Current State of US 3rd Party Grading

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As someone who has collected Canadian banknotes for almost 50 years I have become totally disillusioned with US 3rd Party Grading.  The number of Canadian notes being graded by US 3rd Party Graders that are coming back as 67, 68 or 69 has become ridiculous.  And I'm not talking about recent polymer issues but the older series (1937 and forward).

The premiums that people are charging for these "supposed" Superb Gem Unc notes is off the charts.  I recently sent a large number of my notes to BCS to be graded and was lucky to get a few GUnc 65s.  I consider myself an expert banknote grader and BCS was for the most part accurate on their grades based on Canadian grading standards.  If I had sent these notes (many of them 1954s) to Legacy I am sure I would have received many 67 grades and possibly higher.

I personally buy a note based on the visible grade not the slab grade.  But this is becoming more and more difficult when so many notes are being over graded by the US 3rd party grading companies.  I don't blame collectors who are sending their notes to Legacy for grading especially if you plan to sell them in the future.  Maximize your return.

Then there are those notes that miraculously improve in grade with time like a fine French wine.  It is more common than you might think. 

I keep detailed registries for many note types where formal public registries don't exist.  For example I keep a 1954 solid radar registry that has been tracking almost all 1954 solid notes seen in public since the 1990s.  I have images of most of these notes as well.  The same holds true for the 1954 10 million numbered notes.  Which brings me to my next grading enigma.

A 1954 $5 Beattie-Coyne Modified note with the serial number V/C 10000000 was for sale in today's Stacks Bowers auction in the US.  It was graded by the "new" PCGS graders as a CUnc 63.  I immediately recognized this same note as one that appeared in the TCNC May 2023 The Extravaganza Sale as a Legacy AU 58 PPQ.  I have attached images of both of these graded notes.  I can personally hypothesize as to what happened to this note but I will leave that to your imagination.

As collectors it is more important than ever to do your own due diligence when buying a banknote for your collection especially with the premium over book being charged on high grade notes.

End of rant.

 

Incredible!  Good eye as well Canada-banknotes.

The 10 million note has been repaired from the original graded note - top left corner. 

I guess the grade UNC63 didn’t come with PPQ or EPQ, as these three letters were left out on the grade.  Which means the note was altered based on their grading.

I do agree the grading from the modern US third parties have been over grading big time.

While I agree with most of what canada-banknotes has said, this particular example actually seems fairly accurately graded and consistant with what I would expect (both the before and after).

As coinsplus indicated, the note was "repaired" if you can call it that.  If it had gone from 58PPQ to 66PPQ then I would have an issue with it, but 63 (without the PPQ) has always been synonymous with "pressed AU" and the note is exactly that.  In any case, 63 is almost always a worse grade than 58 PPQ or EPQ.

Also, this is a 10M note which is expected to have flaws.  The 10M collector knows and accepts this and isn't really going to get bothered over a 58 vs 63.  The main issue was that the note was overpriced, not that it was overgraded.  In fact, I would happily buy it if it was priced a little more realistically, whether it was in a BCS 50 or an LCG 58 PPQ or a PCGSBN 63.

I don't think any of the US grading companies make any pretense of following the Charlton's grading standards.  Looking at PMG's grading standards (https://www.pmgnotes.com/paper-money-grading/grading-scale/) and comparing them to the Charlton Catalogues, I would suggest the following equivalence:

68-70 = GEM
66-67 = CHOICE
64-65 = UNC
58-63 = AU
50-55 = EF

I do sometimes see 66PPQ and 67PPQ with obviously pressed center-folds which is certainly something to complain about but that's not what we see here.  I've seen these more egregious cases mostly in LCG or old PCGS holders.

On the other hand, I find that PMG has been pretty consistent lately (provided you follow their published grading scale), even more-so, dare-I-say, than BCS.

At the end of the day, buy the note and not the holder.  Value is subjective.  Pay whatever you feel it is worth to you, regardless of what the holder says or what the Charlton says.

I have attached my archive images of the raw note which makes the handling marks on the original note more visible.  It is obvious from these images that the raw note was original and an AU grade.

It is also difficult to determine from the PCGS images the extent to which the note was altered due to the high contrast used in the photographing.
 
Most of the 10 million notes I have seen have handling marks from being the last note in the bundle/brick or from the handling when the 8th digit was manually added by hand.

I should clarify that I was not questioning the PCGS grading of this note but pointing out how often the numeric grade of a note improves over time, most often from "processing" of the note in an effort to increase its value.