The Great Currency Grading Debate - Round 1

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However, extending the scale to include: superb, ultra, superior, and premium, sounds like flashy ways to describe less than perfect.

If you think about it, our current system already does that.  

What if you were a restaurant critic for a major newspaper, and reviewed a restaurant.  The service was fairly bad, the restaurant was not clean, the food was edible but nothing special.  It wasn't a disgusting restaurant, but it wasn't much better than a McDonald's.  Using paper money terms to describe this restaurant, it would be "very good."   The current language already elevates a note's condition far beyond the meaning of those words under any other usage.  It doesn't really make a lot of sense, does it?

I believe that the grading system in use should be intended to conform to the note(s) in question, not the other way around.  So if an EF note sells for $500, and a VF for $250, then there are certainly notes that fit in the intermediary that would sell for maybe $350.  Under the current system, if a note is anything less then EF then it is a VF at best, and the value is halved.

Having seven degrees of UNC might be a little overboard but I certainly think that we could be open to having intermediate grades more standardized.  

My 2¢.

This I agree with.
The mid-grades prior to UNC would be nice

If we stand by the definition of UNC as being a "perfect" note, isn't it the AU grade that needs to be subdivided? The VAST majority of notes collected, in all fairness, are probably AU in that they have some kind of flaw, however minor. Maybe we could have Choice, Gem and Superior AU  notes. And then still have at the very top, the (nearly) unatainable UNC or UNC-70 or whatever.. In my experience, just about every single note I ever buy as "UNC" I will examine under a microscope if necessary to find some kind of a flaw and then catalogue it away as AU with a comment on exactly the severity of the defect.

I understand where everyone is coming from.   I understand the angst, the cynicism, the skepticism, and the worry over what is going to happen in terms of how are collections, future buys, and future trades/sales will be graded.

Who wants confusion in grading?

No one -- I believe -- wants that.

But every seasoned collector I've talked to tells me the same thing: Grading is everything.
  
And as Bob says:

We can use adjectives like choice and gem and avoid the use of numbers, if we collectively deem that best.  Grade inflation is not inevitable either.  If nothing gets decided, the opportunity may be lost

We can use the words but will that help us reach a fair consensus?  Does this help the collector?  I don't think the way I see adjectives being thrown around today (esp online) to describe our notes is very accurate.  

AND: If nothing is decided then we're either a) missing a great opportunity to settle the issue or b) dragging our heels and detering new collectors from entering the hobby because they know its murky waters ahead when it comes to getting a fair deal with everyone agreeing on what condition their note is in.

The VAST majority of notes collected, in all fairness, are probably AU in that they have some kind of flaw, however minor. Maybe we could have Choice, Gem and Superior AU  notes. And then still have at the very top, the (nearly) unatainable UNC or UNC-70 or whatever..

 -- yes the vast majority of the high end notes

I completely agree with this statement (ESPECIALLY in terms of those replacements and more collectable notes) as I've seen every degree of AU to UNC.  If I'm going to sink S XXX.00 into a note I sure as heck want to be sure its XXX grade and not to be contested later on.

believe that the grading system in use should be intended to conform to the note(s) in question, not the other way around.  So if an EF note sells for $500, and a VF for $250, then there are certainly notes that fit in the intermediary that would sell for maybe $350.  Under the current system, if a note is anything less then EF then it is a VF at best, and the value is halved.

Yes grading should be all about the notes-- and since notes do fall in between so many of our lower grades -- the number scale would be an enlightenment... NOT a burden, NOT a cost to the collector, nor an encumberance/detriment to the hobby.

A huge majority of notes are in the EF to F range.  Does VF + mean $300 or $350 (for the example above)?  How does a + beat a number?   At one time everyone agree that an UNC note was a note that didn't reach circulation.  Well folks -- that's no longer the case.  Isn't that why the AU to UNC get so much attention?  Isn't that why this whole debate rages on?

We need to get it right RIGHT ACROSS THE BOARD on ALL GRADING

If we bury our heads in the sand over the system that's being used in the US and elsewhere, then we do it at our own peril.

BWJM pointed out to me that there is a very subtle difference in the definition of Uncirculated as published in the Grade Descriptions section of the new 19th edition of the catalogue.  

The new definition (19th edition) is:

UNCIRCULATED - UNC: Crisp and clean as issued and without any folds, creases, blemishes or discolouration. Colours have original hue and brightness. Some issues may have ripples (as made). Mention must be made if the design is not perfectly centered with usual width of margins. Premiums may be applied to the more desireable exceptionally centred and strongly embossed notes. Uncirculated notes of the Canadian Journey issue with the added security features may be expected to show a small indentation where the holograph strip meets the edge of the note. The indentations are believed to result from resistance during cutting into single notes.

This replaces the definition which appreared in the 18th edition:

UNCIRCULATED - UNC: [highlight]A perfect note.[/highlight] Crisp and clean as issued and without any folds, creases, blemishes or discolouration. Colours have original hue and brightness. Some issues may have ripples (as made). Mention must be made if the design is not perfectly centered with usual width of margins. Premiums may be applied to the more desireable exceptionally centred and strongly embossed notes. Uncirculated notes of the Canadian Journey issue with the added security features may be expected to show a small indentation where the holograph strip meets the edge of the note. The indentations are believed to result from resistance during cutting into single notes.

The exclusion of [highlight]"A perfect note"[/highlight] from the definition seems very significant.  Discussion?

BWJM pointed out to me ...

I do not take credit for this observation. At the CPMS executive meeting, Bob Graham mentioned to the group as I was opening the new Charlton guide that Gary Fedora's whining and complaining about those three words might have had more of an impact than he thought. I flipped to the grading definitions, saw the change and pointed it out to Gary. It had quite a silencing effect. It was beautiful.

Due to the new definition I think that there needs to be at least one grade higher then UNC, either GemUNC or Choice UNC. This would describe an originally Uncirculated note with absolutely NO flaws. Mind you a GemUnc note would be very difficult to find with all the recent ripples, corner bends and cutting cups.

I agree with Oli1001.  If there is UNC (even if it has cutting cups or a ripple), then there is the possibility that there COULD be a note that does exceed that in terms of perfection.  Thus bring in GEM or CHOICE (but not both), or use them both, but let them mean the exact same thing.

Related stuff:
An important thing that divides people on UNC:
1.  some people use UNC as a past/present tense verb.  As in: this note has been circulated, or this note has not been circulated.
2.  However, some people use UNC as an adjective to the note.  This note is an UNC note. This note is not an UNC note - of course both describing the actual note condition.

However, under #1, (UNC as a verb, as it is much more used for in coins from what I have seen) I could get a new note from a brick, and then fold it in my wallet, take it out again, and say, "no, this note has not been in circualtion, therefore it is UNC" (the verb) - the note actually never circulated through our system.   A second point: a bent note from a brick is also UNC if you consider UNC as a verb.  In coins, an UNC notation can have a numerical grade of even something like AU-50 (yes this is possible) because they can come right from the mint this way.  

This is why mixing the meanings for UNC can cause confusion.  
From what I have seen and learned, UNC for notes is the adjective.
Clear as mud? great.

Without the numbers how would you differentiate a Superb Gem Uncirculated from a Superior Gem Uncirculated?  Why don't we make UNC70 "Super Duper Gem Uncirculated" and UNC71 "Perfect Uncirculated" (or should that be Perfect Gem Uncirculated?)

I agree with previous comments that there should be no more than 2 types of UNC where "UNC" would be a perfect note that may have some flaws as issued, and a Gem UNC that would have no flaws, even if such flaws are common for a particular series like cup marks on Journey notes.  However a Gem note, in my opinion, would also have to be superbly centred and embossed.

I also agree that if any grade(s) need to be sub-divided further it would be the AU and maybe even the EF grades, since the most dramatic price jumps are from EF to AU to UNC.  As has been pointed out before, the CPMS grading standard DOES allow for intermediate grades between the full grades of F, VF, etc. without the necessity of numbers being used.

In the case of Charlton's all they would have to do is expand the tables so that there is EF-, EF, EF+, AU- etc. so that (for buyers) the prices would climb more gently as the grades increase and (for sellers) the prices would drop less dramatically as the grades decrease.  Having 7 types of UNC only serves to confuse buyers while helping sellers to pump up prices beyond what they should be for a perfect note.  Adding further gradations within the current CPMS grading scheme should fairly serve both buyers and sellers.

Obviously the trickier part would be to define the criteria for meeting an in-between grade.  The CPMS scheme does not do this (yet), but the numeric system has not done a great job of this either - I've seen UNC63 defined simply as "a stronger rendering of UNC62".  Um, yeah, I figured that much...

Hudson has raised an important point, I suspect.  The word "uncirculated" might be interpreted to signify (i) the past history of the note i.e. was it released for circulation or not?
or
(ii) the present state of the note i.e. does it have handling marks or not?
I submit that only meaning (ii) - the state of the note - has any significance in terms of grading.
As we move (at least, I hope we will move) to devise the necessary grading standards, it would be well to keep this distinction in mind.  As Hudson rightly states, it is the source of confusion, as well as heated debate.

We need to start with something. Comments please.

UNC 65 (or GEM) : An exceptional note. Similar to an UNC63 (or choice UNC) but must also be nicely centered and exhibit strong embossing.

UNC 63 (choice UNC): Crisp and clean as made and without any folds, creases, blemishes or discolouration, colours have original hue and brightness. Some issues may have ripples in the paper created during manufacture.

UNC 60 (typical UNC): Crisp and clean as issued. Allowance can be made for a single pinch/wrinkle or a cutting crescent at top or bottom of the metal strip or a light counting fold (earlier issues only).

      

The three levels of UNC make sense to me.   Its simple and easy to remember.

Would not three levels suffice?

& Could we use increments of 5: eg: GEM 70 / Choice 65 / Typical UNC 60 ?  I guess it really doesn't matter, but with a scale of 5 it allows for tinkering in the future: say if something between GEM and Choice hits a 67...

Now I'd like to see something similar (and lets not get too fancy!) for the other grades AU, EF, VF, F, Vg and G with numbers that decrease in logical levels. Any ideas?

Let's drop the numbers entirely. Just use UNC, C.UNC and G.UNC. Numbers allow for people to say that a note is 64 instead of 63, and therefore it is clearly worth more. Definitely do not go to 70, because as Gary so vehemently believes, there is no such thing as a perfect note. There is something wrong with every note. (I just try to minimize such flaws).

Let's drop the numbers entirely. Just use UNC, C.UNC and G.UNC. Numbers allow for people to say that a note is 64 instead of 63, and therefore it is clearly worth more.

Fair enough to say that, inevitably I believe this proposal would result in UNC+ , C.UNC+ and G.UNC .

Just an observation.

Let's drop the numbers entirely. Just use UNC, C.UNC and G.UNC. Numbers allow for people to say that a note is 64 instead of 63, and therefore it is clearly worth more.

Fair enough to say that, inevitably I believe this proposal would result in UNC+ , C.UNC+ and G.UNC .

Just an observation.

Granted, but at least without the numerical grading scale, you can win an argument with saying that there are no intermediate grades.

If you are dealing with UNC 60, 63, 65, 70 and you try the same argument, anyone who passed grade 1 math will laugh at you when you say there are no grades between 60, 63, 65 and 70.

(OK, maybe grade 2 or 3 math... I don't think kids can count that high in grade 1 yet.)

I agree with Sudzee, three grades would due. Any more grades of Unc would be too much. Either way 2 or 3 grades of Unc would be ideal. Bringing numbers into the equation would just make grading notes as difficult as coins, and let's face it no one likes coins