franklin Halves. It’s almost as if the U.S. Mint is proud of their product when it comes out of the gate, and puts forth an extra effort in the production process. This is just a hypothesis and would warrant further study to prove conclusive. But, the truth is this. Lousy strikes result from either poorly engraved dies, worn out dies or inadequate striking pressure, all of which are controlled at and by the United States Mint.
Where strike may be the most value-related component of grading, I would submit that luster is the most technical-related aspect. In other words, professional and amateur graders alike place more of an emphasis on the luster of a mint state coin in ascertaining its grade than either strike or surface preservation. I’m going to go out on a limb on this one and say that luster will comprise 30-50% of the overall grade of a coin, and a dull coin could NEVER (under any circumstances) be considered a GEM.
How does luster occur? Luster is the byproduct of light reflecting off of flow lines. Flow lines are the microscopic, symmetrical lines that are caused when the die strikes the planchet of the coin under pressure. These little raised lines result when the planchet’s metal flows outward from the central pressure of the die. As light comes in contact with these flow lines, it literally dances off of the surface of the coin giving us an effect that we call luster. When the die is heavily polished, this effect can be intensified. The polish transfers to the flow lines making them even more reflective and the luster more pronounced. Most new dies are heavily polished. Keep in mind, newer dies have little or no wear. Consequently, a new, polished die with no wear is much more likely to produce a GEM quality coin than an older die with little or no polish evident.
Since the highest points of a coin are these microscopic flow lines, they are also the areas that wear first. Luster will discolor or burn long before any wear is evident to the actual design elements. This is precisely why most graders place such an emphasis on a coin’s luster. Luster is directly correlated to the coin’s originality or “freshness”, and hence is the single most influential component in assigning a technical grade.
Surface preservation is probably the easiest of the three components to both evaluate and explain. Simply stated, surface preservation is a quantitative way of evaluating imperfections that occurred to the coin’s surface during or after the minting process. Most of these imperfections are relatively easy for even a novice to spot, although their origins are not always quite as easy to explain.
Some examples of coin imperfections would be reeding marks, raised die polishing lines, planchet flaws, struck-through materials, nicks and scratches. While some of these things happen during the minting process (die polish and planchet flaws), others happen after the fact (marks, scratches and other abrasions). Nonetheless, imperfections are always considered a negative and impact the grade, sometimes considerably.
How much consideration should be given to surface preservation? I would suggest that surface preservation can negatively impact a coin to a far greater degree than it can help the coin achieve GEM status. The sad truth is (as I stated earlier) that no matter how clean a coin’s surfaces are, it could never be considered a GEM without full booming luster and at least a decent strike. A good example that comes to mind is an 1892-O Morgan Dollar that I bought a few years ago from a local collector. This coin did not have a discernable mark anywhere on it. It was also free of hairlines or any other surface imperfection. Although it was a strictly an uncirculated specimen, it also had the dullest luster imaginable combined with a “pancake” strike. When the coin was submitted to PCGS for grading, it was assigned a basal uncirculated grade of MS-60 despite its remarkable surface preservation. Conversely, a coin with booming luster and a full strike that is riddled with bag marks may not achieve a grade of over MS-60 either.
A pitfall that many beginning collectors make is to place way too much emphasis on surface preservation. Yes, it is a component of the overall grade. But, it is by no means the single determining factor of the overall grade. Because you could never have a GEM or even a CHOICE uncirculated coin with numerous surface imperfections, surface preservation IS important. But, in the overall scope of things, I do not believe that it can positively influence the grade of a coin by more than 20-40%.
This is a very basic discussion of the factors that determine the grade of an uncirculated coin. By looking at the nuances of a particular coin or series, I could go into far greater detail. However, that was not the goal or the purpose of this article.
Hopefully, this general oversight has been helpful in explaining some of the basic terms and concepts behind grading uncirculated coins. Since understanding coin grading is imperative from both a monetary and technical standpoint, further research into this subject is greatly encouraged.