Hern's Handbook and NGC Grading Scales explained!

[4kids 10]

Good day fellow collectors.

 

I have seen many questions relating to grading, comments about incorrect Grading and issues relating to prices of SA coins by NGC and PCGS. An issue which is never mentioned is that historically our handbooks relates to a British Standard of grading on what was adopted by the British a long time ago of a 100 point scale whereas the Third Party Grading companies we all use in the USA adopted a 70 point scale of grading called The Sheldon Scale. More information about this grading scale can be found at the following link:

 

The History and Explanation of the 70 Point Sheldon Scale

 

 

Some time ago NGC issued what is called a International Table of Coin Grading Scale is which the attempt to draw lines between the various grades throughout the world and how it compares to their own way of adopted grading using the Sheldon Scale. When one studies this table is becomes clear that what Herns attempts to describe in grades and prices is obviously based on the 100 Point British Scale and not the Sheldon Scale and for South African Coin Collectors it has long been a issue of not understanding the difference between what they see in the Hern Handbook and some prices realised when coins go on auction whereas these coins often fetches much lower prices that what they expect, especially when they consider the price against the grade of the Hern's Handbook.

 

Table Explaining the difference in the way different countries around the world grade coins

 

Hern himself makes reference of this difference which is mostly overlooked and I myself had drawn many collectors attention to page 5 of said handbook. Seems as if most people are only interested in the tabled prices than the written content scattered around in the handbook. Herns describes NGC graded coins AU58 pieces he had seen as EF to EF+ coins.

 

I leave it up to each collector to study the NGC Table, Hern's Handbook and familiarise yourself with these two elements and you would gain greater insight in your coin prices. So next time you want to sell that 1892 MS 62, know that the coin falls in the Hern Category of high end EF or just below UNC and that strictly speaking only coins graded MS63 or higher will and should qualify under the UNC price column. Obviously not considering some coin prices and controversies that from time to time blows Hern's hard and appreciated work out the water.

 

See also the large difference in NGC graded EF/XF coins which is no more than a VF in the Hern Handbook.

 

With that I wish you all a most prosperous and blessed 2011.

Happy Collecting

 

Jan

[eZethu Coins 10]

Not just food for thought - a whole Sunday roast with all the veggies and pudding :-)

[jwither 10]

I am familiar with the difference in US and British grading standards, but outside of the UK CGS grading service, have never seen the 100 point grading scale anywhere. None of the leading UK auction firms such as Spinks, Baldwins or DNW refer to it at all in any of the auction listings I have seen.

 

The second point I would make is that while many correctly point out the inconsistent application of the Sheldon scale, I cannot say that the UK system is applied any better with the RAW coins I have bought. I agree with you that I consider a GEF up to a MS-62 but I have bought these coins in EF or GEF that grade anywhere from AU-55 to MS-62. An example is an 1897 ZAR Florin which was sold as an EF but graded NGC MS-61.

 

As for the prices, my experience does not indicate that the variance between actual prices and those in Hern are due to this difference in interpretation. Possibly, its because collectors interpret them differently as you state but I do not believe so. In the one dealing I had with a prominent SA dealer, I specifically asked them this question and they said they graded their coins by US standards, yet their list prices were still those in Hern. And for those that I bought, definitely were not graded using the UK system.

 

Its still my opinion that the reason the Hern prices are not accurate is because in most instances, they are not based upon actual sales at all. Taking the grade of EF as an example which I consider vastly overstated in most instances with the more expensive coins, even graded coins in AU have not sold for the catalogue price in the sales I have seen. In many instances, nowhere near it.

 

Using a specific coin, I do not know what the 1931 2/ and 2/6 circulation strikes are listed in Hern now, but in my earlier editions, these had lower list prices than some of the other dates (such as I believe, the 1925 2/ and 1933 2/6 since I do not have my catalog with me now as I write this) when in actuality, these coins are VASTLY scarcer than all others. Moreover, I doubt that in most or possibly ANY grades, that these coins sold at all in a given year. Just as with some of the actually rare US coins for which prices are also listed, these prices can be nothing more than a guess.

 

In actuality, I believe the pricing works in reverse from what most people think. Not only are the catalog prices NOT based upon any real prices, the real prices sell for those listed in the catalog (when this happens) primarily because collectors gravitate toward them as a reference point because they may have none other available, especially if they are not knowledgeable on what different coins in different grades are "really" worth. Given that the market for Union coins is so thin, this especially applies to these coins as the not infrequent wide price variances from one sale to the next occasionally demonstrate.

Edited January 4, 2011 by jwither

[ALJADA 10]

Hi Jan,

 

I totally disagree with your comment that we use a British 100 point scale. We have never nor do I believe we will ever use the 100 point scale you speak of. The fact is the 100 point scale you speak of was created by LONDON COINS when they set up their third party grading service CGS UK. It is only a few years old and we have never incorporated any such numerical grading system here in South Africa until NGC became so popular. One can view the history behind CGS UK grading system by clicking on this link The Coin Grading Service : About the CGS Grading System

 

South Africa loosely used the traditional grading terminology used in Great Britain: Uncirculated, Extremely Fine etc but we have never actually devised our own grading system. To assume that a MS62 NGC graded coin, according to Hern or the British as you state, is a high end EF or just below unc is ludicrous.

 

MINT STATE, which begins at MS60, not MS62, means a coin that exhibits no trace of wear anywhere on the surfaces of the coin. The definition of UNCIRCULATED is exactly the same: no trace of wear anywhere on the surfaces of the coin. You are saying that a MS60 coin i.e. one which has no trace of wear is actually not an Uncirculated coin i.e.one which has no trace of wear??!! Wonderful. This certainly shows how to confuse the most basic and simple concept of grading! NO TRACE OF WEAR IS UNC AND UNC STARTS AT MS60. I agree that the differing levels of mint state can be debated but the base line of no trace of wear can not be debated because a coin either shows wear or it does not. There is no grey area here.

I have been using my own table in order to draw a relationship between the 70 point system and our British adopted system. It is based on my experience with dealers here and my extensive grading experience under the 70 point system. It has prved to be spot on in at least 95% of my comparisons. Here it is:

Cheers

Alex