A Historical Review of the Sheldon 70 Point Grading System
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Last week the specter of the 100 point grading system for United States coins raised its ugly head for yet another time. My problem with this proposal is that, if enacted, it would cost coin collectors many thousands of dollars to get their coins into new holders that reflected the new scale. This would add nothing to the precision of coin grading and would mostly benefit the grading companies, and the various shippers and insurance companies that might benefit from collecting more insurance and shipping fees.

 

The Sheldon 70 point grading system was introduced in print in 1949 in the book Early American Cents, which was written by Dr. William Sheldon (b 1898, d 1977). Dr. Sheldon was a psychologist. He introduced the now discredited theory that a person's body measurements could be used to determine their character traits. In other words, one's body type determined their destiny. Sheldon thought that he could sum one's destiny with a three digit code.

 

In a somewhat similar vein Sheldon thought that he could develop a way to set the value of each early large cent (1793 to 1814) variety by multiplying a numerical grading number by a basal value for each variety. The numerical grading points ranged from 1 to 70, but not every number was used within that interval. Today we use almost all of Sheldon's grading numbers except for the Mint State range which ran from 60 to 70. Sheldon only used MS-60, 65 and 70. Today we use all eleven Mint State grading numbers.

 

Sheldon's Basal State value was set for a very worn, but undamaged cent that still had enough detail left to determine its Sheldon number. This did not necessarily include a readable date, and I can tell you from experience that one can attribute a fair number of dateless large cents with some work and patience. Coins that were badly corroded, holed or otherwise damaged were worth less than the Basal State amount. Today a coin that Sheldon would have called BS-1 is now called Poor-01 or PR-01.

 

To set the value one simply took the Basal State value times the numerical grade. For example in 1949 the Basal State value for a 1793 Chain AMERI. (Sheldon or S-1) cent was $8.50. There for a coin in Good - 6 was worth $51 or $8.50 x 6. An EF-40 was worth $340 or $8.50 x 40.

 

In 1958 Sheldon published an update of his book which was entitled Penny Whimsy in collaboration with Dorothy Paschal and Walter Breen. The new book acknowledged that there were problems with Sheldon's evaluation system for high grade condition census or finest known coins. He advocated the normal numbers could be doubled or tripled for such high grade coins. That didn't fix the problems. Despite some efforts by expert collectors to apply the Sheldon evaluation system, it has proven to be unworkable.

 

So there you have a brief history. The 70 point system did not succeed in doing what it was supposed to do, but it has been applied to U.S. coin series. You can argue for a 100 point scale, but I don't know what that would accomplish. It certainly would not make coin grading more precise.

 

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The system you describe was proscriptive. My understanding was, Sheldon tried to develop a descriptive system. That is, his seemingly odd choice of 70 was based on what he actually observed in the marketplace at the time. He saw that the nicest coins of a common date were selling for about 70 times what a basal state example sold for - and so he fit his scale to that. If the nicest coins would have been selling for 100x, we would have gotten a 100 point scale. It doesn't really have anything to do with the precision or resolution of the scale - it had to do with the current market value of the coins.

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RE: " the same goes with changing the current system; if it's not broken don't fix it."

 

Or -- to adapt that a little: "If the fix is broken, it won't fix it."

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Oh man. I would LOVE to go metric. Math with measurements is soo much easier in that system.

 

Agreed that changing the grading scale would just take money out of the coin market and put it in the grading companies.

 

What is easier? Do you think the Mint State grades will be 90 to 100? Will AU by 80 to 89? Do you think anyone will be able to apply those each of those 10 AU numbers consistently?

 

This is not like the Metric System for weights, lengths and volumes. Coin grading is as much art as it is science. The 100 point grading will not uncomplicate anything, but it will line the pockets of a the grading services and cause a lot of confusion for coin buyers.

 

When you went to school you had to learn things. What is so hard about learning the 70 point grading system?

 

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I am somewhat intrigued that my comment caused a thread to be started in regards to it....

 

And while I appreciate your post, I am not really sure that it makes a compelling argument as to why the 70 pt system is the best other than, well its been that way for 70 years so we shouldnt change it.

 

And while yes I agree that a change to a 100 pt system would enrich the TPGs I dont see too many on this board, PCGS's board, CoinTalk or any other forum talking about no longer submitting coins or sending already graded coins to CAC for even yet more precise grading opinions. Arent + grades, * designations, truview, the sniffer, security logos and all the other add-ons, upgrades and changes just a way for TPGs to get you to resubmit ?

 

If it doesnt fit you must resubmit...

 

But really what does all of those marketing add-ons and gimmicks really add to the industry as a whole ? Mostly more money for the TPGs. We have as an industry/hobby accepted TPGs, TPG's rates for grading and long wait times to get coins back from them.

 

Would a change to a 100 pt scale really be that different ? I didnt say that the 70 pt system should be immediately abolished. That would never happen. But over time, out-dated obsolete systems are often replaced with better more precise systems. It is the nature of evolution. Unless you are talking about the government, then it seems antiquated ways rule the day.

 

I dont think anyone can actually argue that the Sheldon scale is the best that we have and it can never be improved upon. If someone can, please do. I would like to hear that argument. Please also tell NGC and PCGS to abolish their + grades since they are obviously not necessary and left CAC know that their A,B, C system is a failure as well.

 

Will there be growing pains with a new system, of course. As Im sure there was growing pains 70 yrs ago when the Sheldon scale came into existence. But somehow people still collected coins, people still sold coins and the sun rose the next and continues to rise even to this day.

 

And while yes, grading is an art and not a science, thats not a reason to stop trying to improve on it.

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A 100 point scale would not be an improvement. What is so magical about the number 100? Will make it easier for you to understand it? None of you arguments are compelling at all. All it will do is confuse the issue for years, and make the grading on coins that are in slabs using the 70 point scale invalid. Why do you do want to cause all of this trouble and expense because of your love for the number 100? The Decimal System means nothing in this case. We are not talking about meters, liters or numbers on the Celsius temperature scale.

 

Do you think that more grading points will make grading more precise? It won't because grading can't be made that precise. Experts have different opinions.

 

As for Sheldon grading scale it do not come into use for all U.S. coins until about 1980. Before then it was limited to early large cents. The reason it was accepted then was that that "word scale" (Good, VG, Fine, VF, EF, AU and Unc.) was being abused by creative dealers to confuse the issue. The numbers made things clearer, at least for those who knew how to grade.

 

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I agree with Bill Jones that the 100 point coin grading scale doesn't confer any real advantages and will only confuse the market and collectors. We don't use all of the numbers in the 70 point scale, so why would a scale with more potential divisions be useful?

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A 100-point scale is not "metric" - it is just 100 divisions...that is, it is "decimal." The metric system is built on base-10 multiplication and division of defined units. Individual conceptualization is arbitrary.

 

A "metric" coin grading system would require a single, absolute 'unit of wear' accepted by all and objectively defined. Grades would then fall into powers of 10....all of which would be very unfriendly to collectors.

 

A decimal system is only useful if there are meaningfully-defined waypoints, and they have a logical relationship to one another.

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If collectors accepted the TPGs determinations as gospel the 100 point system would work perfectly, but then so would the 70 point system. The problem is our inability to accept the opinion we pay for, unless it happens to agree with our own.

 

And the problem is not really that detrimental. Considering the subjective nature of grading the 70 point system works pretty well - perhaps as well as can be expected.

 

 

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Im not in love with a 100 pt system but after 70 yrs the Sheldon scale is showing its age and inaccuracies.

 

If it was the best we could do then there really wouldnt be a need a for + grades and CAC.

 

Here's your quote...

 

The reason it was accepted then was that that "word scale" (Good, VG, Fine, VF, EF, AU and Unc.) was being abused by creative dealers to confuse the issue. The numbers made things clearer, at least for those who knew how to grade.

 

If you cant see the same situation is happening now with + and A,B, C coins then there is no convincing you.

 

Perhaps its my lack of ability to grade or my inability to understand what an MS65+ gold CAC "grade" means. Is that a MS66 ? An MS67 coin ? Or is it just a really nice MS65 ? What should be the price on that coin ?

 

However I could much better understand a grade like MS 65.76. If you dont want to go to a 100 pt scale how about just going to hundredth decimal place ? It would certainly allow for more precise pricing. If an MS65 coin is $100 and an MS66 coin is $250 an MS65.76 coin would be $214 (take $150 the difference between the two grades and divide by .76) So an MS65.40 coin would be $160.

 

See rather simple and surprisingly accurate. As a retired dealer, please price the MS65+ gold CAC coin for me (using MS65 @ $100 and MS66 @ $250 and @ MS67 at $500)

 

But of course a more confusing scale only benefits the seller not the buyer.

 

Its really not the difficult to use decimals and keep your beloved 70 pt system though. As I said in the other thread, let the graders give obverse and reverse grades down to the .00 and then average all 6 grades. Then at least you truly then have a consensus grade as opposed to needing a finalizer approve every single grade.

 

It will speed up grading times and basically do away with grading the graders as well as increase the accuracy of pricing. Wasnt this the idea behind the reason for TPGs in the first place ? Accuracy and fluidity in the market, trust and consumer confidence ?

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If it was the best we could do then there really wouldnt be a need a for + grades and CAC.

 

I would argue that there isn't a need for plus grades now. Rather, I believe these were implemented by the grading services to raise revenue. Think about it; after almost 30 years of operation, there are only but so many quality coins that remained to be slabbed. Most revenue is likely from crack-outs and resubmissions. You can increase the latter by adding new designations.

 

If a 100 point scale were implemented, I am sure the TPGs would phase in a + grade and that CAC would still exist and thrive.

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However I could much better understand a grade like MS 65.76. If you dont want to go to a 100 pt scale how about just going to hundredth decimal place ? It would certainly allow for more precise pricing. If an MS65 coin is $100 and an MS66 coin is $250 an MS65.76 coin would be $214 (take $150 the difference between the two grades and divide by .76) So an MS65.40 coin would be $160.

 

Pricing in the coin market is not always proportional to quality (unfortunately) and there are even huge variations at times within the same grade. A Sheldon like scale (grade multiplied by some scalar to price a coin) is not feasible in the current market.

 

I am also curious as to what you think the technical differences might be between a MS65.76 and a MS65.75 or even a MS65.6? How do you articulate those into standards so that they are consistently applied across the board?

 

Think of this situation being analogous to image resolution. The human eye (unaided) can only distinguish in the 0-300 dpi range, and it all looks the same above that point. Do you think a 2000 dpi image is going to be useful unless you are manipulating it, blowing it up for a large publication, etc.?

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The + does nothing but give collectors another opinion to agree or disagree with. CAC does this as well, but it also gives the TPGs incentive to tighten their standards (as much as this is possible). Having more credible TPGs to compete among themselves would produce the same tightening of standards.

 

The more precision you attempt to apply to the subjective the more subjective it becomes. If a 100 point system were implemented it would only be a matter of time before someone would suggest a 150 point system for the very same reasons the 100 point system was advocated.

 

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I am also curious as to what you think the technical differences might be between a MS65.76 and a MS65.75 or even a MS65.6? How do you articulate those into standards so that they are consistently applied across the board?

 

Im not a grader therefore I am not trained to answer your question with specificity. That is left for the experts, no differently then they can articulate the difference between a MS64 and an MS65. Thats what they do.

 

However I am a consumer of the current system and I think its broken. Which of course is only my opinion but that opinion is based on the fact that we now have to have + grades and other companies like CAC grading the graders and being more precise when it comes to grades.

 

If the system worked just fine then there would be no need to add those into the mix. While you are entitled to your opinion, I believe that the use of + grades and CAC like companies seems to support my position as a consumer that the current grading scale is not accurate enough for the market. Market forces have taken us from "Good, VG, Fine, VF, EF, AU and Unc" to the Sheldon scale. Forgetting the 100 pt system and just focusing in on decimal grading to the 100th place, (.00) thats where the market is now moving the industry to.

 

It really is just a matter of time... There is nothing "unworkable" about my theory. It fits well into the current system, its easy for the TPGs to adopt and its provides an accurate baseline pricing model. When you have huge increases in prices for the next grade up and there is a recognition in the industry that there are + coins and A,B, C coins for the grade, there must be some way to accurately price such coins other the subjective opinion of the person selling the coin.

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"When you have huge increases in prices for the next grade up and there is a recognition in the industry that there are + coins and A,B, C coins for the grade, there must be some way to accurately price such coins other the subjective opinion of the person selling the coin."

 

 

 

 

There is - the subjective opinion of the person considering the purchase of the coin. The result you get from these two dynamics is as accurate as you are going to get.

 

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Why all the discussion over numbers? The system is NOT mathematical at all. The grading numbers are only a convenience not something you calculate with.

 

If you think breaking up the grading scale into 100 or 1000 or even 1,000,000 steps will take away the huge price jumps...think again. There will always be a point where no matter what you do where the price jumps. "I want my MS65 not that lousy MS64.999999 and I'll pay to get it!"

 

As to pricing accuracy: Forget it...each coin is unique and will bring the amount that is agreeable to buyer and seller. If the subjective opinion of the seller is a concern: Don't buy the coin! How hard can this possibly be?

 

To me there are some issues with the system we have such as the AU58 vs MS62 "thing" which has never been resolved. Everyone knows a true AU58 will be a much nicer coin that many MS pieces so shouldn't the grading system reflect that? The point where a coin's having been circulated drops it below other less eye appealing coins has always been arbitrary. Why can't "wear" be just another detriment to a coin's preservation like bag marks, lack of luster or poor strike? Whatever the case, the present system doesn't have any kind of "fix" for this...not yet anyway.

 

jom

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"The point where a coin's having been circulated drops it below other less eye appealing coins has always been arbitrary."

 

 

 

 

I do not believe eye appeal should be part of the grading equation. Although I do not believe there is any way to avoid it.

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I am also curious as to what you think the technical differences might be between a MS65.76 and a MS65.75 or even a MS65.6? How do you articulate those into standards so that they are consistently applied across the board?

 

Im not a grader therefore I am not trained to answer your question with specificity. That is left for the experts, no differently then they can articulate the difference between a MS64 and an MS65. Thats what they do.

 

However I am a consumer of the current system and I think its broken. Which of course is only my opinion but that opinion is based on the fact that we now have to have + grades and other companies like CAC grading the graders and being more precise when it comes to grades.

 

If the system worked just fine then there would be no need to add those into the mix. While you are entitled to your opinion, I believe that the use of + grades and CAC like companies seems to support my position as a consumer that the current grading scale is not accurate enough for the market. Market forces have taken us from "Good, VG, Fine, VF, EF, AU and Unc" to the Sheldon scale. Forgetting the 100 pt system and just focusing in on decimal grading to the 100th place, (.00) thats where the market is now moving the industry to.

 

It really is just a matter of time... There is nothing "unworkable" about my theory. It fits well into the current system, its easy for the TPGs to adopt and its provides an accurate baseline pricing model. When you have huge increases in prices for the next grade up and there is a recognition in the industry that there are + coins and A,B, C coins for the grade, there must be some way to accurately price such coins other the subjective opinion of the person selling the coin.

 

We agree that the current system is flawed, but I think this is more the result of market grading than there being a problem with the existing grading scale. That is where much (but not all) of the subjectivity comes in. It is hard to market grade coins for the future, when market standards are prone to change. For instance, I love toned coins among other things. I have several toned coins that were undoubtedly bumped up for color and are blatantly overgraded in terms of technical grade. In the past, the market has cycled through a period in favor of toning and against. In the same way, when the market is poor, standards tend to tighten. When the market is doing well, I think you often see laxer standards. This is generally applicable to all coins. The problem is consistency in applying existing standards and in eliminating fluctuations in market grading. I don't see how changing the grading numbers is going to fix this. I wish it was that simple.

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"The point where a coin's having been circulated drops it below other less eye appealing coins has always been arbitrary."

 

 

 

 

I do not believe eye appeal should be part of the grading equation. Although I do not believe there is any way to avoid it.

 

I should edit my statement: I meant to say "...circulated drops IN VALUE below...." so I wasn't referring to grade necessarily.

 

However, the whole market is mixed up on this. On one end you have people who believe in technical grading but then others want the grade to reflect the value. Very confusing actually. So it is hard to say what a solution might be. I do know that more precision is useless....

 

jom

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Perhaps its my lack of ability to grade or my inability to understand what an MS65+ gold CAC "grade" means. Is that a MS66 ? An MS67 coin ? Or is it just a really nice MS65 ? What should be the price on that coin ?

 

How would the 100 point scale fix this problem for you? It seems to me that you need to spend more time learning how to grade coins. That requires a lot time spent looking at as many properly graded coins as possible. After a while, those with the talent learn how to grade by surfaces, not just the sharpness of the devices. Once you have that down you can grade just about anything using the American system, including tokens and medals.

 

Now of course the British and the members of the Early American Coppers Club (EAC) have their system which muddies the waters, but dealing with that usually involves a bit more strict interpretation of standards plus a refusal to give the higher grade to coin that "barely makes it."

 

Then you get into political grading which involves determining the finest known examples which is whole different issue which sometimes has nothing to do with grading at all. The old adage, "Ownership add 5 points to the grade" comes into play.

 

As you can see grading is complicated, but giving it 100 points or heaven forbid going to one or two decimal points, is only going make things worse.

 

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Bill - nice way to continue to avoid my hypothetical question...

 

Please, as a former dealer, price the coin in the example I gave that you quoted by avoided... I would really like to know how an old time dealer would price such a coin.

 

And we can move off the 100 pt system, I changed it up and now Im onto just the .00 system... evolving ideas...

 

As for grading, I can grade Peace $ in my sleep. Other coins, not so much. Thats not really my concern since I know how to grade what I collect.

 

coinman - well market grading as to go. Its too subjective and thats kinda of my point with my discussion in this thread, all grading is too subjective - Im trying to remove some of that as well the subjectivity of the pricing.

 

So no one has really answered my question about + grades and CAC... it seems as though everyone here loves JA and CAC and thinks that having a little green/gold bean on your slab is just the bees knees. Isnt CAC really just another way to quantify without using numbers the same idea that I presented except that in his system he's using 1/3rds (A, B and C). And really what does a + grade mean ? Is that mean a MS65+ is not quite an MS66 but its nicer then a MS65 ? But how much nicer ?

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Isnt CAC really just another way to quantify without using numbers the same idea that I presented except that in his system he's using 1/3rds (A, B and C). And really what does a + grade mean ? Is that mean a MS65+ is not quite an MS66 but its nicer then a MS65 ? But how much nicer ?

 

CAC ignores the "+" sign so presumably an "A" coin is the same as a "+".

 

How much nicer is a "+" coin than normal? I don't know...I don't see much difference most of the time which is why I think PLUS grading (and any other ideas of adding precision) is superfluous.

 

jom

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I tried to respond to you question, and you have rejected my comments.

 

Here's your answer. Your ".00" grading proposal is unworkable. It is fiction. No one can assign grades with that amount of precision that will be accepted by a broad market.

 

When I was a dealer I tried as hard as I could to sell coins that I liked. When I got coins I did not like, I made an effort to wholesale them to dealers and keep them away from my regular customers.

 

Not everyone agrees with CAC. If you have read my posts, you would know that I am one of CAC's strongest critics. I have taken a lot of heat for that, especially ATS. CAC has disappointed me because of their inconsistencies.

 

There is no such thing as precision grading and precision pricing. Old coins are not like a can of Del Monte peas. Each one is different. A coin can appeal to one collector and not to another. Some collectors pay more; other collectors pay less. The coin market is not like the New York Stock Market. If you want that kind of precision, invest your money there. You cannot set prices with a grading number. Dr. Sheldon tried to do that and failed. You can accept that or reject it. Just don't expect me to applaud your ideas, like the 100 point grading system, when the implementation of them are going to cost me thousands of dollars for no valid reason. I want spend my money on addition coins for my collection, not on slabs and grading.

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I have been thinking about your position on precision grading, TonerGuy? If you name is indicative of what you like to collect, perhaps you have been burned on some toner purchases.

 

I stay away from paying big premiums for the toned coins that the toner guys like. There are a lot of pitfalls in that market, not the least of which is figuring out exactly what given look is really worth. There is no way standardize the price toners in any way. Every piece is different. Some are attractive to some collectors; some are not.

 

Toning can hide problems. It can hide wear and marks, and coin doctors have used it for years to conceal whizzing, polishing and repairs.

 

If this is your real motivation for advocating a 100 point grading system and use of decimal graded, I think you are looking at the wrong solution. It takes years of experience and good eye to do well in the beautifully toned coin market. I'll admit that I can spot them, but I can't price them. I also known that when I'm looking at the purchase of toned coin that I've got to be careful. Toning can hide lots of sins.

 

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Rare coins are not anonymous commodities. That prevents uniform pricing based on some set of "standards." (The commodity approach was tried in the late 1980s and failed.)

 

Put another way, collector coins are priced as individual items as agreed by seller and buyer. This emphasizes the futility of thinking that MS65 is "worth" such-and-such amount of money.

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