Is there a third party grading company rarity quota?

Is there a third party grading company rarity quota? I read a forum post about one bulk submission - the poster said most of the grades seemed off, and the entire box seem to suspiciously follow a bell curve.

This leads me to wonder if for every modern coin, there is ALWAYS going to be a very small population of the highest grade. Why can't there be a large population of the highest grade, at least for a few years? Is it realistic that there'd only be a few coins of the highest grade for every single coin year and mintmark known, or could that be from some TPG quota to keep customers interested in gambling with the grading lottery?

Let's stick to business strike coins that come in Mint sets. How could the Mint naturally create only a select few coins of the utmost quality? Are working dies different enough that for some, every coin created is inferior? Why would packaging and handling be so different for some coins but not the others? I can't imagine a variation in creation at the Mint so large that an extremely tiny amount of coins come out elite.

We can't forget that graders are likely looking at so many coins per day that they see coins in their dreams. Are they given incentive to avoid assigning upper echelon grades?

 

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I think that you are missing the fact that dies begin to deteriorate at the first strike, add in striking pressure, mechanical failures, and differences in each planchet and you will find that business strikes were never meant to be fancy/perfect, and without flaws. This is much different than Proof sets which are struck twice from specially prepared dies and handled carefully before being packaged. Mint sets are taken from bulk bags. Every coin that falls into the ballistic bags has the potential to drop the grade of a coin. This is what create conditional rarity's.

 

If you look at high population older coins (Morgan, Peace dollars, classic commems, war date halves, ...) you'll see a similar bell curve. I don't know if the distribution of abuse a coin receives after being struck and before being considered worn is a normal distribution, but wouldn't be surprised if it were.

If you look at the trend of Proof and bullion ASEs, there is a large population in the highest grade and it is a growing percentage of the total population over the past several years. This is due to additional defect mitigation steps taken by the mint, which is fully aware that customers want perfection.

The coins are struck on normal presses and not hand fed, so there is plenty of opportunity for contact with other coins after striking. The mint set coins are no longer just scooped out of a regular production line, though. They are handled with some extra care to make sure they're above average.

As for you question about quotas, you'll never get an official answer to that other than that if the coin fits the grade, it gets the grade. Going back to ASEs, if you look at the pops, the number of 70s is going up. The market needs these to be more special than something, so it's in almost everyone's interest for there to be a significant number of lower grades so that the premium on the 70s more than makes up for the grading cost. One could argue here that this is where quotas come into play at TPGs, and it's reasonable to think that bulk modern graders looking at monster box after monster box of these things are going to become numb to the differences between coins and just start assigning grades arbitrarily to fit a pre-defined ratio. There's no evidence of this other than anecdotal mis-graded coins that are more easily explained by fatigue and human error.

 

Plaudits @GDJMSP ! Many books worth of knowledge summed up into a few well written paragraphs.

 

I wish for things like ASEs (where they are increasingly getting submitted to only holder the 70s) they would add a number submitted to the population so we could see how many didn't make the grade

 

It used to be 70 wasn't allowed as a minimum grade for bulk orders. I don't see that restriction anymore, so I wonder if they allow it now. That might explain part of the 70 population boom, but the TPGs and dealers still need there to be a significant population not graded 70 to make the 70s worth more and therefore worth grading.

 

I have been out of the bulk grading game as a witness for a long time. But from my experience 20+ years ago, the "bell curve grading policy" applied. A dealer I know had several rolls of Sacajawea Dollars graded when they were first issued. Somehow, he thought that collectors were going to buy them.

Coins in MS-66 holders were not as nice as coins in MS-64 holders. It was like the grader threw them all down a staircase and the ones that landed on the top steps were graded MS-66 and 67, and the ones on the bottom were 62s and 63s. The main interest seemed to be to get them into slabs and put a random grading number on them.

Of course, there was a nice mix of grades as one might expect. It’s just the preservation of the coin inside was secondary.

 

The reality is, we will never know unless someone breaks the code of silence.

 

At least for the big boys they were for a while, not sure if they changed back or not. I don't think we'll see a day where they don't have at least some premium though and it only has to be very minimal for it to be worth it for the big guys financially to submit

 

Because, in the business strike world, that’s basically how it is. Proofs and NIFC coins will be highly biased towards 68-70.

Imagine you have a bag of silver dollars. All of the coins are struck by the same dies, go through the same machinery, get thrown into the same bag, and are all jostled by the movements of the bag.

Of the jostling of the bag is normal and not excessive in any way, then we can reasonably assume few of the coins would get royally chewed up, so few would grade 60/61. Those at the bottom of the bag which were victim of higher potential-turned-kinetic energy from the chute would see more damage, so your 60-62 coins would be found there. The rest of the bag would be filled with nicer pieces with some receiving the occasional nasty hit. Based on the nature of heavy coins colliding with each other, the majority will be 63-64, with more and more entering this grade level each time the bag is thrown around. A good many would be spared harsh abuse based on how the coins fell in the bag and stacked themselves, and these would be your 65s. Statistically, the chances of having fewer hits decreases staggeringly each grade point higher. The max grade you find might be a 67 or 68, and there will only be a couple in the thousand coins.

If you plotted the numbers in each grade level, it would be a roughly bell-like distribution, with a leftward bias centering around 63/64. The results you quote do not surprise me in the least.

 

Nope, there isn’t.

 

You all are awesome! I love these responses! I am going to study them and internalize it all later when I get more time. I am grateful for the good information!

 

Comment to your second paragraph!!! Just thinking of those crappy W minted cents. Those were a bust. Seems like they messed up on a bunch of those. Then sent them out anyways

 

I did like the idea of the W minted cents, but a proofs a proof.