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      Very Good (VG-8)—Well worn with main features clear and bold, although rather flat.

      Good (G-4)—Heavily worn, with the design visible but faint in areas. Many details are flat.

      About Good (AG-3)—Very heavily worn with portions of the lettering, date, and legend worn smooth. The date may be barely readable.

      A star (or similar notation) in the grade on a slab means “exceptional quality.”

      Important: Undamaged coins are worth more than bent, corroded, scratched, holed, nicked, stained, or mutilated ones. Flawless Uncirculated coins are generally worth more than values quoted in this book. Slightly worn coins (“sliders”) that have been cleaned and conditioned (“buffed”) to simulate Uncirculated luster are worth considerably less than perfect pieces.

Unlike damage inflicted after striking, manufacturing defects do not always lessen values. Examples include colonial coins with planchet flaws or weakly struck designs; early silver and gold coins with weight-adjustment “file marks” (parallel cuts made on the planchet prior to striking); and coins with “lint marks” (surface marks due to the presence of dust or other foreign matter during striking).

      Brief guides to grading are placed before each major coin type. While grading standards strive to be precise, interpretations are subjective and often vary among collectors, dealers, and certification services.

       THIRD-PARTY GRADING AND AUTHENTICATION

      In this guide book values from under $1 up to several hundred dollars are for “raw” coins—that is, coins that have not been graded and encapsulated by a professional third-party grading service. Coins valued near or above $500 are assumed to be third-party-graded. A high-value coin that has not been professionally certified as authentic, graded, and encapsulated by an independent firm is apt to be valued lower than the prices indicated.

      What is third-party grading? This is a service providing, for a fee, an impartial, independent opinion of a coin’s grade and its authenticity. The grader is neither buyer nor seller, and has no biased interest in the coin’s market value. Third-party grading started in the late 1970s with ANACS (then a service of the American Numismatic Association; now privately owned and operated). ANACS graders would examine a coin and, after determining its authenticity, would assign separate grades to its obverse and reverse (such as MS-63/65) and return it to the sender, along with a certificate and photograph.

      In 1986 a group of coin dealers launched the Professional Coin Grading Service (PCGS), which grades coins for a fee and hermetically seals them in plastic holders with interior labels. This “slabbing” helps guarantee that a coin and its grade certificate cannot be separated. In 1987 Numismatic Guaranty Corporation of America (NGC) was started, offering a similar encapsulation service. Both companies guarantee the authenticity and grades of the coins they certify. Coins are judged by consensus, with the graders having no knowledge of who submitted them.

      From the 1970s to the present there have been more than 100 different commercial grading companies. Readers are cautioned to investigate the background of a TPG (third-party grader) before trusting in its services.

      Today the hobby’s leading third-party grading firms are NGC (Sarasota, Florida) and PCGS (Newport Beach, California).

      Professional grading strives to be completely objective, but coins are graded by humans and not computers. This introduces a subjective element of art as opposed to science. A coin’s grade, even if certified by a leading TPG, can be questioned by any collector or dealer—or even by the service that graded it, if resubmitted for a second look. Furthermore, within a given grade, a keen observer will find coins that are low-quality, average, and high-quality for that grade. Such factors as luster, color, strength of strike, and overall eye appeal can make, for example, one MS-65 1891 Morgan dollar more visually attractive than another with the same grade. This gives the smart collector the opportunity to “cherrypick,” or examine multiple slabbed coins and select the highest-quality coin for the desired grade. This process builds a better collection than simply accepting a TPG’s assigned grades, and is summed up in the guidance of “Buy the coin, not the slab.” (Also note that a coin certified as, for example, MS-64 might have greater eye appeal—and therefore be more desirable to a greater number of collectors—than a less attractive coin graded MS-65.)

      Over the years, collectors have observed a trend nicknamed “gradeflation”: the reinterpretation, in practice, of the standards applied to a given grade over time. For example, a coin evaluated by a leading TPG in 1992 as MS-64 might be graded today as MS-65 or even MS-66.

      The general effect of third-party grading and authentication has been to increase buyers’ and sellers’ comfort levels with the perceived quality of rare coins in the marketplace. And, as mentioned, there still exists the potential for keen-eyed collectors to cherrypick coins that are “exceptional for their grade.”

       AN INTRODUCTION TO UNITED STATES COINS

       The Spanish Milled Dollar

      The Spanish milled dollar, valued at 8 reales, and otherwise known as the Pillar dollar or piece of eight, has been given a place in romantic fiction unequaled by any other coin.

      This time-honored piece and its fractional parts (one-half, one, two, and four reales) were the principal coins of the American colonists and were the forerunners of our own silver dollar and its fractional divisions. Thomas Jefferson even recommended to the Continental Congress on September 2, 1776, that the new country adopt the silver Spanish milled dollar as its monetary unit of value.

      The coin shown above bears the mintmark for Mexico City. Similar pieces with other mintmarks were struck in Bolivia, Chile, Colombia, Guatemala, and Peru. Average value for an 8 reales Pillar dollar of common date and mint is about $200 in Fine condition. Dates range from 1732 to 1772. Bust-type 8 reales dollars, made from 1772 to 1825, also circulated widely. These are valued at $100 in Very Fine condition. Note that many modern copies of the 8 reales exist. These are produced mostly as souvenirs and have little or no value.

       Money of the Early Americans

      The saga of American money covers a period of nearly four centuries, from 1620 to the present. It began when the early European settlers in New England started trading with Native Americans for furs and commodities that could be exported to Britain. The furs, tobacco, and lumber exports were used to purchase needed items that could not be produced locally. Trade was carried on with the Indians through the use of barter and strings of wampum, which were fashioned from clam shells in the form of beads. Beaver skins, wampum, and, in Virginia, tobacco, soon became the commonly accepted local media of exchange for all other available commodities that were not bartered. The immigrants, in fact, had little use for coined money at first; but when merchandise arrived from Europe, coins were usually demanded in payment for goods.

      Nearly all foreign coins were accepted for purchases. The most popular were French louis, English guineas, German thalers, Dutch ducats, and various Spanish coins, including gold doubloons and, particularly, the Spanish milled dollar, or piece of eight. The piece of eight continued to be a standard money unit throughout the entire colonial period. Even after the Revolutionary War ended (in 1783) and the United States Mint was established (in 1792), the Spanish dollar and its fractional parts circulated in this country with official sanction until 1857. One real equaled 12-1/2 cents and was known as a bit. A quarter of the dollar thus became known as two bits, a term that is still understood to mean 25 cents.

      Because of the shortage of small change, large coins were sometimes cut into smaller

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