AU May be Today's MS Coin
By F. Michael Fazzari
teaching at the American Numismatic Association
Summer Seminar, at the end of June I purchased
copies of Making the Grade by Beth Deisher and
Grading Coins by Photographs by Q. David Bowers
to use for the beginning grading class.
I wished to demonstrate to my students that the
criteria for particular grades have changed with
the publication of each major grading reference
from Brown & Dunn, through Photograde, the ANA
Grading Standards for United States Coins,
Making the Grade and now the new Bowers.
Guess what? One of the best kept secrets and a
source of confusion for beginning collectors
regarding the way professional dealers and
grading services view the uncirculated grade has
finally been exposed in very clear language.
While reading the introduction of Grading Coins
by Photographs, I came upon these statements:
"the interpretation of Uncirculated or Mint
State is more liberal than it was 30 or 40 years
ago" and, "Today, such coins that used to be
graded About Uncirculated (AU) are now often
graded as MS-60, MS-61 and MS-62."
I couldn't believe it.
Although this fact was nothing new to me, I was
shocked to see it expressed in print. The truth
is finally out in the mainstream as exposed by
no less an authority than Dave Bowers in
association with leading numismatic grading
Has what you just read registered? Hallelujah.
The gate is open, the muzzle is off and the dog
Many coins that are AU by the old standards are
now considered Unc.! Let's examine this
situation to see how it may affect you and your
The word "uncirculated" itself is problematic.
For many, the word implies that a coin never
circulated in commerce; yet in order to grade
properly, you must forget this concept and judge
each coin on its own merits.
I have personally picked a flawless $1 gold coin
from a pile of assorted coins, dirt and debris
dumped on my desk from a rotting black change
As soon as that coin was carefully removed, it
became a gem uncirculated specimen with no
marks, no hairlines, and blazing full mint
luster even though it had definitely circulated.
How does that happen? You might be interested to
know the rest of the story.
After selling it to an investor (her first gold
coin purchase), the coin was returned in a week
for a refund. She had showed her purchase to
several dealers in order to satisfy herself of
its grade. It came back to me as a hairlined
Grading is evolving and will continue to evolve.
Many reading this column remember when the grade
"about uncirculated" didn't exist.
Years ago, as soon as an uncirculated coin
showed signs of wear, it was graded extremely
fine. Let that sink in and visualize how
attractive an extremely fine coin once was. Even
coins graded very fine at the time had much of
their mint luster remaining. That was in the
past; but it does illustrate how much standards
can change over generations.
Long ago, it was easy to determine if a coin was
uncirculated. Uncirculated coins had no trace of
wear. I can remember a case where a major
auction house threatened to sue us for grading a
$1 gold coin AU-58. The firm said they had sold
the coin to the consigner as Choice Uncirculated
(MS-65 at the time) and it deserved to be
auctioned at the same grade when he wanted them
to sell it.
The coin in question was a slider. It had nice
fields and luster but there was friction wear on
its high points. It possibly resides in an MS-63
or MS-64 slab today, depending on its eye
appeal. Soon after, another auction firm started
using the term "cabinet friction" to describe
similar "uncirculated" coins with a trace of
friction wear! You see, a coin was uncirculated
if you missed the wear or ignored it and about
uncirculated if you saw the wear and loss of
luster or were a strict grader.
On Page 19 of Grading Coins by Photographs there
is a photo of a $20 coin begging the question is
it AU-58 or MS-64? I can remember a Federal
Trade Commission court case with just such a
range of grading opinions from the expert
witnesses. I graded the coin technically. The
knee, breast and wing had dull hairlined patches
- traces of wear, therefore AU.
Other experts either didn't see the wear or used
market standards to reach grades of MS-63 or
MS-64 for the same coin. This situation has not
changed in all these years except that now
leading numismatic grading experts finally have
acknowledged as much in print.
As a matter of fact, the strict interpretation
of uncirculated went by the wayside at least 25
years ago. I was there to see it happen and
speak against it.
Why should "standards" change? There are many
reasons, including the need by collectors to buy
coins in the highest grades. Additionally,
strictly uncirculated coins by the old standards
are truly rare for some coin types.
I can still remember the astonishment I felt
while holding the first Barber half dollar that
we graded Choice Uncirculated (65) for our
internal records at ANACS in Washington, D.C.
The coin was a completely original, perfect gem
that looked like a modern silver Eagle! I had
never seen such a fully lustrous Barber coin
before. It made all the halves I had previously
seen at coin shows being sold as uncirculated
look like dull sliders.
Thankfully, with the coming of the major grading
services, today's collectors can find coins as
nice as that Barber relatively easily.
I teach my students that they must set their own
standard for the uncirculated grade. They need
to decide how much "rub" they will tolerate on a
coin before it becomes about uncirculated to
them no matter what the coin's grade is on the
Since grading is still evolving, the more
conservative they are, the better. More people
will wish to purchase their coins when the time
comes to sell.
I use this example in class. The diamond trade
has a standard of 10-power magnification to
determine that a diamond gets a flawless rating.
Nevertheless, when I go to buy a diamond and the
dealer puts four "flawless" gems under his scope
for me to view at 10X, I reach up and zoom to
the highest power. Then I'll pick the stone with
the fewest defects at that power. The standard
for "flawless" may change in the future; yet
I'll be covered.
It's good to be a conservative grader when
buying, but loosen up when you sell. I learned
that lesson when one of the nation's best
graders and biggest dealers looked through a
group of coins I offered for sale. He flipped
the pages and stopped at a blazing AU-58 1917
Type 1 Standing Liberty quarter.
"How much?" he asked.
I told him he didn't want that one because it
was an AU.
"How much?" he insisted.
I gave him a price; he pulled it out and wrote a
check. I'm sure that beauty became an MS-64
overnight. I was a strict grader with little
knowledge of the coin market at the time.
I still maintain tight technical standards for
uncirculated coins in my personal life; yet this
view of coins must be relaxed in a grading
Since 1986, the major grading services have
strived to equate a coin's grade with its value.
A quick way to explain this rational is to
compare two coins, a strictly original, fully
lustrous, bag marked, truly uncirculated MS-61
with a lustrous, virtually unmarked, AU-58
slider. Everyone prefers the attractive slider
in this case and it sells for more money.
Realistically, if you are patient, you can find
identically graded uncirculated coins in slabs
but one will have full luster and no rub while
the other will have a market acceptable amount
of wear. That's what Bowers alludes to when he
writes that the interpretation of uncirculated
has become more liberal. Dealers accept a
certain amount of friction on many of the
uncirculated coins they buy and sell because
there are not enough truly uncirculated coins
around in some coin series to meet the demand
A former colleague of mine once facetiously said
let's call every coin submitted for
authentication genuine. That will make the
counterfeiter happy, the dealer happy, and the
customer happy. In much the same way, graders
could call every coin with lots of luster
uncirculated. This would make everyone happy.
Now, that's a novel thought.