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If you collect coins then the refrain 'learn to grade coins' probably goes around your head like a broken record. If you're going to submit coins to PCGS or some other third party coin grading companies don't go thinking that this negates the need for you to grade your own coins. As far as I am concerned it makes it doubly important. We've just posted up an article over at The Purple Penny on the importance of grading coins for yourself. Please go over there and take a look, I'd like to think it's well worth a read!

We were lucky enough to receive some comments from a reader of the blog who has some experience as a copper artist and also happens to be a coin collector. His comments were in response to the recent post about PCGS and Perth Minted Australian Copper. His comments can be found below.

Hi, Regarding the October 09 article on PCGS gradings and rainbow copper coins. While my following comments should not be in any way taken as an accusation I think the reason that PCGS is not inclined to accept such rainbow coins as "genuine" is this "Rainbow Effect" can be brought about with fresh copper by the simple use of a Blow Torch. I know this because I use to do Copper Art at one time as a hobby. There is also a chemical that can be purchased that is sold in Craft Shops that will also give "rainbow" effects to fresh copper. Personally as a Coin Collector and ex copper art artist I am always very wary of any "Rainbow Copper Coins". That is not to say they don't come about this way purely by natural means. However, I can well understand PCGS being nervous to put their name to such coins. Great photography and very intersting article.

Our Response:

Thanks for your input regarding this, we strive to post accurate information from reputable sources. Would you mind if we post your comments (anonymously of course) as a potential cause of this effect? In the USA artificial toning is common practice so I realise it must be difficult. The whole idea of the article is that it is well known by Aussie numismatists that Perth copper does come in spectacular colours and PCGS should be aware of this.

The learned gent was kind enough to reply again:

Like you say there are natural processes where copper will go those rainbow colours by its own accord. However, it is more rare than common as the pennies/half/pennies are not completely copper as you realise they are a form of bronze with two additional metals. It becomes much more difficult for bronze to reach that colour level. The more pure the copper the easier the colour. Annealed will show those colours in areas when heated. If you ever watch a Gas Fitter at work you'll see the copper tubes go multi-colour while using brazing torch etc. Too much heat and the copper will go almost dark/brown/purplish. It is an interesting subject and as I said originally there is no intention on my behalf to say it doesn't happen naturally with Perth Mint Copper Coins. Just suggesting a reason why PCGS might be reluctant to accept same.

So here we have some reasons why PCGS might reject rainbow toned coins, and given the huge premiums rainbow toned US copper coins can garner I can understand this caution. Of course this doesn't apply to most Australian copper, rainbow toned copper are usually later common date coins and of low catalogue value. Also, while Australian rainbow toned coins can command a small premium over their more plain brethren it is never very much, a few tens of dollars at most, and one wonders if it is worth 'doctoring' a coin for such a small benefit.

There's some other things to take into account too. Firstly, rainbow toned Perth copper isn't common, it is much easier to find reddish or brown Perth copper and very nicely rainbow toned coins are quite scarce. Secondly, rainbow toned Melbourne minted copper is almost non existent in comparison to Perth minted material. If someone was out there doctoring coins why are they only doing it to Perth minted material and not those coins minted in Melbourne? The answer of course is that in almost every case the toning is natural and a result of the different ways planchets were prepared in the two mints and the way the coins were struck! For example, why are Perth minted coins so often found with spotting and Melbourne coins not? The Perth mint washed their planchets (before or after striking I am not sure) and the Melbourne mint did not! Secondly, Melbourne minted copper coins of the 1950's and 1960's are, on the whole, much more strongly struck than Perth coins, and it is my experience that the most eye popping rainbow toned coins are also the worst struck coins the Perth mint released!

Now none of this is intended to dis-credit the kind reader of this blog whose comments are found above. After all if you read his responses you'll see that he's not suggesting that rainbow toned Perth copper is artificially toned, but rather why PCGS might think it is artificially toned. My responses to his post have just pointed out to PCGS why rainbow toned Perth copper coins are almost always naturally toned. They are not fiddled with or manipulated like their American brethren can be. Here's hoping someone out there can educate them and we can get these lovely coins protected and graded by a good third party grading company!

Above you can see two lovely rainbow Perth copper coins that were submitted to PCGS for grading. My apologies for the quality of the image of the half penny, I didn't get a chance to image the coin before it was sent away and getting the rainbow toning to show up through the coin slab is problematic at best. Both of the coins show very typical Perth rainbow toning that is so valued by some collectors. Colours appearing are very typical, brown, gold, blue green, reds, and even hints of violet.

The coin on the left was broken from an original bank roll immediately before being sent to PCGS, the one on the right came out of a push in coin album where it had sat for a number of years. Sadly, the penny on the left came back graded as "Genuine" with the code 91, which means 'Questionable Colour'. The one on the right came back as MS65RB. I'd like to say definitively why PCGS rejected the coin on the left and accepted the one on the right, but I simply cannot. A month after the penny was rejected I am still scratching my head as to why. It is a lovely coin with glossy surfaces, well struck for a Perth coin, and exhibits attractive rainbow toning. The half penny fits the same description exactly. And because of this I sent the half penny to be graded immediately after the penny to see if it too was rejected. Inexplicably it wasn't!

The only theory I have is that one or more graders at PCGS simply do not have enough experience with Australian coins, and Perth minted copper coins in particular. These rainbow toned coins are completely original and un-tampered with and deserve to be graded as the GEM coins that some of them are. There's probably not a lot we can do in the short term to educate PCGS. However there are dealers in Australia that submit many dozens of coins to PCGS and I am sure that with emails or phone calls to the right people at PCGS would result in PCGS being educated appropriately.

The warning for Australian collectors who are thinking of submitting rainbow toned Perth minted copper coins to PCGS is be aware that despite the beauty and originality of your coins, there is some chance that they may be deemed as having 'Questionable Colour' and will not receive a grade. It's times like these that a possible submission of these coins to NGC is in order, NGC has more world coin slabbing experience than PCGS and will most likely slab them with a grade rather than as artificially toned.

If you're into collecting PCGS graded coins at all then you're almost certainly aware that PCGS (and the other major third party grading companies) grade mint state copper coins with a colour code. These colour codes (RD for red, RB for red brown, and BN for brown) try to describe the colour of a coin, but a coin is far too complex a beast to be able to be described with a simple two letter code. So, lets take a look at a few coins.

One of the coins above has been designated as RB (red brown) and the other as RD (red). Which is which?

Is the coin on the left a RD or RB coin? What about the one on the right, RB or BN (brown)? What does RB really mean anyway?

The coin on the left is an attractive rainbow half penny oozing eye appeal, the one on the right an even brown coin. Both are designated as RB and one is graded 1 point higher than the other. Which is the higher grade and which is more desirable?

I've answered all these questions (and several more) over on the Purple Penny website, in the new article PCGS Graded Australian Copper Coins and Colour Codes. It is well worth the read for anyone interested in collecting or buying slabbed Australian copper coins.

We've just written a pretty comprehensive article on what it means to have a coin graded by PCGS, how it is certified, and how PCGS records and tabulates the data about coins it has graded. It's available over on the the Purple Penny website and is titled Understanding PCGS slabbing, certification and the Population Report. Please take the time to head over and give it a read!

I've just been going through the process of making my first submission of coins for slabbing to PCGS (The Professional Coin Grading Service). If you are not sure what this means it might be worth taking a look a the short series of posts I made about Third Party Grading Companies. Because I am based in Australia, and the process of submitting coins seems to be, well, rather bureaucratic this hasn't actually been the easiest thing to do.

Firstly, to submit coins to PCGS you must either join their member program or use a PCGS Authorized dealer to submit the coins for you. I chose to submit the coins myself because there's no authorized dealer in the city I live in. The dealer I have used in the past to submit coins for me had decided to stop submitting coins for the time being because of the poor Australian / US Dollar exchange rate. So, I decided to join up with PCGSs 'collectors club' and submit some coins myself. The Collectors Club includes three levels of membership. Each level gives you a number of free submissions each year as well as access to different features of the PCGS website, including the population report and PCGS price guide. Membership lasts for one year and includes a free quarterly grading specials (usually a US coin of some sort).

PCGS were offering discounted memberships in late 2008 so I decided to join up with Platinum membership which entitled me to 8 free 'regular' coin grading submissions. A 'regular' submission allows you to submit any coin worth less than US$3,000 as long as it is not a mint error or special issue. Free submissions sound great, but there is still a handling charge for the free submissions ($8 or so per order) and you still have to pay for insured shipping to and from PCGS. This is not too bad in North America, but down here in Australia you are looking at at least US$50 for just return shipping which is about AUD$75 at time of writing. So free isn't quite free, but still, regular submissions are worth US$30 each and the discounted joining fee was $180, so it was pretty good value.

Upon joining PCGS send out a new members pack containing all that you should need to make your first submission and new member information. This pack only took a couple of weeks to arrive here in Australia, which considering it was the Christmas / New Year period was pretty darn good. The pack contained the free submission voucher, detailed coin submission instructions, 8 2.5" mylar flips and adhesive labels, 3 submission forms, and the catalog of their coin numbering system. You can see the contents of the pack in the image at the start of this post. The 'US Centric' nature of PCGS really shone out with the member pack. The submission forms were all US Coin submission forms, and the catalog of their coin numbering system was for US coins only. So essentially these two items were useless to me because I wont be submitting many, if any, US coins to PCGS. PCGS should really allow new members to select if they will be submitting world or US coins at time of joining and the new member packs should be tailored accordingly. There's more coins in the world than simply US coins, and the number of world coins submitted to PCGS will only grow, and they should be preparing for this now, not later!

In the next part of this series I'll cover the submission process, including packaging the coins and filling out the forms. In later parts I'll cover the coins I'll submit and have a go at grading them so I can compare these grades with the grades returned from PCGS. Expected turn-around time for the coins is 40-60 days so I'll have plenty of time to think about it!

The Problems with TPG's

The real problem with TPG's is that graders are still human, and the grades assigned to coins are still subject to human opinions and the grade of a coin cannot be expressed adequately with just some letters and numbers.

• The numerical grades adopted by TPG's do not inform purchasers of other factors affecting a coin value. For example, two MS64 coins may have the same numerical grade, but one may exhibit the remnants of a fingerprint, or have unattractive toning. These factors are not noted on a coin holder.
• The grade given to coins of a given series is very dependent on the experience of a grader with that coin series. Typically the TPG's are very experienced with US series and less so with world coins. This can leave non US collectors scratching their heads when getting non US coins graded.
• The numerical grading system used by TPG's does not translate directly to the adjectival grading system used in some non US countries, leading to confusion and possible deception on the part of coin sellers.
• Grades between TPG's are not the same. For example PCGS is renowned for being a tougher grader of coins than NGC. So a NGC MS64 grade does not neccesarily mean the same coin will receive the same grade in a PCGS slab.
• Grading standards change in time. For example, PCGS is currently very tough on US Morgan dollars, and many collectors acknowledge that coins graded in the 90's by PCGS would likely receive lower grades if graded today!
• The coin slabs themselves can be counterfeited leading to either incorrectly graded coins or counterfeit coins entering the market.
• The TPG's can just get it wrong. I have seen examples of Australian coins in TPG slabs listed as proofs when it is well known that no proof coins of that coin and year were ever produced.

In the final part of this series I'll draw some conclusions and provide you with some further reading.

The Advantages of TPG Graded Coins
Given that a TPG is truly independent and professionally run by experienced coin graders there are definite advantages in purchasing coins graded by such companies.

• You can be more assured of the grade of a TPG graded coin.
• You can be more confident when purchasing a coin sight unseen or just on the basis of images. This is especially important in the age of the internet and online coin auctions.
• Coins are securely protected inside of the coin slabs, safe from physical and environmental damage.
• The tamper proof slabs lessen the likelihood of coin swapping by unscrupulous dealers.
• You can be more assured of the coins value on the basis of it's grade. Some of the TPG's provide price guides on the basis of coin grades.
• You can be more assured of the coins authenticity and lack of problems if it gets into a slab.

There is no doubt that TPG grading makes for a more liquid and more confident coin market. However, TPG's are not without their problems and I will discuss this further in part 4 of this series.

Third Party Grading Companies Start

To try to level the playing field the American Numismatics Association formed the first third party grading company in 1972. ANACS (the American Numismatic Association Certification Service) offered to grade and authenticate coins on an impartial and fee for service basis and return them to collectors. The aim of ANACS was to provide collectors a service that would grade and authenticate a coin completely independently without any bias. This would help bring confidence to the coin market and allow for less conflict and trouble in the buying sight unseen coin market.

Since the founding of ANACS many more TPG's have been founded. Currently PCGS (Professional Coin Grading Service) sit at the top of the TPG heap, with NGC (Numismatic Guarantee Corporation) and ANACS being excellent but less well regarded grading companies. The major US grading services will grade and authenticate coins for collectors and if a coin is found to be genuine and not a problem coin they will return the coin in a 'slab'. A slab is a sonically sealed plastic holder for the coin that includes a label with the coins type and grade.

There are third party grading companies in other countries (such as the Canadian Coin Grading Service and Coin Grading Australia) but these generally do not currently supply coins in tamper proof slabs. This leads to possible coin swapping and fraud on the behalf of coin sellers. They do have some advantages though, as they may be better at grading their local coins than the major TPG's in the US. This is simply because they have more experience with the local currency, the nuances of each denomination in terms of strike quality from year to year and so on.

In the next part of this series I'll cover some of the advantages of using third party grading companies.

Coin Grading, a difficult problem

Grading coins is a very subjective topic. The grade of a coin depends not only the amount of wear of a coin, but also the quality of the strike, bag marks, luster, eye appeal, rim condition, and many other factors. Very few of these factors can be easily quantified on any measurable scale, and even when trying to do so each factor is subjective and can vary depending on who is grading a coin. Thus, any single coin can be assigned a different grade when given to different coin graders. It can vary depending on experience of the grader, the type of coin being graded, how 'tough' a person happens to be grading a coin, or even the day of the week.

Of course, the actual grade of a coin is critical, with the same graded almost uncirculated versus uncirculated potentially having values 100's or 1000's of dollars different. The potential conflicts in grading a coin become even worse when buying and selling coins. It is natural for sellers to tend to over grade a coin to get more money, and buyers to under grade coins to get them cheaper. Particularly unscrupulous sellers will go out of their way to over-grade coins to dupe novice coin collectors who are unable to grade coins. Even worse is when counterfeit or cleaned or altered coins are passed off as genuine or non problem coins. Clearly this is a problem that needed a solution.

In part 2 of this series I'll cover the origins of the third party grading companies.