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Is Third Party Grading "actual" or "potential" ?

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I was recently at another curreny forum, and a thread was titled; Grade This Note.... The note is a Fr.1508-G (1928G $2 Red Seal Legal Tender) serial number D93478000A and had a high resolution scan. The only clue that was given is that the note had a EPQ suffix. The author of the thread said he would let everybody know the actual grade the next day. Many members had various opinions. I compared the high resolution image given to dozens of high resolution images from the Heritage Auction Archives. The note being graded has 4 rounded corners, and the upper edge has minor wear. Other than that, the note has good centering, and no visible folds. All of the notes, ( same Friedberg # ) graded by PMG in the Heritage Archives graded in the 60's, and 50's have perfect corners, and sharp edges.......well, it's a day later, and the note was finally shown in the holder. The note is graded 65EPQ. I was stunned. How could a note with 4 rounded corners and a much less than perfect upper edge grade 65PPQ ? One of the other members explained it as follows ;



Basically what i was saying is that PMG looked at the flaws in this note and did not hold it against the grade probably due to the fact that those imperfections can easily go away in the hands of a skilled note doctor.Trouble being if those imperfections (soft corners,plate bed dust) Kill the grade then people wanting a better grade would be more inclined to mess with the note .If the note had a fold or the stain was post production that would be different but in this instance I believe these issues can be removed without anyone being able to detect it .If they beat the grade down someone would be more inclined to cut the note out take an eraser and a razor to the note and resubmit it .Not very profitable in this case but in higher value notes it would be common practice .Think of all the hacks who would destroy notes looking to get a higher grade(on top of what we already see).I currently believe the grading companies are doing a good job catching these doctored notes and rewarding notes for not being messed with .

Years ago some collectors didn't appreciate original embossing so dealers pressed it out ,it was common practice .A note had to be flat and bright to bring a premium.What if the grading companies used that as there criteria today.It would be a disaster.Not every note is going to jump out at you in a grade of 65 .There are 5 higher grades to consider using this 70 point scale .


Maybe this note is worst than I'm seeing it to be, but a removable stain,and soft corner or two should not kill the grade .My original guess was 65 ,64 on the conservative side .I still believe that .


So, with that being said, Is the note being graded on "actual" or "potential" ?


scan of note in question that recieved the 65EPQ



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The note in question was posted on the PCGS site. You can state that here. I am a member of both sites, but I only collect PMG graded notes, as I don't like the grading of PCGS or their holders. Therefore, I am probably not the person to ask.


I will say this, I don't want a grading company grading on potential. That being said, a grading company should not be guessing as to whether or not something is 'original' (i.e. EPQ or PPQ) or not. They should go by the facts (i.e. the note) they have in front of them and nothing else. Do I agree with the grade of this note? I would have graded it a 64, not a GEM, however, I am a newbie and I didn't have the note in my hands. It is very hard to establish the EPQ aspect of the grade without the note in my hand. This is what makes grading currency difficult by a scan alone. To me, I only collect EPQ notes. It is becoming the standard (this is a controversial statement); however, I look for original non-doctored notes; which I believe this note in question is. Therefore, I see where PMG is coming from.


I hope that helps. Thank you for your time.





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a note with "No more than two vertical folds or a single horizontal fold" can grade as a (53)




– check folds

No folds (60, 63, 64)

Single vertical fold or one to two light corner folds (58)

Two folds that has been pressed (55)

No more than two vertical folds or a single horizontal fold (53)

Two heavier folds or a light horizontal and vertical fold (50)

Three light vertical folds (45)

Three folds, one of which may be horizontal (40)

May have four to five light folds (35)

May have several light folds (30)

Numerous folds (20)


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