At the World’s Fair of Money in Anaheim, Rick Snow gave a presentation on a new grading system called the “PDS Grading System.” It is meant to supplement, rather than replace, the existing grading systems that are out there (in particular the 70-point Sheldon scale). the grading system was invented by Rick Snow to combat over-grading and to seek an explanation for the sometimes wide variations in auction results for what is arguably the same coin. Rick Snow is considered the foremost expert on Flying Eagle and Indian cents, and has published the main reference books for the series. He is a full-time dealer and invented a stickering system for exceptional quality Indian Head cents called “Eagle Eye Photo Seal,” a concept that was later applied by CAC to all series. The entire presentation has been posted to YouTube and can be accessed by clicking here.
Presently coins are graded on a 70-point scale that evolved from a system suggested by Dr. William H. Sheldon in Penny Whimsy, first published in 1949. Coins are graded primarily on the amount of wear they show (grades 1 to 58), while Uncirculated coins (those grading 60 to 70) are judged by additional factors such as luster, hits, and overall eye-appeal. Simply said, a coin graded Poor-1 is completely worn down and barely recognizable, while coins graded MS-70 are perfect even under 5-times magnification. This is the grading scale that third-party grading services such as PCGS and NGC have used since the mid 1980s. Most collectors have become familiar with the system, as it is widely used in the United States and has started to receive traction in other parts of the world as well.
There are a few problems with the 70-point grading scale, such as prevalent over- and under-grading. This comes into play when third-party graders voice their opinion on a coin and the owner or buyer of the coin disagrees with the assigned grade. With under-grading, it is possible to resubmit a coin to pursue a higher grade, but with overgrading it’s different story. Even a single point difference can make a huge difference in value, which means it is very important to look at the coin in a holder, not just the holder itself. Another problem is that there could be widely varying results at auction for what on paper looks to be the same coin. Many factors come into play here, but if there are three different auction results for the same coin and grade, it is hard to figure out what the true value is.
The supplemental grading system suggested by Rick Snow is called the “PDS Grading System” and it takes three factors into account: Planchet, Die, and Strike. Each factor is independently rated on a 6-point scale, with scores ranging from 0 to 5 for a maximum total of 15 points. An average correctly graded coin would get a 9 score, while over-graded coins will score lower, and exceptionally nice coins for the grade will score higher.
The planchet factor takes post-minting attributes, such as marks and originality of the surface, into consideration. Unlike the major grading services, which will not assign a numerical grade to a cleaned coin, the PDS grading system does not necessarily give a “0” score for a cleaned coin, which is a very important difference. Rick correctly points out in the video that cleaned coins should not immediately be dismissed, as they often have other, more positive attributes. The planchet scale is as follows:
5) Close to perfect. Very few marks – close to none.
4) Fewer marks than average, with an original surface
3) Average number of marks; silver and gold might be dipped
2) More marks than average, and/or light hairlines from a past cleaning
1) Evidence of past cleaning. Many marks.
0) Cleaned or heavy marks.
The die factor consists of attributes that are not generally taken into consideration by the grading services when grading a coin on the 70-point scale. Factors such as die states and mirror surfaces (for Proofs) are taken into consideration. The idea is that coins struck from an early die state are more desirable than coins struck from a later die state. The full scale is as follows:
5) Very early die state – deep mirror or matte surfaces for Proofs
4) Early die state. Details are sharp. Some cartwheel effect. Mirrored fields or matte surfaces for Proofs.
3) Average die state. Very little distortion of letters and devices. Moderate cartwheel effect. Dull mirrors.
2) Slightly late die state. Some distortion of the devices and/or letters.
1) Late die state. Significant die wear. Heavy distortion on letters and/or design.
0) Very late die state. Loss of major detail due to die wear.
The final factor that is taken into consideration is strike. Certain issues are notorious for being weakly struck (such as New Orleans coinage of the 1840s) while others are generally well struck. Strike can vary widely from one coin to the other, and many collectors seek out coins that are fully struck. Some issues, such as Standing Liberty quarters and Franklin halves are designated by the strike on certain parts of the design, but there is no universal definition. The strike scale in the PDS Grading System is as follows:
5) Full strike. Full Details.
4) Good strike. Most of the design and letters fully struck.
3) Average strike. Some parts of the design lack definition due to strike.
2) Below average strike. Some detail is close to missing.
1) Weak strike. Some details are missing due to strike.
0) Very weak strike. Major design loss due to strike.
A fourth factor that is independently rated is color on copper coins, ranging from 0% red or brown to 100% red. This is similar to the standards that the major grading services use, except that they do not designate the percentages of red or red-brown coloration.
The idea of the PDS grading system is that coins are rated on the factors above and a combined score is assigned to the coin. According to Rick Snow, you might soon see a grade in an auction catalog for coins such as these (third-party grades are ignored in this example):
Gem AU (13: 4, 4, 5, 10%) or Gem AU (13)
Gem UNC (8: 1, 4, 3, 10%) or Gem UNC (8)
In this particular example, the coin rated as “Gem AU” would be considered a superior to the “Gem UNC,” even though the latter coin might be graded several points higher on the 70-point grading scale. The idea is that if collectors only consider coins that score 9 or higher on the PDS grading scale, this would curb overgrading, as only correctly graded coins would rate that high. Price guides could also benefit if only coins that score 9 or higher are taken into account, as that would mean that only correctly graded coins are taken into consideration when compiling the price guide.
While I think the idea of the PDS grading system is not necessarily a bad one, I’m afraid that, for all intents and purposes, it may not be effective. The problem is that there is no commercial grading service that uses the PDS grading system at the moment, and it is up to the person describing the coin in an auction catalog to start using the system (similar as to how EAC grades are often mentioned in auction lots for early copper coins). This results in what was initially the reason for third-party grading services: people are going to disagree about certain scores, and your “4” score for strike might be somebody else’s “3” score.
The other problem I have is with the “die” factor. While I agree that early die state coins will often have more appeal than a later die state coin (think proof-like Morgan dollars), it should not have as much as an influence as, for example, the strike. Of course that is a personal preference, but I’d rather have a fully struck coin with a die crack or two versus a weakly struck coin that appears to be a product of fresh dies. It is also hard to imagine how the scores would work out in practice. Imagine two coins that have a combined score of 10: one has sub-scores of 3 for planchet, 5 for die, and 2 for strike, while the other has 3 for planchet, 4 for die and 3 for strike. If just the combined score was mentioned, you would think the coins would be merely identical in eye-appeal, but I can guarantee you that many collectors would prefer the second coin.
Even if the system starts to gain traction in the numismatic scene it is hard to imagine that it will have any significant impact in its current form. Personally, I have a hard time explaining the 70-point grading scale to novice coin collectors, and having to throw in an additional 15-point grading system composed of three factors will probably make coin grading beyond apprehension for many.
However, one positive exception could be the new system’s ability to help collectors rank coins according to certain attributes, possibly making it easier to choose between coins by considering their sub-scores. But as always, it is important to look at the coin and not just the holder, and I doubt that this system will do much to change that.