jody526

The Sheldon Grading System Explained.

From time to time we see the current 70 point grading system referred to as being developed by Dr. William H. Sheldon. For the benefit of those who are not familiar with Dr. Sheldon’s works, here’s a summary of what he did, why he did it, and the approach he took.

It might help to know a little about Dr. Sheldon’s background. He was born in 1895, and based on his writings, became involved in numismatics at an early age. While still in high school, he claims to have appraised Cents for a coin dealer in his neck of the woods, and more interestingly, using a 70 point grading scale. That would be somewhere around 1910. Once you understand the system he developed in 1948, it becomes clear that given the amount of information available to him back then plus the amount of research necessary to develop the final product, chances are his original system was somewhat different than the end result.

Over the years, Dr. Sheldon assembled sets of early Large Cents on three different occasions. The last collection contained all 295 of the known collectible varieties from 1793 through 1814. Everyone agrees that he was an aficionado of Cents from that era and his expertise was well respected.

In 1948 he published EARLY AMERICAN CENTS which was basically the same as his later book less the updates based on new information. As much as Dr. Sheldon was respected for his expertise of the early Large Cents, his book and the concept he promoted was thought to be a “whimsical” idea. Apparently as a light hearted response to that depiction, Dr. Sheldon titled the revised edition PENNY WHIMSEY.

In developing his system, Dr. Sheldon starts out by determining the value of each variety of Large Cent in what he calls “basal state”. This he defines as identifiable and not mutilated, and assigns the numerical grade 1 (one). Everything that follows is predicated on this grade one value. Based on his research, he determined that a coin in what he calls “fair” condition, was valued at twice that of basal state and therefore he assigned the numerical grade of 2 (two). A typical “fine” being valued at 12 times basal was given the numerical grade 12 (twelve), and so on down the line up through AU55. So the numerical grades he established were determined by the multiplier he needed for his system. I’ll get to the MS information later on in this post.

Having determined the basal value for the various varieties of early Large Cents, and having determined the grade (and therefore the numerical equivalent), it was simply a matter of multiplying the two together in order to get the “approximate value” for a given Cent…….PROVIDED it was a common variety and readily available in that condition. Now, if it happens to be a scarce or rare coin either because of availability or condition, than you have to apply another multiplier to the system, and that is based on a set of ten “rules” that he developed. I’ll explain those within the MS grading descriptions.

From “poor” or “basal state” through AU55, there really isn’t much of a problem using Dr. Sheldon’s numerical scale as it can be understood by most reasonably experienced collectors. It’s in the area of MS coins where things get interesting.

Dr. Sheldon uses THREE MS grades in his system. Keep in mind that he selected the numbers 60, 65, and 70 because those were the multipliers he needed to fit his system. If the lowest possible mint state grade needed a multiplier of 80, his system might have ended up being 1-100! Here is his description for the MS grades.

“Free from any trace of wear, and the color should be that of copper coin which has been kept with great care. The color will vary from mint red to light brown or light olive, according to the chemical content and moisture of the prevailing atmosphere in which the coin has been kept. The light brown and light olive colors indicate the first beginnings of a protective patina, or surface “set.” When these colors are attractively blended and permanently set on a mint state early cent, the coin is as highly prized by discerning collectors as is one of brighter color. For condition 60 a minor blemish, perhaps some microscopic injury, or light trace of discoloration may be tolerated. For condition 70, the coin must be exactly as it left the dies, except for a slight mellowing of the color. Condition 60 means Mint State. Condition 70 means PERFECT Mint State.”

He doesn’t define the 65 grade.

Once we have the numerical grade multiplied by the basal value, we need to figure out which of the ten rules apply to the coin in question. Before we can do that, we need to know the census for that coin as well. So, in order to use this system, we need to know the grade, the basal value, the population from the top down to about the sixth finest, and which rule to apply. For example, rule number nine states that “If full MS-60 or better, but not known to be among the first three, Value equals Condition times Basal Value times 2.”

Here is an example of how the system works for a 1795 Cent, right out of his book.

The condition census is 70-70-65-65-65-65. For the 65 coins, we apply rule number 10 which says to apply rule number 8 to the first 65, and rule number 9 to the other three, average the results, multiply by the numerical grade, and multiply that result by the basal value. Everybody got that?

In case you didn’t notice, in that particular example there are not one, but two MS70’s. When was the last time you saw an MS70 1795 Large Cent of any variety or any other denomination dated 1795 using the standards developed by the ANA back in 1977? As you can see from the above, the only thing the current system took from Dr Sheldon’s work is the use of the numbers 1 through 70.

iipnd

bruce 1947

Jody.
Thanks for the info it was very interesting first time I had read that.

Bruce.

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jody526

Thanks, Bruce.
Actually, a friend composed it, but I wanted to share it with you all.

bqcoins

Its a good read, and always great to revisit our numismatic "roots"

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green18

Very interesting and informative Jody. I don't know how the good doctor did his grading without a calculator (LOL). Hey...again thanks for that info on medals that you put me on to a few days ago. Would you know of a recently published book (say on the order of the "Red Book") that could be used in finding out more about medals issued by the US Mint? Everything that I come accross is years too old.

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900fine

Slide rule ! whoo wee

Interesting thread. Thanks !

Dima

Very interesting read; thanks.

According to current standards, is it technically possible to get a MS70 coin? I always figured that the second a coin leaves the minting press it is at best MS69. Can anybody clarify this please?

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cncman

I think the real question should be why we use a system developed by a crook and a thief?

Hobo

For the same reason many of us use reference books written by a pedophile - the information is useful.

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bhp3rd

Up until modern times you would be correct and only if coins made for commerce were graded, coins intended for circ. - which is probably the way it should be in a perfect world.
All proofs, American Eagles, Modern Commemorative, for that matter mint sets have a built in advantage from start to finish - they are made using standards that business coins simply don't get - they really should be graded separately IMO.
As a matter of fact, and we have argued this recently on Coin Talk one could support an argument that those coins mentioned are not really coins because they do not, were not, intended for commerce, that plus their primary purpose is int fact something other than coinage with value inherent for purchasing in the United States.
Isn't it very interesting indeed that about the time American Silver Eagles were started (1986) the first (PCGS) grading company also started.
I have never put the two together until this moment and to throw those(mentioned above) coins in the same bunch as made for circulating coinage puts the business strikes at a disadvantage form the get-go.
It's not very hard at all to grade a coin that was struck special, handled special, packaged special and never dumped in a tub but protected all the way into the customers hands. I mean, what are your choices, MS or Proof 67, 68 or 69 or the probably should not be reached lofty grade of MS or Proof 70.
Just some thoughts on the subject - you may like what you like, I sure do.

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mrbrklyn

I can't nominate this thread...

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Hobo

I have never heard of a numerical grading system being used that early. Literature that I have read concerning grading during that era only referenced descriptive terms used for grading (e.g., Good, Very Good, Fine, Very Fine, etc.)

I could be wrong but I thought Sheldon created his scale only to determine the value of Large Cents and later - in the late '60s or early '70s - others adopted his scale to be used in grading.

__________________
No state shall emit bills of credit, make any thing but gold and silver coin a tender in payment of debts, coin money . . . - US Constitution, Article 1, Section 10

ANA LM-3799; OHNS LM-59; SUSCC R-4005. All coins stored in bank safe deposit box.

tommyc03

Ah, how I remember the good ole days. The MS system was a gimmick developed by a crook for sure. It was invented for the investors and wheeler dealers who needed an excuse to get more for their coins then they were really worth. Then they did it with lunch boxes, stamps and finally comic books. it left the little guy out all around. If honesty were still the best policy, we would still have everyone grading by the old standards for sure.

timothytrout

What exactly ARE the old standards? I'm new to this, but based upon the base 10 numerical system we use - also arbitrary, but it has attained mass usage - I would say that a 100 point grading scale would make sense. Like measuring temperature in Celsius. . . but then again, why would we do that?

fretboard

So how much does it cost to have coins graded, I heard on one of the auction channels that it cost $30 bucks a coin, is that true?