Strike, eye appeal affect value

In a recent column I illustrated two Standing Liberty quarters and challenged readers to pick the coin that was assigned the higher grade by a major grading service. It was a trick question used to illustrate the subjective nature of the commercial grading system we use today.

In that column, the coin with slightly more design detail was graded much lower because only one digit of its date was visible. This would not have been a factor with technical grading.

Truth be told, technical grading was not the brainchild of coin dealers. It was developed by two collector/authenticators isolated (some would say in an “Ivory Tower”) from the commercial numismatic market.

The Grading Assistant is a comprehensive tool to assist you with grading United States coins.

At the time, the definition of “Uncirculated” was a coin having “no trace of wear.” Unfortunately, the line between Uncirculated and About Uncirculated was abused. Therefore, when designing the internal grading system used at the ANA’s authentication service (along with a weight and photograph) to track coins that were certified, it was important to keep very strict standards so that each coin could be identified later if it were lost or its authenticity was questioned.

The goal of technical grading was precision. Due to this approach, our system was immune to the phenomena of “gradeflation” that has occurred with the passage of time. Charles Hoskins, the director, used the term “archival” to describe our system, which became known as “technical grading.”

Back then, the “strike” on a coin was not as important as it is today. Relatively few specialists realized that some coins were truly rare or non-existent fully struck.

My introduction to “strike” came from a few references to weakly struck coins found in Scott’s Comprehensive Catalogue and Encyclopedia published in 1971. For our internal records, the only thing that mattered was to describe a coin fully. We focused on its condition as it left the dies. Thus, two gem coins with full blazing luster and no marks could both grade the same although one coin was weakly struck and lacked major detail! For our purpose, the latter coin would be graded “Uncirculated, weak strike.”

At the time, eye appeal was not important to identify the coin either. Thus, a splotchy brown coin with no wear or marks and a Choice BU coin were both described as Uncirculated. This was a failure of the original technical grading system we developed to identify coins, not to value them. While in Washington, D.C., ANA provided collectors an authentication service not an appraisal.

Years later, at the International Numismatic Society’s Authentication Bureau (INSAB), I learned the importance of strike, prime focal points, and eye appeal to the commercial coin market while reading a galley proof of James Halperin’s NCI Grading Guide that was sent to Hoskins for review. These attributes were incorporated into the technical grading system we were using at the time. INSAB was the first third-party grading service. Upon request and without charge, the technical grade used for “in-house” identification was sent to customers along with the photo certificate of authenticity.

For a few years INSAB, ANACS, and NCI were the major grading services; however, big changes were on the way. Powerful commercial interests founded PCGS and shortly after NGC with large dealer networks. These two services used their own interpretation of the American Numismatic Association’s grading standards to formalize the grading practices based on a coin’s perceived value that were used in the commercial marketplace.

How do these events that occurred over a quarter of a century ago affect us today? Well, it’s something that should have been obvious to us in our “ivory tower” at the beginning: Dealers are not concerned with a small amount of luster impairment (rub) on the high points of a technically About Uncirculated coin while eye appeal and strike are important factors that influence a coin’s grade. Although we may be victim to slightly shifting standards tied to market conditions and gradflation, today there are four established grading services using commercial standards that are reasonably close to each other.

Look at the micrographs in this column. Weakly struck portions on two otherwise gem coins lower their eye appeal and must be considered in the grading equation. While a coin’s eye appeal is more or less subjective, the strength of its strike and the amount of detail missing from its design is not. A collector should be able to determine what a fully struck specimen should look like by viewing an actual Proof coin or even an auction photograph of a Proof.

When buying a coin for your collection, be mindful of its eye appeal and strike as this will pay dividends when it is time to sell. Those collectors who learn which coins of a particular date or mint are rarely seen fully struck will be rewarded with even more satisfaction.