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Well rust, cell rot, pits at or near the edge and excessive hone wear. Damaged scales are another thing. There are lots of things to look for depending on skill level and ambition. In the library...

I would have to agree with Utopian, I have 1/4 Norton and that is what I still use and learned with but a full size stone would be much easier. I missed that the first time I read your post. Go with...

I would personally not recommended honing a gold dollar. They can have a number of issues that in my opinion is a waste of stone. I believe you are better off finding a vintage one either one with...