This may be the most important essay, if you read nothing else. The old rule still applies: BUY THE COIN, the holder can be subjective.
Grading of Cal fractionals started with the advent of the 70 point Sheldon system back in the 1950’s. Independent grading services came into play in the 1960’s. Grading coins became more advanced over the next two decades with several grading services arriving at the forefront including today’s giants PCGS and NGC. These grading services strive to be accurate, but with coins of differing composition, differing wear patterns resulting from compositional differences, relief design, die status, press striking strength, and cultural factors, accurate grading of some coins can become nearly impossible. The goal is reproducibility in grading. Someday, the system will be electronically controlled. Until then, it can be difficult. For now, its not perfect. Human error, indecision and other factors can come into play. Want to be a professional grader? It’s not for everybody.
Grading standard issue coins can be much easier to control than odd issues, like California fractionals. Morgan Dollars, some of the most highly collected coins on the planet, would seem to be the easiest to grade. Yet we have folks who collect coins in MS 65 holders from various grading services for coins that are true MS 60 or MS 61 coins. These are the “goofs” or the “errors”, just like an error coin. Humans aren’t perfect. So mistakes are made. Thank goodness there aren’t that many of them. But the coins that might not be seen every minute of every day by professional coin graders are thus more susceptible to error.
When grading coins, an understanding of specific coin manufacture is necessary. In the case of the half-disme, the strike of the eagle is always weak. A nearly uncirculated coin has the “appearance” of worn breast feathers. Not true- it’s a die or press striking problem. The same issue comes forth for dies that have been reworked. They may have become rusted, or had parts broken or worn off. The die gets reworked, but often scratches in the field are still plainly visible, even on an uncirculated coin. A newcomer to the grading game might mistake these scratches in the die as scratches on the field of the coin and down-grade the piece. These things can and do happen.
Cal Fractional Grading History
Grades of Cal fractional coins have been reported in the Sheldon 70 point system for decades. Placing the coins in third-party grading service holders is a more recent event of the past three decades. Jack Totheroh was a student of Cal Fractional grading. He accumulated four notebooks of published data on these tiny coins, ranging from old catalog entries to pieces graded by professional third-party sources as published in various auction catalogs or grading service population reports. Additionally, he, Bob Leonard and others have compared published photographs of the coins to try to discern and identify specific coins. Along the way, Totheroh has kept the notebook journal of every entry of Cal fractional coin he found, with its pedigree and grade. Totheroh himself disliked holdered coins, removing them from the plastic holders as soon as he received them.
It becomes difficult, if not impossible, to identify coins as “the finest known.” All too often, a coin graded MS 63 in 1950 became MS 65 in 1980, holdered at MS 65 in 1990, reholdered or regraded as MS 67 in 2000 (arguably about the start of the “gradeflation” period), only to be downgraded to MS 62 in 2013. Some fractionals only are known in the new PCGS sales database in circulated condition, yet one shows up in mint state condition in a population report. It is either a new discovery, or a long-known piece that has been upgraded. Gradeflation. Other fractionals are virtually unknown in uncirculated condition on any chart. What’s a collector to do?
Grading standards have changed. They will continue to change, and continue to be a matter of opinion for non-standard issue coins for some time to come. The reason is simple. There simply are not enough of the little buggers (Cal fractionals) to be constantly graded and/or be held for comparative study. Cal fractionals become even more difficult to grade with the understanding that the old, crude coin presses that were used, and the attendant cheaply constructed dies were constantly breaking down. Additionally, the tiny planchets often had problems such as laminations, or even edge breakage due to expansion during striking. All of these things render the making of Cal fractional gold coins much more problematic than regular issue gold coins of the period. Sound strange? Not hardly. Consider the Dahlonega Mint gold coins. The dies were constantly breaking down, including rusting at a rate that caused serious damage, reflected in the poor quality of the coins. These gold coins were made on planchets many times thicker than the fractionals. So if you envision the damage done to Dahlonega gold coins, think about those little thin planchet Cal fractionals. They are a mess, many with more die states than we choose to acknowledge. Another great example is the die state problem seen on US Assay Office $10 coins, specifically those found on the SSCA. Some of these coins are so different in appearance that it seems you can see the breakdown of the dies (particularly the reverse) from coin to coin. As Bob Leonard noted so appropriately in the catalog (see BG 102), these “imperfect pieces are a testament to conditions prevailing in 1850s California.”
In the Totheroh Collection, there are coins purchased from nearly every major collection, including the Jay Roe Collection. The grading of the coins in most cases reflects a new system in some cases significantly below the historical grading system. Further issues are present, as some coins that are clearly bent are holdered and graded. In the past, these coins were given an “apparent” grade. This only adds to the confusion. It is possible for us to construct a chart of specific coins, showing the owner, grade and year of attributed grading. This offers no solution, only more confusion and consternation.
One of Totheroh’s collecting buddies, Steve Graham, recently told me “Stating that Totheroh, like many other collectors, disliked having his Cal fractionals in slabs would be a gross understatement. Once (grading service) Cal slabbing came onto the scene, whenever Jack acquired a slabbed Cal for his own collection, he would crack it out in order to be better able to examine it up close and personal without the plastic slab getting in his way.” … “I believe most all Cal collectors would agree that cracking out any Cal is risky stuff. Aside from possible damage to the tiny buggers, cracking out Cals, especially, is risky because third party grading of Cals has never been very consistent or cut and dried as it has been for authorized United States Mint coinage.” … “In my opinion Jack was a ‘pure Cal collector’ in every sense of the word. He was interested in Period 1 Cals for all the right reasons. He was intrigued by the ‘why’s and how’s’ basic to their numismatic importance and their significance in California’s Gold Rush history, and not only because of their designs, their coiners, their production processes or populations etc.”
Totheroh was so concerned about what he felt were a lack of grading standards that he saved an excellent interview of Walter Breen published in “Legacy” from September, 1988. An abridgement follows:
“LEGACY: What is the problem with numerical grading? BREEN:…numerical grading was originally an invention of Dr. Sheldon based on a fancied relationship between price and grade in 1794 Large Cents … (It was) experimentally extended … to other series. Others following him have extended it to series where grading had never been standardized. As a result, the numbers have only a vague meaning. I don’t think that there is any one human being who could accurately and without fail distinguish Mint State-61 from 62 in such a way that other people would recognize the difference uniformly. I don’t think it can be done. Furthermore, the numbers, since they originally had to do with prices, no longer have that rationale. A 60 coin is not worth twice what a 30 coin is worth. That’s the way it was in Sheldon’s day. … I will not use numerical grades for anything. I do not believe in them anymore. I think they have lost whatever purpose they originally had. … Sooner or later, something new, something better has got to be found. At that point, numerical grades will be … obsolete.” While Breen was right on the money, he, and others like him, lost the battle.
2013 Tightened Grading Standards
Many US coins have undergone a period recently of tightened grading standards. It had to happen. Too many coins were being continually broken out and resubmitted, getting higher grades each time. But it’s the same coin! The “gradeflation” period of the last decade appears to be over. Grading services are clearly trying to get a handle on true grading, and appear to be working toward better standards.
“Tightened” grading today is a good way to discuss “down grading.” This has never been more apparent than with the Totheroh coins listed here in this catalog. Every coin was removed from its original holder, as discussed above, allowing Jack the opportunity to study them in detail over the years. His coins were exceptionally well cared for, with no mistreatment whatsoever. It was an absolute requirement to carefully remove them from holders for advanced study. The end result is a huge accomplishment, a victory for every collector. His detailed study allowed for the transformation of the original Breen-Gillio book into the second edition. This transformation was made possible by all of the additions and extra data provided by Totheroh, Leonard and many other collectors and experts. The new work is a monument to the Cal Fractional series. But it would have been impossible if the coins were in holders. Weight, size, minor and major die variations and much more could not be studied in proper detail when the coin is housed behind a plastic wall.
Gradeflation, the process of cracking or breaking out a holdered coin from its plastic holder and resubmitting it for upgrade, became routine over the past decade. Adding to the difficulty are “coin doctors” who improve the surface or appearance of the coin. Coins can be “curated” and thus cleaned of unwanted dirt or stain. Others may have artificial stain or color added, or embellished in some other way. Today, it is commonly thought that few high grade US coins are truly unaltered. But Totheroh’s fractionals weren’t part of this group, with the few exceptions of pieces that were tooled as jewelry pieces, and perhaps a few recent purchases. Many collectors we talk to think the grading process is political (I hope not!). Grading classes are offered regularly at major coin shows and at the annual American Numismatic Association summer seminar. All of this helps illustrate that grading is an opinion, and subject to the knowledge of the person doing the grading.
Tightened grading of Cal fractionals will cause consternation by many. In the Totheroh Collection alone, previously certified pieces in the MS64 to MS65 range have been routinely downgraded into MS 62. This can have a major effect, particularly when it was published in articles over the years that Totheroh coins were among “the finest known.” Now, if one looks at the new grade, and compares it to those shown on the population reports, it is no longer a “finest known” piece. But what you don’t know is that the piece shown as the finest in the population report was broken out of its holder for study, and has now been downgraded. A specific list of Totheroh coins in this category certainly must include: BG 101, 110, 204, 208, 301, 311, 505, possibly among others.
Be Proactive in Grading
The best recourse or defense against under or over graded coins is a good offense. Blow up the photos of the coins, or use microscopy and compare them to your own experience of grading mint state pieces. Better yet, compare them side by side with coins you accept as a certain grade. Make your choices in this manner, and you’ll soon understand why some identical date/mint coins graded MS 65 by the same grading service can sell for multiples more or less than the same coin with the same grade. Other people have the same opinion- that the coin was over or under graded, and that sways their bid at auction. Thus it is argued that two of the same coins graded MS 65 by the same service, selling in the same auction may get $1500 and the other $2500. The buyers looked at the coins and decided that one piece was significantly better than the other, regardless of what was printed on the label.
What Constitutes a Finest Known?
Many Collectors today want only the finest coins. Modern grading difficulties and problems can, and do, interfere with an understanding of just what is printed on the grading service holder, as discussed above. The Bergen/Istvan and Totheroh collections have an aggregate 256 coins which clearly show these issues.
For the purposes of this catalog, we found it necessary to use the records of only one grading service. That way we were comparing “apples and apples.” When Bob leonard did the coin cataloging, he had it even better – he had the coins and could compare these directly to images of sold coins posted online. This also helped in understanding pedigree.
For this catalog, the term “finest known” is an opinion (just as are the grades themselves), based on the grading service records in conjunction with sales records. Often there is a sales record of a stated “finer” coin that does not appear in the grading service records. Other coins appear to possibly have a grade one point higher from a competing service, and some of these are obvious “crossovers.” In many cases there are more than one coin of the same grade, so they are all the “finest.” Thus it should be considered opinion on exactly what constitutes “finest”, and when we offer the phrase “finest known”, it may mean tied with other coins, or what we expect would be a tie involving crossover.