A Year-Old Service Has Made the Grade

Perhaps the most compelling issue in numismatics for the past decade is the matter of grading.

This is no small issue. The difference between a coin graded Mint State 64 and MS-65 can be thousands of dollars. Some rare coins change hands for $100,000 and more. These transactions go on daily throughout the United States, adding up to a multimillion dollar industry.

To try to bring some order to the often chaotic grading process, a firm was organized locally last year by some dealers who hope to end the confusion and arguments. The firm, Professional Coin Grading Service, operates out of a high-security, unmarked building in an Irvine industrial park.

How is PCGS doing?

--After one year, it is probably the preeminent grading service available today, surpassing the long-established American Numismatic Assn. in the number of coins graded.

--Since February, 1986, more than 245,000 coins have been examined.

--These coins have a declared insurance value of more than $219 million.

--There is a three-month backlog.

While the Professional Coin Grading Service has caught the fancy of collectors and dealers alike, it is not without its critics. Some contend that grading is an individual decision and no committee or group can satisfactorily decide a coin’s condition. Others maintain that pricing is still the main issue and that two coins graded exactly alike will still not necessarily carry the same value.

Last week I toured the PCGS facilities with Stephen Mayer, director of operations, and David Hall, president. It was a bit of luck, because they were able to show me the first PCGS coin graded MS-70 (considered perfect on a grading scale of 1 to 70). To receive a grade, each coin is scrutinized by at least four graders, each working independently. If they are unable to reach a consensus, then perhaps as many as eight graders will be used. After a grade is assigned, the coded coin is sealed in a tamper-proof holder (pictured) and photographed. Negatives are kept on file.

Obviously, the graders are the key to such an operation.

“There are probably only--maybe--50 world-class graders,” Hall said, “and we employ 16 of them. There are five to 12 working here at one time, eight to 10 hours a day. We think you have to be a dealer to grade coins. If you buy a coin for $1,000 and sell it for $700, you’ve graded wrong. If you buy for $1,000 and sell for $1,100, you graded right. Our graders are also dealers who learned on the bourse (sales) floor, where it’s war, because dealer-to-dealer, there are no rules.”

There are rules aplenty insofar as grading goes. A reference set of coins is kept available for the graders to use in determining the difference, however minute, between an MS-65 and an MS-67. For their expertise, graders are handsomely paid. “They make between $10,000 and $20,000 a month,” Hall said. “Not bad for semi-part-time work.”

Still, these highly paid experts don’t reach unanimity on all matters. The coin recently graded an MS-70, for example, was a $1 silver eagle, the new United States bullion piece. What do these experts think such a coin that probably cost about $10 is worth? Estimates ranged from $250 to $2,000.

“PCGS started,” Hall said, “because of misrepresentation. We’re all long-term professionals. The abuses had to stop. We’re here to serve and protect the public and provide a service for collectors and dealers.

“The PCGS guarantee is that if we grade wrong, we’ll pay the difference between the mistake grade and the real grade or buy the coin at the better-grade price. We’ve paid out $50,000 so far because of mistakes. We’re not proud that we’ve made mistakes. But we’re realists. It’s an acceptable figure.”

It costs $22 to have a coin graded by PCGS. Such coins are traded by all dealers, but can only be submitted through an authorized PCGS dealer. For a dealer list, write to Professional Coin Grading Service, P.O. Box 9458, Newport Beach, Calif. 92658.

Question: I know this is asking a lot. My husband has for many years kept $2 and $1 bills. In silver $1 certificates, he has Series A, B, C, D, G, I, J, Q, U, V; and one with a star. In Federal Reserve, K and a star. In $2 bills he has in Federal Reserve L and D and in U.S. note he has A, D and E.--E.E.C.

Answer: Sorry, but your bills are most likely just worth face value.

Coin News

Yet another pricing guide is available. This one, the “Coin Collector’s Price Guide” by Robert Obojski, covers United States and Canadian issues up to the 1986 Statue of Liberty commemorative and the new Canadian $100 gold piece. It’s limited to a degree, because dollars, for example, are only graded as uncirculated instead of the more accurate grades like Mint State 60, MS-63 or MS-65. However, it’s still useful and handy as a reference and is well-illustrated and contains helpful background information. The price guide (Sterling Publishing Co., 2 Park Ave., New York, N.Y. 10016) is $5.95 in paperback, $10.95 hardcover.

A treatise on the “Coinage of the United States Branch Mints” by Augustus G. Heaton was published in 1893 and helped change collecting habits, because only dates had previously been considered. Heaton’s modest work has been reprinted with an introduction by Q. David Bowers. Copies of the reprint are $4.95 and available from Bowers & Merena, Box 1224-NR, Wolfeboro, N.H. 03894.

Special exhibitions prepared by the Smithsonian Institution will be featured at Sincon XVIII, sponsored by the Society for International Numismatics April 10-12 at the Hyatt Hotel at Los Angeles International Airport. The Smithsonian exhibits include “Medals Given to Revolutionary War Heroes” and “Signers of the Constitutional Convention.” This will mark the first exhibit of most of these items in the Western United States. For information, contact George Russell, (213) 399-1085.

Don Alpert cannot answer mail personally but will respond to numismatic questions of general interest in this column. Do not telephone. Write to Your Coins, You section, The Times, Times Mirror Square, Los Angeles 90053.