Saturday, August 10, 2013


Scripophily is the study of stock certificates, bonds, and related fiduciary instruments. You can pronounce it "scrip-o-filly" or "scrih-pofilly."  It is a subset of numismatics, the art and science that studies the forms and uses of money. Like coins, banknotes, checks (drafts), and tokens, stock certificates are artifacts of commerce, the basic data of enterprise and trade. Old stock certificates reveal the daily life and work of the times. And like other numismatic items, they can be highly artistic.

Paper certificates began to wane in 1971, with the founding of NASDAQ: National Association of Securities Dealers Automated Quotations. (The NASDAQ opened on February 8, 1971, as a computer bulletin board.) Full electronic automation of stock markets in the 1980s made these instruments obsolete. Today, you actually can get Disney, Apple, and other shares, but often the transaction fee is greater than the price of the stock. That makes these items highly valuable as collectibles. For the historian, a mixed lot of 100 average items will cost about $50 from a dealer. The better dealers are members of the American Numismatic Association, American Numismatic Society, or similar organization. 
  • The Professional Scripophily Traders Association - 
  • The Holabird-Kagin Americana -
  • ANA member and Certified Public Accountant Bob Kerstein runs two sites: and
  • The International Bond and Share Society (IBSS) of Ashtead, Surrey, England -
  • Numistoria SARL of Paris, France -
  • Terry Cox, author of Collectible Stocks and Bonds from North American Railroads does not buy or sell certificates himself: he is a researcher and writer -
Vignette from a Reading Railroad Certificate
Some historians point to the Code of Hammurabi as evidence for the earliest recorded sales and purchases of debt. Republican Rome knew “corporations” as legal bodies on the same idea that a city or flock can be an entity independent of its changing members. Starting in 1171, the City of Venice borrowed at 5% in perpetuity by issuing bonds that became valuable in their own right, trading along with textiles and spices. The modern stock exchange is rooted in the commercial revolution of the Dutch Golden Age, in which blossomed both the Dutch East India Company and the Tulip Craze. Though the actual site of the first stock market is not known, a book from 1688, Confusion of Confusions by Joseph Penso dela Vega, presented a dialog that explained the buying and selling of shares, which it claimed had been going on since 1609. Ultimately, the London Stock Exchange was founded in Jonathan’s Coffeehouse in 1698. The New York Stock Exchange was founded in 1792.

Just as American coin collectors look to the works of Longacre and Saint Gaudens, so, too, is the broad mainstream of American scripohily the century from the 1850s to the 1950s. Railroads, steel mills, automobiles, airlines, electrical and electronics firms all date from those times. 
Fine Print on the Back of a Reading Railroad share.
(Not all certificates were explicit. Some referred to rules posted elsewhere.)
Just as the invention of coins about 550 BCE marked a commercial revolution that brought philosophy, geometry, and democracy to the ancient world, so, too, did the creation of joint stock companies announce the application of science to industry, universal franchise, and the end of slavery - and a worldview that encompassed atoms and galaxies.

The artistry of stock certificates is another attraction. Like coins, they often feature neo-classical, Graeco-Roman images of powerful gods and abundant goddesses. Sometimes they take on modern dress, wielding micrometers or reels of magnetic tape, or wearing communications headsets. Like banknotes, these large papers also feature scenes of agriculture and industry. 

International Telephone & Telegraph

On the instruments are the names of famous stock brokers of a bygone era: Bear Stearns, E. F. Hutton, Merrill Lynch, Paine-Weber, and Lehman Brothers. You can find endorsements from financiers such as the Rothschilds and industrialists like the DuPonts. Fans of the Parker Brothers Monopoly game can complete the four railroads: B&O, Pennsylvania, Reading, and Short Line.

The large format of these fiduciary instruments allowed for a full expression of the legal nuances that controlled their sale and ownership. When owned by two or more persons, a stock certificate may declare them to have “rights of survivorship and not tenants in common,” or to be “joint tenants.” Both of those are phrases directly from real estate law. Jurisprudence had not realized the novel and unique nature of financial markets. 
Watkins Johnson Company

Broadly speaking, common stocks are voting shares: one share one vote; 1000 shares, 1000 votes. Preferred stock has no voting rights, but does pay dividends. Bonds represent loans backed by the assets of the corporations. In case of bankruptcy or default, bond holders get first rights at repayment. A bond is always worth its face value – or at least promises to be. Stocks usually have no par value. However, within those broad latitudes, other options are possible. Common stock may or may not have a par value and may or may not promise dividend payments. Preferred stock may have a par value, as well. 
In 1966, the “dual fund” was created and the stock certificates of American Dual Vest are easily available singly or in bulk. This was a mutual fund. The firm created two forms of investment with a single instrument. Buyers could elect to be paid dividends or to forego them for the promise of “capital gains,” i.e., an increase in the market value of the basic instrument. Dual investment was successful, attracting $300 million in 1967. These close-end dual purpose mutual funds still are being created today.
500 Pounds Sterling 1869
Lent to the railroad by
Mrs. Janet Simpson
50 years before
the government
let her vote.

The miracle of collectibles is that the numismatic aftermarkets make treasures out of failed currencies. You can pay more for a nice old note from Brazil than it was ever worth on the street when it was issued. 

Make no mistake: this is all worthless paper. They are cancelled. Like checks, these instruments were issued to individuals, and then endorsed and cancelled when sold. Financial districts housed thousands of clerks who kept track of these papers. Sometimes, warrants were created, promises to deliver actual stock certificates at a later date when the document finally was available for issue.

Careful shopping pays. With computerized trading, millions of these came on the market as stock brokers emptied out their vault rooms. Sometimes, they surface in estate sales. Except for the oldest of these, and certain other rare issues, these items are largely as common as coins. In an online bidding war, you can pay $10 or more for a piece of paper that wholesales for $55 per hundred. Their worth is entirely subjective. 

You might tie it to another hobby. (I gave a certificate from The American Thread Company to a coworker who spins her own yarn.)  You might have an ancestor who worked in a steel mill or on a railroad. You might be a fan of Atlas Shrugged.  Whatever your motive, you should always shop with your head, not your heart.

Experienced numismatists know that books are the engines of value in the hobby. The Antique Stock Certificate Almanac by Fred Fuld, American Automotive Stock Certificates by Lawrence Falater and Stocks and Bonds of North American Railroads by Terry Cox are among the standard references. 

(This was based on an article that appeared in the Spring 2011 issue of the Mich-Matist, the news magazine of the Michigan State Numismatic Society.)

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