PCGS 35 YEARS ON

While the numismatic community had long hoped for consistency in grading and fought counterfeits since time unknown, PCGS was the first to do at scale what it does – authenticate coins, provide a consensus-derived grade, and encapsulate these numismatic collectibles in tamper-evident holders. The ingenious concept, the brainchild of seven pioneering coin dealers, has since grown into the world's leading third-party coin and banknote grading service. Today, PCGS has graded more than 45 million coins, banknotes, tokens, and medals worth more than a cumulative $40 billion.

When PCGS launched operations on February 3, 1986, it was a watershed moment for the hobby. And yet, it all started with a dream. PCGS evolved from a book project, explains company co-founder Gordon Wrubel. Four ‘weekend warrior' coin dealers would meet in a hotel room two or three times a month after the bourse closed to work on our book. It was envisioned to be the ‘Ultimate Redbook' of U.S. coins and would include prices, transactions (both public and private treaty), rarity ratings, and a condition census. The data was put into a computer and ever-growing reams of paper printouts were compiled and analyzed.

He recalls one of these sessions in 1985 evolving into a discussion of recent developments in the coin market. Several rare coin firms and ‘boiler room' operations were being investigated by government agencies. There were complaints of over grading by investors and collectors. Several of the offending entities were fined, shut down, or both. We were alarmed at these events and feared for the health of the rare coin industry, says Wrubel.

So, we put our book project on hold and sought out ways to remedy the over grading issues. One member of our group came up with a brilliant proposal: if we agree on the grade of a coin, would the marketplace accept it? ‘Of course,' was our answer. Then the proposer went on to say, 'Why don't WE grade the coins?' We were all confident that we could do that. But what the proposer said next threw us for a loop! 'We should seal the tamper-proof plastic holders and give a dual guarantee of grade and authenticity.' It seemed unconventional at the time, Wrubel remarks. But after thinking it over, it would be the only way to ensure our guarantees and keep the grades protected from deterioration. The initial participants pooled their money to launch the service.

PCGS Is Born
The company was launched on the concept that coins would be submitted to PCGS through its Authorized Dealers, who would screen coins and then forward them to the company. Originally there were about 30 PCGS Authorized Dealers, with new ones joining on a nearly daily basis, as Wrubel recounts. I came out [to California] that first week to help set up the company and grade whatever coins were submitted. I was scheduled to stay out for one week and return home to Kansas City… But it was not to be. We were overwhelmed with submissions and I ended up staying out for two solid months! In another two months, I had to move my family to California.

Wrubel says he and the PCGS team were anything but exhausted by the heavy workload early on. We were exhilarated by the marketplace acceptance of our service. Early on, not knowing how many submissions we would receive, we decided to run a special. So, for the month of May, we pre-advertised a $15 submission fee. And the submissions came pouring in. A high percentage of our early submissions were Morgan Dollars, but there was a mix of everything, especially gold coins, because of our guarantees of grade and authenticity, he remembers. The program was such a success that we were over-subscribed. In the next few months, we had many more dealers coming on board. Soon, the graders had more than 150,000 coins waiting for their consensus grades. We called it ‘The Wall.'

PCGS had to quickly expand its team of graders. As director of grading, I called all my contacts whose grading skills I trusted, Wrubel notes. They came from all over the country for a week, two weeks, a month, as much time as they could be away from their family and businesses. At one time, I had 38 graders on staff and opened a satellite grading facility. We rented apartments out here to house the out-of-towners.

Adds Wrubel, We eventually broke through ‘The Wall.'

To read the complete article, see:
PCGS 35 Years On (https://www.pcgs.com/news/pcgs-35-years-on)

	NBS (coinbooks.org) Web