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ABOUT SCRIPOPHILY

The following information is furnished by the International Bond & Shares Society

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Why collect scripophily?

History

What are Bonds and Shares?

Collecting themes

Where do they come from?

Art and Design

Starting a collection

Autographaphs

Buying

Value

   

Why collect scripophily?

We cannot do better than quote the reasons for collecting given by some of our members.

"I have always been a railroad fan, especially steam locos. 
I collect all kinds of railroadiana, and stocks are among the most pictorial."

"I get a thrill from holding papers that have been handled by great financiers and world figures
such as John D Rockefeller, Thomas Edison, Nathan M Rothschild, Walt Disney,
even Goethe and King Charles I."

"Scripophily is new compared with collectibles like stamps, coins and
banknotes.  This means I can research angles that no-one has looked at before,
and I feel I am becoming a recognised expert in my specialty."

"I adore the artistry and colour of some of the picture-size Belgian, French,
Spanish, Portuguese shares.  Plenty of art nouveau.  Even some Mucha."

"My home town was built on coal.  I am making a collection of coal mine shares
and other industries from my region."

"I love to handle the evidence of the hopes of rebels and romantics from
different times and continents - Gregor MacGregor's Honduran adventure, plans
for airplanes that would never fly, Kossuth's Hungary, the Spanish Carlists
amongst them."

"My Civil War collection would not be complete without at least a
representative group of bonds of the Confederacy."

"As a paper money collector, I like to find banking, railroad and State stocks
and bonds with the same vignettes and names as I have on my notes."

"Scripophily is truly a world interest.  It makes a reason to travel to
meetings and bourses.  And I exchange news by phone, fax and email with
interesting and charming people from all over."

"I enjoy the hunt.  Besides, this is early days for scripophily, so I am not
likely to be caught on the peak of a fashion.  And how else can I buy  a
million dollars of stocks?"

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What are Bonds and Shares?

A bond or a share or stock certificate is a document given to an investor as evidence of ownership of an amount of capital. Usually these documents are on part-printed forms that are signed and sealed at the time of issue to the investor, personal details being entered in manuscript or overprint at the same time. They are usually signed by directors of the issuing body and sometimes by the investors.

Shares are issued by businesses and form part of the permanent capital of the business. Usually, shares are not repayable, and the investor can recover his money only by selling to another investor. Shares are of many types, originally giving different rights to the holders, and now providing varieties for scripophilists to collect. The most usual are Ordinary (or Common), Preferred and Deferred.  Most shares earn dividends at the business's discretion, depending on how well it has traded.

Bonds represent a loan to a business or to a government or other public body, or sometimes an individual. They are usually repayable within a stated period. Bonds earn interest, usually at a fixed annual rate, which must generally be paid by the company or other body, regardless of its financial results. Bonds may be unsecured, or secured on the borrower's assets (Debentures or Mortgage Loans) and may be payable in gold coins ('Gold Bonds') or as an amount related to the price of a basket of commodities ('Inflation Bonds')

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Where do Bonds and Shares come from?

The vast majority of bonds and shares collected by scripophilists are in one sense or another 'defunct'. There are various ways in which they become available to collectors.

rombul1a.gif (164 bytes)Governments in many parts of the world have reneged on their bond obligations, usually due to a change in government after a revolution, or because they lost a war.

rombul1a.gif (164 bytes)Companies go into liquidation, their outstanding bonds and share certificates often becoming worthless.

rombul1a.gif (164 bytes)Certificates may be redeemed (repaid), or, on a merger, replaced by the certificates of a different company. The certificates are called in by the company, cancelled, and disposed of as scrap, either at once or after a period of storage.

rombul1a.gif (164 bytes)In many cases, certificates become valueless when the underlying stock is transferred to a new owner, or following a re-organisation. They are sometimes returned to the company for cancellation and disposal,
or may be retained by the holders.

rombul1a.gif (164 bytes)Some certificates came to light after having been lost and replaced by duplicates.

rombul1a.gif (164 bytes)Many certificates remain unissued through lack of demand and are eventually disposed of.

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Buying

The I.B.S.S. Directory includes the addresses of more than 100 dealers and auctioneers.

When buying, compare prices from dealer to dealer - they can sometimes differ quite considerably. Many dealers issue regular lists. Let the dealers know your interests; they can often find what you are looking for. However, do not expect them to produce what you want off the shelf; the variety is enormous and very many pieces are available in small numbers only. Indeed, many pieces are so rare that no dealer has any in stock.

There are a number of auction houses in the United States and Europe which hold scripophily sales 2 to 4 times a year, and usually send out their catalogues well in advance, allowing plenty of time for postal bidding. Many, but not all, charge a small fee for their catalogue. In almost all cases a premium (often 15% plus taxes) is payable by the buyer on the 'hammer price' of the lot; this can vary considerably from auction-house to auction-house, and must be borne in mind when deciding how much to spend.

Many collectors like to buy at bourses. The word bourse, normally meaning a stock exchange, is used in scripophily to mean a fair or show, where many dealers (and collectors) come together to offer their material. Bourses are often arranged to accompany auctions. They are an excellent opportunity, not just to buy certificates, but also to meet dealers and collectors, to see a wide range of material, and to compare stocks and prices.

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History

The first shares (and trading in them) go back to 2000 BC, but trading in the sense we know it dates from around 1000 AD, in the Italian port of Amalfi, where maritime ventures were divided into shares, which could be bought and sold. This form of maritime share continued until the 19th century, and was the basis for the initial finance of companies such as the East India Companies. Bonds were first issued in Italy; those of the City of Florence were certainly traded before 1328. The earliest companies did not issue ownership certificates, but entered holdings in a register, just issuing a receipt for the money, and often a certificate of entry in the stock register. The 16th century saw bonds from England, France, Holland and Germany, and the first exchanges for organised trading. The first such exchange was in Antwerp, and others soon followed in Amsterdam and other major cities in Europe.

The earliest 'joint stock company' is believed to be a Swedish mining company formed in the 14th century, but few others appeared before 1600. About that time, the first of the great trading companies were founded in Holland, England and France. The earliest collectible bonds and shares, mainly from England, France, Holland and Italy, date from the late 17th century. More collectible material exists from the 18th century, almost all of it from these four countries and Spain, Portugal, Belgium and the U.S.A..

The period 1800-1940 is the source of the great majority of the pieces we can collect. Fine certificates illustrate graphically the development of railroads, oil, aviation and the automotive industry in the United States, banking, insurance, shipping, canals and railways in Europe, metal mining in the Americas and the British and French Empires, and consumer businesses such as brewing, sugar production, tobacco and textiles. The investments of great financiers and 'robber barons' can be traced through the stock certificates they owned.

The occasional modern share is also sought by collectors, if of particular interesting design or a well known company name. Printed shares today are gradually being discontinued in line with modern electronic trading practice.

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Starting a collection

The best overall advice to a new collector is - be patient! Do not rush into buying a large quantity without some idea of what sort of collection you want to build. Otherwise you may find yourself holding an accumulation of miscellaneous certificates, rather like a child's stamp collection, with bits and pieces of everything. This will not give a lot of pleasure or satisfaction, nor will it prove a good investment.

It is vital to learn about the subject, get in touch with dealers, join a society, read books and magazines, talk to other collectors, look at old auction catalogues, buy just a few pieces. The forthcoming I.B.S.S. Bibliography of Scripophily lists more than 80 scripophily books. Then, with your preferences well defined, you can start building a collection tailor-made to your interests and budget. Collectors will be happy to discuss this with you. So will a good dealer; while he would doubtless like you to be a customer, he will be willing to take a long term view.

Most new collectors soon see the wisdom of choosing a theme to collect. The range of the themes is almost endless, since bonds and shares reflect almost every aspect of economic history.

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Collecting themes

Many collectors favour themes such as railways, autos or mining. These offer a very wide range of material, and some further specialisation is needed. In the case of railways, collectors often choose their own country or region. Autos are often collected by country or date. Mining collectors choose either their country/region or a type of mining - gold, diamonds, coal, etc. The smaller fields - oil, tobacco, tramways, textiles, engineering, electricity, water, coffee & tea, and a hundred others - are small enough for a collector to build a world-wide collection.

Popular specific themes include pre-1800 (fascinating but expensive, and only partly catalogued), and Confederates (bonds issued by the Confederate States in the American Civil War - mostly inexpensive, and well catalogued). Some collectors collect only shares, excluding bonds completely. Others collect only the bonds of   national/state/city Governments, especially those of Imperial China or Tsarist Russia. Some buy
only an art style, such as Art Nouveau or Art Deco, or the work of a well known printer, such as Waterlow of London or the American Bank Note Company. Some collectors want autographs of famous people on certificates - often found on U.S. shares and sometimes on European pieces also, and including businessmen such as Wells and Fargo, Vanderbilt, Rockefeller, J.P.Morgan and the Rothschilds as well as those famous in other fields such as Empress Maria Theresa and Johanne von Goethe.

Certificates of many popular themes are illustrated in our Gallery.

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Art and Design

The earliest bonds and shares were handwritten documents, of totally plain design, relying on signatures and seals to deter forgers. However, it did not take long for printed decoration to appear, usually in the simple form of a coat-of-arms. By the middle of the 18th century extremely decorative shares were appearing, primarily from Spain, and today the design and the quality of the engraving on these shares ensures a steady demand from collectors.

Early U.S. stocks and bonds were plain; the earliest known decorated American share dates from 1792, showing a horse-drawn wagon. Mining shares often show mines and scenes of miners at work, but
often these are standard printers' blocks used by many companies, these were standard scenes used by many mines, rather then views of that companies own mine; the same often applied to oil and plantation companies - one rubber plantation looks much like the next! Railway companies showed maps of their route network. The shares of new companies might show optimistic views of the company's future assets, which probably never came into existence!

The use of colour and imagination in the 19th century, varied greatly between countries. The most exuberant pieces were from continental Europe, where prominent artists were invited to produce work of real artistic merit, with striking images and strong colours. The U.K. was far more restrained, with little interest in illustrations on certificates, or in using more than a single colour. The U.S.A. produced many very decorative bonds and shares, often superbly engraved. The range of fine engraved vignettes, especially of trains, but also of shipping, streetcars, autos, industrial scenes, and much else, has led some collectors to concentrate just on those vignettes.

Some collectors specialise in an art style - popular styles include the soft, flowery and very decorative Art Nouveau (or Jugendstil) of the period around 1900, and the hard, striking, striking Art Deco of the 1920s.  Well-known designers (e.g. Mucha or Catenacci) are followed by some.

An experienced scripophilist can make a fairly accurate guess as to the date of a bond or share from the design, although the evolution was mostly slow and steady. The design often helps - A primitive locomotive of steamship suggests an early date. European shares of the mid-19th century used very small illustrations, often set in a border of classical or rococo themes - rosettes, urns, cherubs, etc. There are many such pointers.

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Autographs

A signature of a famous person on a certificate greatly enhances its interest. Indeed, there are many collectors who collect nothing other than pieces with important autographs on them, and dealers and auction houses cater specifically for this interest. A signature on the face of the certificate is usually that of an officer of the company. Trustees often signed on the back of a bond, especially American company bonds. A signature on the back of a share will normally be that of the holder of the certificate, authorising a transfer to a buyer.The most important field for autographs is American material, where pieces with the signatures of financiers such as Commodore Vanderbilt, John D.Rockefeller, J.J.Astor, Robert Morris, J.P.Morgan, or Wells and Fargo of stage-coach fame, and the great pioneers of the railroad age, are much sought after.
There are also European and other pieces with very desirable signatures on them, such as the Rothschilds and various Kings and Emperors.

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Value

Prices of defunct certificates vary from a few cents to tens of thousands of dollars. Many of the most interesting pieces are in the range $50-$500.

How does a collector know what is a fair price for a certificate? As with everything else, prices are determined by the supply and demand. So what influences supply and demand?

DECORATIVE QUALITY
HISTORICAL IMPORTANCE
AUTOGRAPHS
AGE
ISSUED OR UNISSUED
CONDITION
RARITY

DECORATIVE QUALITY
Over the last few years the premium on very decorative pieces has risen sharply, particularly in Europe. Many people wish to frame pieces and will seek out attractive material. To the average collector, too, a piece with a good vignette (illustration) will be preferable to one without a vignette. It vastly adds interest to a railway share to have a picture of one of the company's locomotives on the certificate.

HISTORICAL IMPORTANCE
Many certificates were issued to finance events of historical importance, or by companies of great significance in their field. Examples of such bonds include those issued by the Confederate States of America, to finance their side of the American Civil War. The 18th century certificates issued by the English South Sea Company, the great East India companies and the Spanish colonial trading companies are much sought after. The very early railroad companies and the first manufacturers of cars and aircraft are generally valuable.

AUTOGRAPHS
An original signature of a famous person on a certificate greatly enhances its value but note that some signatures are printed in facsimile, and others may be signed by clerks on behalf of their employers.

AGE
'Early' certificates are generally worth more than later certificates of the same or similar type. Most certificates on the market date from the 19th or 20th centuries, and 'early' is a relative term. An 'early' aviation share might be from about 1910, an 'early' automobile piece from the 1890s, railway certificates from before 1850, canals from the 1790s, and so on. Great age suggests rarity and adds historical interest, sometimes throwing new light on the earliest days of our industry and commerce.

ISSUED OR UNISSUED
Many collectors feel that unissued and partly issued material is less 'valid' than issued certificates, and the prices are generally lower. Nevertheless, unissueds are sometimes the only examples available of a certificate, or a rare form of a common issued piece (in particular, Chinese bonds). Specimens and proofs, especially of famous printers such as the American Banknote Company, can command prices well above issued examples. They are usually in immaculate condition.

CONDITION
It is wise to collect only certificates in the best condition available. They will cost more than poorer examples, but, apart from being nicer to own, they are a better investment and will be much easier to sell later.

RARITY
Many factors determine rarity. Among them are:-

Number issued
Redemptions and cancellations
Age

Bear in mind that "unique" usually means "the first one seen"!

RESTRICTION ON PUBLISHING

This section may be freely reproduced, electronically or in print,
provided that the following statement is included:

These pages About Scripophily are based on extracts from the forthcoming
I.B.S.S. publication, Scripophily Guide. Copyright is retained
by the International Bond & Share Society, London, 1998. 

(C) Copyright 1998 The International Bond & Share Society. All rights reserved.

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