Can A Collector Learn How to Grade?

Many articles about coin collecting (including more than a few written by yours truly) have suggested that it is extremely important for collectors to learn how to grade. In theory, this makes sense. But is this realistic? Can a person with a family, a job and interests besides coins realistically learn how to grade coins? I think that the “learn how to grade” advice that I mentioned above is fine, at least in theory. However, is this really any different than a doctor suggesting that in order to better care for myself that I learn brain surgery, anatomy and how to read X-rays in my spare time? I’m obviously not about to become an expert in any of these fields and I wonder if it is unrealistic for me—a professional coin dealer—to suggest that a collector become an expert grader.

I think there is really only one way to become good at grading coins. You have to look at thousands and thousands of coins in person. And then you have to buy and sell coins so that you have the confidence to determine that your skill level is there.

But even if you look at thousands of coins in person, if you do not have innate grading abilities, it probably does not matter. I know a number of dealers who have been viewing coins for years and years and I still don’t think they have a clue how to grade because they just don’t have a good eye. As I’ve written before, I think the ability to grade a coin is genetic. Either you have the ability to do it written into your genetic code or you don’t.

That said, is there a way that the collector can acquire grading skills that make buying coins a safer and more pleasurable experience? I think the answer is a resounding “yes” and I have some suggestions:

1. As I said above, there is no substitute for viewing coins in person. I think the best way to do this is to attend a major auction (especially the FUN or ANA sales) and spend a full day viewing as many coins as you can. It’s important to remember that as you are learning how to grade that you need a base line to compare coins. And it is also important to remember that you need to grade according to PCGS and NGC standards. Looking at coins that are already in slabs and which run the gamut from very low end to very high end is a great way to hone your skills.

2. For the basics in grading, taking the ANA grading class is a pretty unbeatable experience. The instructors at these classes are highly skilled professionals and the chance to work with experienced dealers or professional graders is pretty unique in this hobby. If you have a week to spare, I highly recommend this class. And if you have already taken the beginning class, the advanced class is even better. (For more information on the ANA grading classes, visit their website at www.money.org)

3. Any collector who decides that he is going to learn to grade a wide range of coin types or series in a short period of time is probably being unrealistic. I have always suggested becoming a specialist and one of the main reasons why is that a specialist has fewer things to learn about grading than a generalist. As an example, if you make the decision to collect New Orleans gold, it is not unrealistic to think that you can become a reasonably competent grader in a few years time. But if you decide to collect, say, all early gold coins produced from 1795 through 1834, there is an awful lot to learn and you are likely to have a number of gaps in your ability.

4. As you learn to grade, be less focused on numbers (i.e. MS63 versus MS64) and more focused on learning what constitutes eye appeal and quality in a specific series. I believe that most collectors are too focused on micro-grading and are not focused enough on the big picture.

5. In many cases, the most important thing a collector can do is to establish a good relationship with one or two dealers to help them buy nice coins, establish grading and eye appeal standards for a set (or sets) and to help make them better and less impulsive coin buyers. I will be the first to admit that not every collector needs a dealer’s guidance. If you collect ultra modern issues, you can most certainly go it alone and I know some other collectors who have built lovely collections pretty much on a solo basis.

Let me give you an example of a collector/dealer partnership that over the course of many years has been highly successful. Dr. Steve Duckor (who is probably just about the most competent collector of American coins that I have ever met) was very fortunate early in his collecting career to meet and become a customer of David Akers; a dealer who I think has a rare and exceptional combination of ability and integrity. Together, these two individuals worked on a number of collections that have proven to be marvelous in terms of quality and scope. It’s truly been a win-win relationship for both individuals. And it’s exactly the sort of business relationship that I’d encourage you, as a collector (although with me, not David!), to aspire towards.

If you aspire to become a competent grader I commend you and hope this article will spur your interest and enthusiasm. Just remember that grading skills take a lifetime to develop and refine (I’ve been doing this professionally for over a quarter of a century and am still humbled at what I, from time to time, need to learn...)

Traits of Successful Coin Dealers

Coin dealers are an “interesting” (yes, this is an ironic use of quotes) group. If you were to take the top fifty professionals in this field and examine their personalities, I believe that a number of the same traits would be seen in a majority of these individuals. What are some of these traits? And do you have what it takes to be a successful coin dealer? With very few exceptions, most of the top coin dealers have been involved in coins since they were very young. I can’t think of more than one or two coin dealers who I regard as being at the top level of the industry who were not buying and selling coins by the time they were in their early teens (or in some case, before this). Many people have asked me why this is the case. I think that being a good coin dealer is something that is almost genetic in its origin. You can’t really teach an adult the skills to be a truly good dealer. It’s almost as if the top dealers were born with a “coin dealing gene.” If you are a 42 year old insurance salesman with a passing interest in coins, it’s pretty unlikely that, within a few years, you are going to be a force on the bourse floor.

And speaking of genes, I think that every good coin dealer has what I call the “collecting gene.” Even though I don’t really collect coins anymore, there are a number of other areas that I avidly collect. Virtually every great dealer I know is also a serious collector of something; and many have multiple non-numismatic collections. These range from paper money to vintage photographs to globes to muscle cars. If you do not have a passion for collecting, you probably aren’t going to amount to much when it comes to dealing.

Coin dealers have exceptional memories when it comes to coins. I think I qualify pretty highly in this regard but my memory is very selective. As an example, it usually takes me a number of times meeting a collector until I remember his name. But I can generally remember this collector’s coins that he showed me in 1984 and, more distressingly, in great detail. I find the same to be true with many other of the dealers who I respect. They have an absolutely uncanny ability to remember coins they have handled, deals they have done, auctions they have attended, etc. If you have a poor memory when it comes to details, you are not likely to become a good dealer, let alone a great one.

You may not agree with me on this point, but I contend that most very successful coin dealers are extremely intelligent. Note that I did not say that they are “highly intellectual.” As you can probably imagine, post-show coin dealer conversations do not tend to involve favorite philosophers, the merits of particle physics or favorite 17th century English poets. But I think f if you measured the IQ level of most dealers, you would find it to be well above average. In a nutshell, if you are not extremely bright, you are not likely to be a good coin dealer.

Really good coin dealers are also really good entrepreneurs. Very few of them work well in a corporate setting and this is why it never seems to work when a “real” company tries to buy a coin company or when a coin company brings in a “real” businessman to manage it. If you’ve spent years working at XYZ Corporation in a management capacity, you are going to be freaked out by the coin business. But if you are 22 and a recent college graduate who paid for your education by selling vintage rock T-shirts on Ebay, you might find the coin business to be right up your alley.

The best coin dealers are also excellent at risk management. As an example, they can look at coin or a collection and quickly figure out what their upside and downside risk is. I find that most of the coin dealers who I regard as exceptionally talented are risk takers but they understand how to control their risk. The coin dealers who scare me are the loose cannons who take crazy “shots” at coins in auctions (i.e., buying a coin in an MS63 holder and paying an MS65 price in the hope that it will upgrade two points) or who are overly-leveraged. The insane risk-takers are the guys who get much of the publicity at shows or auctions but the smart guys are the ones who, at the end of the day, walk away from their bourse tables (or their office desks) with a smile on their face.

Good coin dealers have to work very hard and slackers do not do well in what has become an extremely competitive industry. There are a number of underachievers in the coin market but they tend to be guys who bounce from company to company as employees or low-level wheeler-dealers whose inventory rarely changes. In the current market, you need to be willing to travel extensively and work long hours to stay ahead of the competition.

Some of the coin dealer traits that I’ve mentioned above have been augmented by changes in the coin market. There are new dealers specializing in areas like moderns who clearly have not been involved with coins since they were nine and who do not have a “collector gene.” These are people with non-numismatic backgrounds who look at coins like widgets and whose computer savvy or marketing expertise allows them to be active market participants. They may not be “coin dealers” in the classic sense of the word but they certainly have an important role in the future of the coin market.

Grading Advice for Coin Collectors

More than ever, it is extremely important for coin collectors to learn how to grade AND to become knowledgeable in the field(s) in which they collect. Now this is easy for me to say. I’m a full-time coin dealer and have been since 1982. 25+ years of daily dealing has helped me learn how to grade pretty well and has made me very knowledgeable in a number of areas. But how does a collector with a full-time job, a family and real world responsibilities become a capable numismatist?

Learning how to grade and how to tell the difference between nice coins and not-so-nice coins is an important facet of enjoying the hobby. Because of the existence of PCGS and NGC, the newer generations of collectors have had a “crutch” to use when it comes to grading and, I believe, some collectors have taken shortcuts when it comes to proficiency this area. PCGS and NGC provide a great safety net as far as grading goes but there is clearly no substitute for personal expertise.

So how does a new collector learn how to grade? I think the first thing that is important to realize is that grading is a step-by-step process and that the first forays a collector takes need to be baby steps. In other words, a new collector is not going to be able to tell the difference between a PR67 and PR68 Barber quarter right away. It is far more likely that he will understand the difference between a PR64 and a PR65 than a PR67 and a PR68 as the differences on lower grade coins are more quantifiable (a PR64 coin has hairlines or marks that are easy to see while a PR67 might only have a single hairline that is very well-hidden).

I have a few suggestions for beginning collectors in regards to learning how to grade. The first is to immediately choose an area to specialize in. It is far easier to learn how to grade a single series (such as Barber quarters or New Orleans double eagles) than it is to try and learn all U.S. coins at once. The second suggestion I have is to try and find a mentor. When I was a young collector, I was fortunate to find two older, more experienced dealers who were incredibly helpful in teaching me how to grade the series I was collecting. Another suggestion is to look at as many coins as you possibly can—in person. You WILL NOT be able to learn how to grade from viewing images. I’ve got a few suggestions that relate to this which I will discuss below. A final suggestion is to begin collecting an area in which grade does not matter all that much. In other words, I don’t think a complete neophyte has any business trying to buy PR65 and finer Proof gold as he is beginning to learn how to grade. He would do much better choosing an area where the learning curve is easier—and far less costly - and then graduating to more difficult areas as he becomes more confident in his ability.

As I mentioned above, I have a few specific suggestions to make as far as improving your grading skills. The first, as I said before, is to look at as many coins as possible. I can’t think of a better place to do this than a major coin show and the two shows that come to mind are FUN and Summer ANA. If I were a collector I would make it a point of attending both shows and spending at least one full day at each looking at the coins in the auctions. Let’s say you collect Liberty Head double eagles. In the FUN or ANA sales you are likely to have the chance to view hundreds and hundreds of coins in a huge variety of grades. You can make the viewing process more of a challenge by covering the grades on each slab and testing yourself as if the coins were ungraded.

If a specialized collection in your area comes up for sale, try extra hard to view the lots. If I were a collector of, say, Dahlonega gold coinage, I would want to look at the coins being sold in an important specialized collection.

I mentioned trying to find a mentor. Let me add that in the context we are discussing, I would amend this to finding a mentor who can grade (!) If you could look at a specialized collection of Dahlonega gold coins with a very knowledgeable mentor, imagine what an incredible learning experience this would be.

In my opinion, the concept of grading and connoisseurship are more related than most people realize. To better understand grading and the level of preservation of a coin, it is very important to understand what makes an object beautiful and what makes it aesthetically desirable. A good connoisseurship class, offered by a museum or an art school, could impart some real insights.

Every year, the ANA offers a beginning and an advanced grading class at their Summer Seminar. I think these are very helpful for the beginning collector, especially as they offer hands-on experience and a chance to work with some top professional graders. The only problem with these classes is that they tend to focus on more basic coins like Morgan dollars and Walking Liberty half dollars. If you collect Charlotte or Dahlonega gold these classes are not going to address these specific coins.

Getting involved with an online group such as the PCGS or NGC message boards has some benefit to the new collector but I really like the idea of a specialized group. I am aware of specialized groups that post images and threads about Seated coinage, Bust coinage and Colonials and this seems to me to be a great place to learn about grading.

Two final thoughts. As a collector learns how to grade, I think it is more important to learn how to tell the difference between something that is choice and original (versus cleaned and/or processed) versus whether a coin is a 64 or a 65. The best way to learn about originality is to, obviously, look at fresh, original coins. These aren’t easy to find any more but truly fresh deals do pop-up at auction from time to time and they are invaluable “time capsules” for the specialist. Or, look at coins in museum collections. As an example, the gold coins in the ANA’s Harry Bass Museum collection are wonderfully fresh and time spent carefully looking at the surfaces and coloration of the pieces on display is invaluable.

I recently had a discussion with a good client who told me that the whole grading process was disheartening to him and that he had decided to sell his high-priced coins which had a good percentage of their value determined by their grade. He had decided to focus on less expensive coins in which one point on the grading scale wasn’t worth thousands (or tens of thousands) of dollars. I can see his point. If you find the whole grading process to be silly or too difficult to fathom, try and collect something like Tokens or Medals where the beauty and rarity of an object determines its rarity; not just its degree of preservation.

The Condition Census Defined

I make frequent reference to the term “Condition Census” in many of my articles, blogs and individual coin descriptions but it has been brought to my attention that some beginning collectors do not know what this term means. The concept of the Condition Census is credited to Dr. William Sheldon who employed it in the late 1940’s with the publication of his seminal work “Early American Cents.” The census was a “scientific” way of arriving at a coin’s value by listing, in serial order, the finest known example of a specific die variety and then a list of the next five finest. For each specific variety of early cent, a “basal value” was listed and a coin’s worth on the open market would be that value times the grade. As an example, if a specific variety had a basal value of $5 and it was graded EF40 by Sheldon’s standards, the value of the coin would be approximately $200.

This system seems somewhat quaint in the coin market of the 21st century, but the concept of the Condition Census has been co-opted to apply to a host of other series besides Large Cents. In some cases, the system is practical; in others it clearly is not.

When specifically applied to United States gold coins, the concept of a Condition Census sometimes makes sense. As an example, it is possible for an expert to create a list of the five or six finest examples of a rare issue such as an 1841-D quarter eagle. It is not practical to create a list of the five or six finest 1924 double eagles as there are numerous examples that could qualify in the Condition Census and it is virtually impossible to substantiate a claim that one is better than the other.

Sheldon’s concept of basal value certainly no longer applies to coins (when they became $10,000+ items, how could you establish an accurate basal value?) but the validity of listing the finest known examples of a specific date or major variety remains interesting to collectors. And the value of such a listing has become more and more important as collectors enter their sets into the PCGS and NGC Registries.

Most of my books have included listings of finest known and Condition Census branch mint gold coins. But beginning with my new book on New Orleans gold, I have stopped listing a Condition Census. I did this for a number of reasons. The first is that grading standards for most gold coins have clearly changed. So it made little sense to list a coin that last appeared at auction in 1997 versus another similarly graded coin that appeared for sale in 2005; in nearly all cases the 1997 coin was clearly better. The second factor was that owners of these coins (mainly dealers) were continually breaking them out of one holder and putting them into another in attempt to increase the value of the coin. It looked ridiculous, in my opinion, to have the same Condition Census coin appear in my listings as a PCGS MS61, then as an NGC MS62 and still later as a PCGS MS62.

What I have tried to do to replace this system is to list “significant examples” of a certain date. As an example, if there are five Uncirculated examples of a specific New Orleans half eagle known to exist, I’ve tried to list them all. They may not necessarily be listed in order from “best” to “worst” but I have included their prices realized when they appeared at auction and let the numbers speak for themselves.

One problem with a Condition Census listing is that there is a somewhat arbitrary nature in creating any such list. Grading will always have a degree of subjectivity attached to it and a coin that is graded MS61 may, in my opinion, not be as nice as one graded MS62 or even MS63. Let me give you a great example. A few years ago I was asked to look through what was probably the single greatest collection of Dahlonega gold ever assembled. For nearly every date, the collector had multiple coins and, in some cases, he had what were probably the first, second and even third finest known. He made the decision to reduce his holdings and wanted me to select the single coin for each date that I thought was the finest. I remember choosing an 1855-D half eagle in AU58 as a nicer coin than one in MS63 and eventually listed the AU58 coin ahead of the MS63 (both coins were graded by PCGS, in case you were wondering...) in my Dahlonega Condition Census listings.

A Condition Census listing is only valid if the person making the list is very knowledgeable and has no ulterior motive for making one coin “better” than another. I’ve always been impressed by the Large Cent collectors who, for the love of the game, keep meticulous Census listings not only for each variety but, in some instances, for die states. Now that’s what Numismatics is all about!

Coin Cleaning

The market’s definition of what is acceptable regarding cleaned coins has evolved considerably over the course of time. When PCGS and NGC were established, the coin market was overrun with problem coins. Whizzing, which involves using a wire brush on the surfaces of a coin to simulate mint luster, had been prevalent in the 1970’s but more sophisticated methods were beginning to emerge. Third-party grading established some basic guidelines regarding cleaning.

In the early days of the two major services, standards regarding cleaning were overly rigorous. Circulated rare date coins with light, unobtrusive hairlines were “body bagged” or were brutally net graded. What the services failed to realize was that a large percentage of circulated rare date gold coins had been lightly cleaned in the past and coins without hairlines were exceptionally hard to find. Standards were changed over the years and today, it is common to see lightly hairlined coins in holders. This does not bother me.

PCGS and NGC’s early decision to be hard on hairlines had an interesting effect on many coins. Certain dealers began using putty or other substances to cover these hairlines so that “no grade” coins could get into holders. As a result, many coins which would be considered gradable by today’s standards were covered with foreign substances. I see coins like this in most every auction and on the bourse floor. In fact, I even buy them on occasion and it is interesting how nice many of them are once the goop on the surfaces has been removed.

I don’t know if there is any scientific formula at PCGS or NGC regarding what is or what is not acceptable regarding hairlines. In my experience, I find that both services tend to be more tolerant of a coin that has light or no hairlines on the obverse coupled with more dense hairlines on the reverse. A coin with noticeable hairlines on both sides is almost certainly not going to be encapsulated unless it is a major rarity (more on this in a second). Deeply toned coins that hide hairlines are far more likely to be encapsulated than light coins on which the hairlines are clearly noted.

There are varying degrees of cleaning and generally speaking, the more harsh the cleaning, the more likely a coin is to be a no-grade. If a coin has been wire brushed or cleaned with a harsh abrasive, this is not considered to be market acceptable. If a coin has been dipped or lightly washed in soap and water, it is considered to be market acceptable and will almost always be encapsulated. (Dipping is a whole story in itself. Is it harmful to a coin’s surfaces? Probably, even if done properly. Do most dealers and collectors do it on occasion? Absolutely.)

There are coins which walk the fine line between being market acceptable and non-acceptable. As an example, many coins have been wiped with jeweler’s cloths over the years. A wiped coin is generally somewhat dull and lifeless but it may not have any actual hairlines—just a “look” that clearly indicates it was wiped. On a common, generic issue, wiping is almost guaranteed to get a coin no-graded. But on a rarer issue or on a piece of early gold, where grading standards may be more relaxed, light wiping may be considered market acceptable.

Cleaning methods have become far more sophisticated in recent years. The gold coins that were in the S.S. Central America and S.S. Republic shipwrecks underwent very sophisticated cleanings in order to make them market acceptable and to remove encrustation caused by a century of exposure to seawater. Many collectors cried foul and complained that these coins should not have been slabbed. I disagree with this. The majority of the coins that I have seen from these shipwrecks have an appearance that is totally market acceptable. And, they are clearly noted on the holder by both PCGS and NGC as coming from a shipwreck.

What I have more trouble with, from an ethical point of view, is when a grading service conserves a coin and does not indicate on the slab that this process has been undertaken. Not everyone is like me who likes dirty, original coins and there is certainly a place in the market for bright, highly reflective pieces. I would just like coins like to be noted as being “restored” so that less sophisticated buyers are made aware of what they are purchasing.

I mentioned earlier that rare dates and types are graded on a different standard than common issues. This has always been the case in the coin market and it will continue to be this way. A 1796 No Stars quarter eagle that has been lightly cleaned at one time but which still has a decent overall appearance is a very desirable coin that will invariably be encapsulated. A 1926 quarter eagle with the same degree of cleaning will most likely not be encapsulated. The former is a $100,000 coin while the latter is worth $200. It makes sense (at least to me…) that the very expensive coin is going to be treated differently than the cheaper coin.

Cleaning and its impact on grading remains one of the most controversial topics in all of numismatics. Clearly, what was acceptable to collectors and the grading services in 1986 changed greatly in 2006 and will, no doubt, be substantially different in 2026.

How Rare Are Rare Date Coins?

In the past few years, there seems to have been an explosion in the availability of rare date United States gold coins. Many issues that were considered very rare a few years ago now seem almost commonplace. Is this actually the case--or is this perception totally incorrect? The correct answer lies somewhere in the middle. A number of interrelated events have occurred during the past few years which have significantly altered the traditional relationship between supply and demand that has dictated the rare date gold market for the better part of three decades. All of these events are important and each needs to be analyzed individually to make any "big picture" conclusions in regards to this market.

I. Rising Prices Have Brought Many Coins Onto The Market

Ten to fifteen years ago, the prices for many better date United States gold coins were extremely low. It was possible to purchase outstanding pieces in the $500-$2000 range. Today, many of these same coins are worth five to ten times (or even more) their original purchase price. Many collectors have decided to take their profits. After all, it's hard to pay $7,000 for another AU-50 1840-C half eagle when the AU-50 you bought fifteen years ago was priced at $750.

II. Grading Standards Have Changed Considerably In The Past Few Years

Population explosions seem to be greater for high grade gold coins than for low and middle grade pieces. There is a good reason for this. The grading standards of the late 1980's and the early 1990's have loosened considerably. The very same coin that PCGS or NGC graded Extremely Fine-45 in 1989 is almost certainly an About Uncirculated-53 to About Uncirculated-55 today. And many of 1989's AU-55 and AU-58 coins are today's Mint State-60, Mint State-61, Mint State-62 or even Mint State-63 pieces. The result of this "gradeflation" is that many dates that once appeared to be very rare in high grade now seem much more readily available. The truth of the matter, however, is that many of these Uncirculated coins are the exact same pieces that were considered About Uncirculated a decade ago.

III. A Number Of Exceptional Hoards Have Come Onto The Market

The last ten years have seen some amazing groups of gold coins enter the market. Some, like the Brother Jonathan hoard of 1861-1865 San Francisco double eagles and the S.S. Central America hoard of 1857-S double eagles and territorial issues, are well known. Others, like the group of Uncirculated 1856-D half eagles discovered in South Carolina a few years back or numerous groups of key date eagles and double eagles found in Europe or other overseas locations, are not as well known. All of these have made certain formerly rare issues much more available in high grades than in the past.

IV. The Market Is Now Dominated By Investors

Until recently, issues such as Charlotte and Dahlonega gold were strictly collector-oriented. Investors were led to believe that these coins were "bad investments" because they were not available in Mint State-65 or because they were "too esoteric." After years of bad performance by investor series such as silver commemoratives or modern type, the same investment gurus who had badmouthed Charlotte and Dahlonega gold coins were now jumping on the bandwagon. The result was a major disturbance in the supply/demand ratio for such coins.

The most immediate result was a quick run-up of prices. Suddenly, a lot more people wanted high quality Charlotte and Dahlonega coins. Many of the Condition Census quality pieces that had previously been owned by serious collectors were now in the hands of investors. This became a negative factor for the short and medium range health of the Charlotte and Dahlonega market.

Collectors are great for markets because they tend to hold their coins for a long period of time. In order for Charlotte and Dahlonega prices to have risen in an orderly fashion, as they did through the 1970's and the 1980's, the coins had to appear to be rare (i.e., the demand had to outstrip the supply). One of the reasons why it has become so hard to find nice medium grade (i.e., Very Fine-35 to Extremely Fine-45) Charlotte and Dahlonega coins is that these are "collector grades" and the people who own these coins hold them for ten to fifteen years.

Investors are bad coin owners because they tend to sell very quickly. They will buy a high grade piece and sell it six months to a year later. This creates a situation where supply suddenly outstrips demand. Even more hazardous is the fact that the perception of rarity for these coins becomes altered. Coins that were once believed to be rare were now trading on a regular basis. While it might have been the same two examples of a specific date that traded over and over, the casual observer was now led to believe that a supposedly rare issue was more available than he had been led to believe.

The fallout from this has been very interesting. As this article is being written, I find that the demand for affordable, lower grade (i.e., Very Fine and Extremely Fine) Charlotte and Dahlonega gold coins, as well as most other branch mint issues, is extremely high. But coins like this are very hard to find as they tend to be in the hands of serious, long-term collectors who do not wish to sell them. I now find myself in the curious position that when someone calls me looking for a $1,500 version of a certain Charlotte or Dahlonega issue, I have to tell him that I do not have this coin but I do have a $10,000 version. The market now seems to be saturated with hard-to-sell expensive coins while the demand is for inexpensive coins.

V. Too Much Information Leads To Disinformation

In the 1970's and 1980's there was very little easily accessible information about United States gold coins. Today, there is an incredible amount of information. For the sophisticated collector or dealer, this data is a godsend. For the neophyte, this information can be confusing or even misleading.

As an example, let's look at the PCGS and NGC population reports. These monthly publications, which list the number of coins graded by each service, have become widely-recognized sources of information. According to the most recent reports (May 2000 for PCGS and April 2000 for NGC), there have been 21 1859-D gold dollars graded in Mint State by PCGS and another 16 have been graded by NGC for a total of 37 coins.

In my 1997 book "Gold Coins of the Dahlonega Mint, 1838-1861" I estimated that 10-12 Uncirculated examples of this date were known. Was my estimate that wrong or is there something misleading about the PCGS and NGC data?

What many people don't realize about the population reports is that the numbers are often greatly swollen by resubmissions. The "21" Mint State 1859-D gold dollars recorded by PCGS might actually be no more than ten or so separate coins. When you also realize the fact that many of the coins graded Mint State-60 or Mint State-61 by this service could just have easily been called About Uncirculated-58, then my original estimate of 10-12 truly Mint State 1859-D gold dollars seems a lot more accurate.

Another type of information that can easily be misinterpreted by neophytes is auction records. Many collectors make purchases based on the fact the a certain coin has or hasn't appeared a certain numbers of times at auction over the course of a few years.

I keep a meticulous database of Condition Census, rarity levels, and frequency of appearance for branch mint gold coins. I can cite numerous rare coins that have appeared in as many as five or six auctions over the course of one year. This is compounded by the fact that this exact coin may have appeared first as a PCGS AU-58, then as an NGC MS-61, then as a PCGS MS-61 and finally as a NGC MS-62. Same coin, four different holders. If you do not carefully track these appearances and study the plates in the auction catalogs (or view the coins in person), you can make some incorrect assumptions about the rarity of rare date U.S. gold coins.

VI. A New Type of Dealer Starts Buying Dated Gold

Until recently, the number of dealers who were serious buyers of rare date U.S. gold coins was fairly small. They tended to be knowledgeable purists who bought coins for collectors. They were stable in their business endeavors and didn't look at every coin as an upgrade or "breakout" opportunity.

This all began to change as price levels increased and value spreads widened. Suddenly, a date might be worth $1,500 in Extremely Fine-45 and $7,500 in About Uncirculated-50. The possibility of upgrading a coin from this proved to be extremely tempting; especially after grading standards became more loose.

The rare date gold market was then invaded by "crackout" dealers who would buy a wide range of coins in a wide range of grades. This type of dealer thinks nothing about submitting a coin five, ten or even fifteen times before he gets it into the "right" holder. If this dealer does not keep very careful track of the PCGS or NGC inserts from each of his submissions, the possibility of some--or all--of them becoming lost is great. I can cite numerous examples where the PCGS or NGC population for a truly rare coin is now totally out-of-kilter because one dealer submitted a coin ten times then either lost the inserts or is holding onto them for some reason.

VII. A Case Study: The 1840-C Half Eagle

To prove--or disprove--my thesis, I thought it would be interesting to look at a specific rare date gold issue and analyze its rarity. A good example is the 1840-C half eagle. This was a coin that I once believed was very rare in all grades and I would become excited whenever I had the opportunity to purchase an example. Today, I still think this is a scarce issue but I no longer seem to care about 1840-C half eagles when they are offered to me.

When my book "Charlotte Mint Gold Coins: 1838-1861" was published by Bowers and Merena in 1987, I estimated that 55-60 1840-C half eagles were known with just four or five of these in AU and none in Mint State. In 1999, I published a revised edition of this book and suggested that there were eight to ten known in AU and another one or two in Mint State. The May 2000 PCGS Population Report shows sixteen 1840-C half eagles having been graded in all AU grades and one coin in Mint State while the May 2000 NGC Census Report shows another sixteen in AU and three in Mint State. Has the 1840-C half eagle really become this much more available in the last decade and a half?

The answer is multi-faceted and somewhat complicated. I was clearly too conservative in my 1987 estimates; both in terms of this date's overall and high grade rarity. My 1999 estimates are more realistic but still probably on the low side. However, the PCGS and NGC population figures for this date are ridiculously inflated. The actual number of true About Uncirculated 1840-C half eagles is more likely in the area of a dozen pieces. There are three true Mint State coins that I know of and I was not aware of any of these in 1987 and two of them in 1999. The third is a coin that only recently "came out of the woodwork."

I believe that the following conclusions can be reached in regard to this date:

The PCGS and NGC population figures are inflated due to resubmissions. Many of the coins graded AU-50 and AU-53 by PCGS and NGC are coins that would have been graded Extremely Fine in the 1980's and early 1990's. A few very high grade pieces came on the market (the finest known Pittman coin, graded MS-64 by NGC and the PCGS MS-62 Milas coin which first surfaced in the 1994 James Stack sale). Both of these coins had been off the market since the 1940's and I had no idea that they existed until they reappeared. Price levels for this date have risen to the point that few collectors can afford to buy high grade 1840-C half eagles. Thus, this is now an "investor coin" in high grades and, as a result, the overgraded high grade pieces that exist tend to bounce between dealers and in and out of auctions.

Are rare date gold coins not as rare as we have been led to believe? In some cases, the answer is yes but in most cases I feel that a combination of factors have conspired to distort the true rarity of these issues. Hopefully, the next generation of collectors will be able to make sense of this increasingly confusing jumble of data.