The most widespread coin grading system in use today is based on the Sheldon 70-point scale. Before the Sheldon Scale was widely adopted, collectors described their coins using an increasingly complex collection of subjective terms. Collectors today need to have at least a basic understanind of what these terms meant, and how they relate to the Sheldon Scale, because it is still very common to find coins in 2x2's and flips bearing these older designations.
The Earliest Coin Grading Systems
The earliest coin grading systems were very simple. The first coins which were collected were ancient coins, which have been emerging from the soils of the vast former Roman Empire for almost 2,000 years, and which are still being found in great numbers today! Ancient coins were the subject of numerous Medieval and Rennaisance books, but there is rarely any mention of a coin's grade or condition in these tomes; numismatists were primarily interested in the types (the devices and legends appearing on the coins.)
Coin Grading Scales Evolve
By the mid 18th century, dealers occasionally made a distinction between a coin that had an "excellent" appearance versus one that was unremarkable (and therefore not remarked upon, condition-wise.) At the turn of the 19th century, people still didn't collect contemporary coinage, and those who collected ancient coins were few and far between. Coin collecting at this time was truly the "hobby of kings," since they were practically the only ones who could afford it! Coins weren't collected for their grade; they were collected for their types.
The first real interest in collecting the contemporary coinage of the U.S. came in the late 1850's, as the U.S. Mint began issuing the first of the Small Cents, the Flying Eagle type cent. People became nostlagic for the big old pennies they had always known, and they began pulling them out of circulation. Some people even tried to find one of each date, and thus the hobby of collecting U.S. coins took off in earnest.
The First Coin Grading Standard
As people attempted to complete their penny sets, they began to gain an awareness of replacing a specimen they already had with a better one. Coin dealers emerged to help people find these better specimens, and a distinction was made between a "pretty good" specimen and a "rather poor" specimen. Soon, more distinctions arose, such as "uncommonly fine" and "quite uncirculated."
A Standard Coin Grading Consensus Slowly Emerged
Numismatists and collectors debated the subject of creating a standard coin grading scale for decades before some kind of consensus was reached. Along the way, certain standard terms came into common usage. The first four were poor (sometimes called basal,) good, fine, and uncirculated. The factor which usually drove the addition of grades in between these designations was price. When a coin that was fine was worth $3, but a coin that was uncirculated was worth $10, what about the coin that was in better condition than the average fine specimen, but just didn't quite make uncirculated? Perhaps this specimen could sell for $7 because it was very fine.
Intermediate grades continued to be added this way, until a consensus emerged, solidified by the 1958 publication of A Guide to the Grading of United States Coins by Martin Brown and John Dunn. Also emerging was the notion that one size didn't fit all coins, and so grading became more specialized relative to the type under consideration. For example, you took different things into consideration when grading a Buffalo Nickel than you did when grading a Large Cent. This concept gained widespread acceptance and popularity with the 1970 publication of Photograde, by James F. Ruddy.
The widely accepted coin grading standard at the point of the "grading revolution" in the mid-1980's was the so-called adjectival scale.
The Coin Grading Revolution and the Sheldon Scale
The Sheldon Scale of coin grading was developed by Dr. William Sheldon in 1949, and sought to give a more precise meaning to subjective (and often abused) terms such as Fine, Very Fine, Extremely Fine, etc. Although coin collectors were aware of Dr. Sheldon's scale, it was the advent of the third-party coin grading services in the mid-1980s that made the Sheldon Scale the norm today.
The biggest challenge in any coin grading system was minimizing the subjective factor. Two different experts could examine the same specimen and arrive at different opinions of the grade because the standards up to that time has been mostly subjective. By using the consensus grading approach (3 experts independently review the coin) using published, objective criteria, the early grading services were able to establish a reputation for reliability and objectivity in grading that was heretofore unknown. Learn more about the Sheldon Scale.
