[Jim McDougall]

You are indeed a conversation starter Chevalier! and this is a very well placed question, especially using the description mystique, which is also well applied.
The Toledo mystique is owed largely to literature, although the true quality of the blades forged there certainly earned thier reputation from early times. It must be remembered that Toledo had key importance in swordmaking which stemmed from the time of the Romans when there who quickly adopted the Spanish sword, then came the Visigoths followed by the Islamic conquest which for a time suppressed swordmaking, but revived and fluorished under the Caliphate of Abd-er-Rahman III (912-961 reigned) with guilds and emphasis on high quality. This was enhanced by the influx of Syrian smiths from Damascus, who deeply enhanced the legendary quality of Toledo blades. The 'jinete' sword (Ar. zeneta, warriors) developed in the 13th century, by the 15th century in high fashion and manufactured largely in Toledo.

Clearly the reputation of these fabled Toledo swords entered the realm of literature,this was the LaMancha of Cervantes, and even the famed El Greco proudly owned a jinete sword. Shakespeare specifically cites the supreme Toledo sword in the one carried by Othello. In other tales of heroic national figures, the Toledo blade represented the stature required of power and quality. In reading the historic lore of Eastern Europe, Vlad (the impaler) of well known folklore himself was awarded a Toledo blade in his historic exploits in defense of his homeland.

By 1561, the royal court moved from Toledo to Madrid, and Toledo's importance began to slip away. By this time there was distinct competition as well in other cities in Spain, but especially in Passau and Solingen, whose equally legendary status in sword blades may best be attributed to brilliant marketing and volume manufacturing.

By the 1660's the Toledo swordmaking center was in ruins, and economic disaster took its toll. In the 18th century, King Carlos III tried to reinstate Toledo's swordmaking industry, and by 1780 a Royal Manufactory was founded in Toledo's outskirts. By this time however, the huge center of Solingen had established control over swordblade making and exports worldwide.
In much research we have done here it has been shown that the well known Spanish blades with the 'Spanish Motto" found primarily in Spanish colonial swords, though occur elsewhere as well, were actually Solingen made and shipped via Spanish shipments. In the Scottish basket hilt blades, which we know are from Solingen , many carry spurious Spanish makers names.

To answer this question specifically, the Toledo blades were in fact of the highest quality in the periods described, but eventually were superceded. The legendary status that they had is reflected in the later blades produced by Solingen which often carried spurious markings and inscriptions used by famed Spanish makers.
The Toledo manufacture in modern times of military swords in the 19th century I would think are of parallel quality to modern production of ceremonial swords from Wilkinson, and Solingen. In present times of course, the tourist trade for decorative weapons remains in Toledo, but Solingen only produces cutlery etc. and Wilkinson is I believe all but out of business unfortunately.

Although reality reduces all of this to strictly business, I think the romantic in all of us prefers to leave the glory of the magnificent blades of Toledo in thier place in history, proud and untarnished and having nothing to do with the modern decorations.

As for the quality of the Solingen blades, and the Wilkinsons of the mid 19th c. into the 20th, you would have to handle these to feel the solid steel and balance of these remarkable blades.

(ref: information not directly quoted, but derived from text in "By the Sword", Richard Cohen, 2003, pp.114-116).