"Foreign Substance" on certification holder
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13 posts in this topic

This one was an annoying comment on the back of certified notes with PMG; a major currency dealer at Parsippany told me that another leader in paper money retail sales told the grading company that they were driving dealers out of business by being overly harsh with the "foreign substance" issue resulting in net grades and hard to sell notes. So hopefully they have loosened up on this.

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There are many issues that should make notes of lesser value, but "foreign substance" is pretty trivial. I have put notes with light stains into tap water and have gotten some of the water soluble problems out; consider how coins used to be rejected for so many issues like pvc, residue, etc., and then the grading services discovered advantages to offering a service for removing the problem, though some did it for free. Too bad there are few such options offered with currency, though I hear that PCGS currency offers such an option for some submitters.

 

I had a rare 1882 $20 gold note, brown seal which a buyer was able to improve to turn a $4200 purchase into $18,500 through a conservation worker. Whom did the net/problem grade serve, me or the crafty dealer who was able to upgrade it through PCGS currency for a windfall?

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It sounds like your real beef is not with PMG's foreign substance standards but with the fact that the note was altered after it was out of your possession.

 

Are you suggesting that the TPGs should ignore foreign matter altogether?

 

 

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It sounds like your real beef is not with PMG's foreign substance standards but with the fact that the note was altered after it was out of your possession.

 

Are you suggesting that the TPGs should ignore foreign matter altogether?

 

 

The question is what is the "foreign substance"? How overly judgmental can they get with original notes with minor stuff on them, ultimately incentivizing submitters to soak all notes with any light stains or other stuff on them in water, and letting them dry between the leaves of a book before submitting. Colonial notes have flecks of mica in the better ones, I don't see those coming back as net notes.

 

The sharpies will buy notes from demoralized sellers that are netted as "foreign substance" get it off and then sell the notes at a higher grade. I see it again and again where the sharp insiders make outsized profits by taking advantage of sellers who have otherwise nice material that has been unjustly stigmatized as "problem" when the real problems like "retouched ink", tears, damage, pinholes and so forth get sold raw to buyers who do not do the scathing analysis and tactics that the sharpies do.

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Hmmm, maybe I should take a couple 'foreign substance' notes I have, remove them from the holders, attempt to remove the substance and resubmit--obviously to a different TPG.

No, probably not. Hey, they call it as they see it and what happens if our TRUST in them begins to wane? I'm not in favor of trying a crossover from one to the other either.

Adjusted for inflation here's my:

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And yet I have seen notes like a $50 large size gold note with a tear at Sloat's shop straight graded at PMG with the problem noted in the back.

 

If the note comes back "net" due to foreign substance it is not in the PMG census; personally I would like to see the top currency experts in the US weigh in on the issue. I have heard comments from some of them on various grading issues that do not get aired in public forums.

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@Nutmeg Coin, I'm not sure if you're upset about the notation from the TPG or a buyer that purchases and improves the note for profit.

 

The TPG's are obligated to notate problems, and buyers have been improving notes since forever.

Questioning the foreign substance is immaterial and faulting a professional paper conservatist for doing his job is not fair. Whoever buys a "NET" note with improvement in mind is taking a chance. A chance that they may, or may not be able to profit from.

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I don't have a problem with doctored, damaged, pressed, laundered and other permanent impairments notated leading to net notes. My criticism is narrowly focused on "foreign substance" knocking notes down to the "net" level, akin to coins being called "details" coins due to some residue that can be rinsed or dipped off. If the substance is serious, like glue residue, stains or other more or less permanent substance adhering to the surfaces then I can see the net grade but not with minor residues on the surface of the note; I don't see PCGS currency using the "foreign substance" apparent grade much. But don't expect much elucidation on these boards on these issues, apparently the business managers or lawyers behind the companies advise those in charge not to answer such significant questions. All it would take would be extensive FAQ pages to address this and so many other questions.

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This also underscores one of the significant differences in philosophy between PMG and PCGS. PMG net grades for defects such as graffiti, foreign substances, etc. which means they reduce the overall numerical grade to account for these. PCGS does not lower the numerical grade but notes them as apparent.

 

Here is the hypothetical. The last two notes in a fresh pack. The higher number has a foreign substance and the other doesn't because the higher number is on the outside and picked up glue or whatever from being set down. But the paper for both is otherwise a 66. PMG will grade the one without the substance as 66 EPQ and the other as Net 64 (or whatever their standard determines the downgrade should be) without PPQ. PCGS would grade one 66 PPQ and the other Apparent 66 with no PPQ.

 

Neither of these is wrong and both philosophies have their merits . It is simply the application of each company's standards. PCGS refers to PMG's method as market grading; that is, giving a lower number because the one with the defect should bring less money. But PCGS method has led to some otherwise absurd grades such as a note with one quarter of it missing being graded in the high 60s because they only grade the paper that is there.

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