( See also : http://www.australianstamp.com/Coin-web/history/grading.htm . )

Contents

• Standard International Coin Grading Terminology
• Definition of Coin Grading Terms
• In-Between Grades, Split Gradings and Additional Descriptions
• Grading Examples
• Proofs, Patterns and Specimens
• Grading Banknotes
• Grading Services and the 'Slab'

Standard International Coin Grading Terminology

Definition of Coin Grading Terms

Proof

Technically, the term proof refers to a coin's method of manufacture, not its state of preservation. However, in reality, the term is used in grading to describe a pristine example of a proof manufactured coin. Lesser graded or damaged examples are described as impaired proofs.

 

Brilliant Uncirculated (BU) / Fleur de Coin (FDC)

FDC - Fleur de Coin (flower of the die). Although struck with normal dies, a coin described as BU / FDC is as perfect as it gets. A coin in this state of preservation is pristine, almost prooflike in appearance, being perfectly sharp, fully struck up, absolutely flawless with full lustre and showing no signs of wear or bag marks. On the US grading scale, such a coin is described as MS-65.

No coin struck for circulation is ever absolutely perfect. Under strong magnification, even the highest quality coin known will exhibit minute imperfections. The grading of superior, uncirculated coins has been refined in recent years to reflect the degree of these minor imperfections, with distinctions being made between (from highest to lowest state of preservation) - FDC, GEM Uncirculated and Choice Uncirculated.

 

Gem Uncirculated (GEM)

A coin which shows an almost perfect strike but may have one or two minute detracting marks only. Such a coin has exceptional eye appeal and virtually full lustre. Again, there is no sign of being in circulation. Weakly struck coins, or coins which exhibit an unattractive patina (blotchy or aesthetically unappealing toning) are excluded from GEM or FDC grading.

 

Choice Uncirculated (CHU)

A coin which shows a very good strike but may have some slight weaknesses or minor detracting marks. Small details of the design, especially on the high points, may not be fully formed, but must not be confused with wear. Moderate die cracks may be present and should be mentioned separately where significant. Such a coin has better than average lustre and a very pleasing eye appeal.

 

Uncirculated (UNC)

A typical coin which shows no sign of having being in circulation but has its faults. Coins in mint rolls are classed as uncirculated. Due to high-speed production techniques, even uncirculated coins may show slight imperfections such as minor bag marks or tiny rim indentations, especially on larger coins. Significant marks should be mentioned separtately. Lustre is present but may be subdued due to the use of well worn dies or from time in storage. Uncirculated coins may suffer from a weak strike. A slight hint of rubbing or cabinet friction may be seen under magnification. Overall, eye appeal is pleasing.

 

Almost Uncirculated (aUNC)

Similar to UNC but under magnification, these coins show the faintest amount of wear on the highest points. This should not be confused with a flat (soft) strike. The natural mint lustre common to uncirculated coins will be highly evident.

 

Good Extremely Fine or Good Extra Fine (gEF or gXF)

At this point we are starting to split hairs but ... wear is slightly more evident and can just be seen with the naked eye, still confined to, but extending to most high points of the design. Natural mint lustre will be still highly evident.

 

Extremely Fine or Extra Fine (EF or XF)

Light overall wear on the high areas of the design can now be discerned with the naked eye in addition to slight bag marks. Wear is still confined only to the high points and around 90% of the natural mint lustre common to uncirculated coins remains evident. From here on, the importance of the amount of lustre or brilliance exhibited on the coin is superceded by the amount of wear and detracting marks found.

 

Almost Extremely Fine or Almost Extra Fine (aEF or aXF)

In percentage terms, wear is now becoming significant - 11 to 15%. Under magnification, flat areas are starting to develop of the high points of the design. Edge nicks and other detracting marks aat this grade are common and should be described separately.

 

Good Very Fine (gVF)

Wear is now affecting all small details of the design - in percentage terms 16 to 25%. This grade is often used when a coin is found in VF condition for wear but has fewer detracting marks than normal or retains some mint lustre or brilliance.

 

Very Fine (VF)

Slightly more obvious wear will be evident without magnification with small details now rubbed away, but the coin is still in a relatively high state of preservation. A magnifier will show numerous light scratches over the high points and on the fields of the coin. Most of the high points will be affected and only traces of the mint lustre will be present. Detracting marks are now relatively common, but not severe, on a coin which now exhibits wear of around 35%.

Below this grade, definitions for intermediate grades (the one third grades of 'a' - almost and 'g - good) lose their significance, in valuation terms, for all but scarce and rare issues. Klaus Ford discourages their use, instead promoting better use of adjectives to describe the good and/or bad features of the coin.

 

Fine (F)

Considerable signs of wear will be apparent on raised surfaces and the fields of the coin will be quite dull. Almost all sections of the coin will exhibit some forms of wear. Generally there will be no traces of lustre and the rim border will be smooth in parts. Many coins are found at this grade which have been subjected to unprofessional cleaning. In silver coins, this removes their natural patina and leaves a flat, dull, unattractive and unnatural look.

 

Very Good (VG)

A strange and misleading description for a coin which is rather ordinary. If you see a coin for sale described as 'circulated', you should assume that this is the best it will grade. The whole of the coin is showing significant amounts of wear although all of the main detail is still visible and the design outlines are still sharp. Usually only scarce coins and those of historical significance are worth collecting in this condition.

 

Good (G)

Again, the wrong word to describe the state of preservation of the coin. Nearly all the fine detail is lost although most of the main detail and lettering is still visible. The surface of the coin will be showing considerable scratching.

 

Fair (Fr)

This coin is really showing its age or abused life. The design, including most of the main features, have disappeared through many years of handling. At best you can still make out the issuing country.

 

Poor (P)

You can tell what shape the coin is, but that's about all. There is virtually nothing left to see - definitely scrap value only.

In-Between Grades, Split Gradings and Additional Descriptions

A coin described as gVF (Good VF) meets all the requirements of VF condition and then a little more. It could also be described as VF+ or, if it were a little better still, aEF.

One non-standard term used to describe a coin is vUNC - virtually uncirculated. Such a coin shows only the faintest traces of wear on the highest points of the design to indicate that it has been in circulation.

The following table of in-between gradings, with their approximate percentage grading equivalents, may be useful:

When split gradings are used, it is common practice to state the condition of the obverse first and the reverse second. Another common practice is to indicate a range. This is normally used where a number of coins are offered as a lot. For example, EF-UNC indicates the coin(s) grade between both those classifications.

Another good practice in grading coins is to describe abnormal features of a coin as well as the overall grade. Examples include:

• EF+, lightly toned
• aUNC, tiny rim nick on reverse
• VF, washed, retoning
• nEF, 8 pearls (see below for details) ...

Only the last of the seven characteristics, wear, is adequately described by a coin's grading alone. Additional adjectives, regularly added to a coin's description in auction or sale catalogues, can and do have subjective meanings. While such descriptions are necessary to fully present the characteristics of a particular coin, with few standards in place, care should be taken to understand what they mean.

Using the example of a GEM Uncirculated coin, Ford suggests that standard descriptions (incorporating a percentage) after the main grade, should be used to describe the brilliance, or lack thereof, on a copper coin:

Describing lustre on silver coins is not as definitive. Terms such as Full Mint Bloom or Underlying Lustre are often used. Ford settles for just two descriptors - Attractive Toning (AT) and Toned (T) - for example GEM-AT or CHU-T

Grading Examples

Checking the obverse first, look at the horizontal bands at the bottom of the King's Crown. To be UNC they must contain 8 dots (known as pearls), the centre diamond and the horizontal bands of the two rectangular blocks must have rounded surfaces without any signs of wear, as must the King's eybrow, nose tip, beard and moustache. The robes, regalia lettering and rims nust not exhibit any signs of wear.

On the reverse, check the Emu's feathers, the Kangaroo's shoulder and haunch, the ribbon and lettering of Advance Australia. Even under magnification, no wear should be visible. Check also the rim and legends. The star should be sharp but sometimes it is 'Softly Struck' due to filled dies. To be uncirculated, all of these highpoints must be free of wear. They may have knicks, dings, dents and scratches but these must be mentioned and unless they occurred in the minting/shipping process, the coin should be down priced.

Coins of 1910 will probably show toning which is a patina of age above the underlying lustre. An attractive toning will add a premium to coin pricing for experienced collectors, while many novices will shy away, not understanding this natural protection to coins.

'Near', 'About' and 'Virtually' UNC (nUNC, aUNC & vUNC) all mean that the coin shows minute signs of wear only on the high points mentioned above. The wear should be so little that magnification is necessary to detect it. For nUNC and aUNC coins, the percentage scale would be 98% while Virtually UNC coins would grade slightly better at 99% - ie. only the faintest hint of wear shows up under magnification.

For an EF coin, wear is still minute but slightly more apparent. The Crown's 'jewels' remain intact, the portrait high points show slight wear. The Emu's feathers remain clearly defined and the Kangaroo's limbs remain rounded. EF score is 95%, EF+ scores 96% or better while nEF scores 92% to 94%.

Wear becomes easily visible on VF graded coins in the design areas and also, frequently, in the open areas (fields). The pair of pearls to the right of the diamond (known on 1910 coins as the 'Second Set of Pearls') are usually, but not always, smudged flat, leaving the other 'jewels' intact but slightly flattened (the 'Second Set of Pearls on George V coins are immediately to the left of the centre diamond). The obverse highpoints of eyebrow, beard, nose, moustache tip and parts of the regalia are also slightly flattened. On the reverse, the Emu feathers are rounded and individual feather groupings are generally not visible while the Kangaroo's limbs and Advance Australia ribbons show some wear. VF rates a minumum of 70%, VF+ at least 85% and nVF from 65% upwards.

Fine coins show considerable wear with much of the detail obliterated. The centre diamond has usually disappeared and all the high points are worn. The Emu's feathers have moulted and the Kangaroo is nearly flat. Score F as 45% while F+ rates 55% minimum and nF at least 40%.

VG and G coins show continued wear resulting in the Crown's two horizontal bands displaying only at the ends, with the centre diamond long gone. Advance Australia on the reverse is readable on VG coins but mostly obliterated on G coins. VG rates 25% with adjustments for Plus and near. Good rate 10% with plus and minus adjustments not really adding much information to a bleak looking coin.

The condition of the Star on the reverse rates a special mention as this part of the design is often not fully 'Struck-Up' - especially on 3p and 6p pieces due to filled dies. Sometimes the die steel was of inferior quality resulting in poor quality strikings. In other cases, incorrect die pressure settings resulted in a 'Soft Strike'. Where this occurs, split gradings are used. The grade EF/UNC is a common one on 1910 coins because the obverse side is often not struck up.

King George V 1911-1936 Australian coins:

On George V coins, the layout of the bands on the crown is similar to that on Edward VII coins. Again, this is the first point of inspection. Once again there are 8 dots or pearls , a centre diamond and two rectangular blocks inside two horizontal, parallel perimeter lines. The first signs of wear appear on the two pearls to the left of the diamond ( strangely called the 'two front pearls'). With more use, wear continues onto the diamond and parallel lines, then onto the pearls to the right of the diamond and onto the two rectangular blocks until eventually all design is worn away. Attention must also be paid to the eyebrow, nose, moustache, beard, ear and robes.

On the reverse, one of the first tests in identifying an uncirculated coin is to check to see if the eye details are visible on the heads of both the Emu and Kangaroo.

Take notice also of wear on the rim and in the lettering (legend) on both sides of the coin. The gradings and percentages used remain constant with those described earlier for Edward VII's coins.

1937-1938 Australian Crowns:

On the reverse of these coins at the very top of the crown is a cross with a circle (or 'Orb') below it. On this circle is one vertical and one horizontal band which form another, very light, cross. This light cross should be checked for wear.

The next point to check are the nine pearls lined up vertically below the Orb. Are they rounded or do they show any sign of flattening ? On each side of the pearls is a vertical line known unofficially as a 'Spire'. Each has a raised line running down the centre referred to as a 'Flute'. Check the Flutes for wear. Look also at the rims and denticles for any wear, rim ricks, chips, bumps or bruises.

If there is absolutely no wear on any of these high points - a magnifying glass should be used to check - then the obverse side may be graded UNC. Before assigning that grade, check the fields and designs for scratches, wear, abrasions and porosity of the surface. Circulation coins drop from the minting presses into containers which may cause indentations to occur. 1937 and 1938 Crowns were distributed throughout Australia to banks by ship and rail. During transportation, particularly because of the large size of the crowns, it was common for 'Bag Marks' to occur . The grading is still UNC if only bag marks and no other wear is found - the coins description would be something like - UNC with bag marks or UNC with rim nicks. However, unless the coin still has full lustre (even under surface patina or toning), it should be graded downwards.

On the obverse, the highpoints to check include the King's hair, top of ear, eyebrow, nose, jaw line and neck, plus the rims and legends. Do the combing lines in the hair stand out clearly ? Has the eyebrow been flattened ? Is the lobe of the ear worn or damaged ? Are their marks in the field ?

Once you have mastered the art of these examinations, grading the coin should become less of a black art and more of a science. You will be in a much better position to negotiate a reasonable price based on the evidence of wear displayed by the coin, not on the seller's powers of persuasion with an eye towards a fast buck.

Proofs, Patterns and Specimens.

Originally they were trial coins, hand struck at the start of a mintage, in order that any flaws could be detected and rectified. Then they became a special sample, kept as an example of each mintage. Today, they are considered numismatic coins - of interest to coin collectors - and are sold at fixed prices consistent with their quality and rarity.

For most Australian pre-decimal proof and pattern issues (particularly gold sovereigns and half sovereigns), mint records were poorly kept. Confusion has resulted from references to Proof, Pattern and sometimes Specimen coin strikes, all of which seem to have similar qualities. To overcome these description difficulties, a proof or specimen coin is now defined as a specially prepared coin which also has normal circulating coins issued with the same date and die types. On the other hand, a Pattern is an issue of a particular date and die types for which no circulating coins were issued. Patterns may, and often do, show slight differences from circulation issues as they were usually intended as examples of a change in proposed design, manufacturing process or composition.

Modern proof coins are minted from highly polished dies using specially prepared blanks with a bright surface. Extra pressure is used to strike the coin and often the blank is struck more than once. They are the result of a number of laborious processes. Firstly, the die surface is sand blasted and hand polished using diamond lapping paste applied with soft wooden sticks. A final polish to produce a brilliant mirror finish is achieved with a dental drill covered with a soft pad. Next, the surface of the die is covered with clear tape and a scalpel is used to expose the design areas. Again the die is sand blasted resulting in a frosted finish on exposed design areas. The final process is for the die to be crome plated before being used to strike coins.

The blanks intended to become proof coins are also given special treatment. Prior to striking, they are immersed in a weak acid bath to remove any surface impurities. From that point on, they are only ever handled with gloved hands or special tongs to ensure that the surfaces remain pristine.

Grading Banknotes.

A points system is used where each characteristic is scored out of 20 - the maximum score for an absolutely pristine note being 100. Grading points are as follows:

Grading Services and the 'Slab'

Officially known as 'Encapsulated Numismatic Products', slabs were intended to promote investor confidence and enable the purchase and sale of numismatic items, sight unseen. In the U.S.A., the practice has enabled Wall Street companies to confidently trade in numismatic items through the investment market, with the actual item being traded remaining locked away in a bank vault.

The practice has its critics. Many believe that the entry of large scale investors into the numismatic market has pushed up prices to the point where genuine collectors are being pushed out.

Further, controversy of grading continues. Dealers and investors have been known to send a piece to several different grading services, seeking that slightly higher grading which will add hundreds or even thousands of dollars to the value of the piece.

One advantage of the slab is that market forces have helped to reduce the gap between the buying and selling price of items - the dealer's margin. This, however, is more than offset by the increased volatility of investment market driven valuations. Alongside the more established benchmarks of valuation - rarity and condition - the criteria of market forces has made numismatics a much more complex hobby.

Sources:

Wynyard  Coins , Coin Web , 2003
NUMI$NEWS Magazines - Sept, Oct, Nov, 1996 - M. R. Roberts, Wynyard Coin Centre,
'Rigby's Coin and Banknote Guide' by Greg McDonald - 1983,
Renniks Australian Coin and Banknote Guide by Dion H. Skinner - 1980.
Grading Standard for Australian Pre-Decimal Commonwealth Coins - Circulation Type by Klaus Ford - 1995.

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