Scripophily FAQs

How Scripophily Got Its Name
Scripophily (pronounced skri-pahf-ily) is hardly a household word, even among collectors themselves. In April of 1978, the Times announced the formation of a contest to find a suitable name for interest in stocks and bonds collectibles. The newspaper chose “bondaphily,” but the term encountered a negative reception. Another reader, who happened to be a fledgling collector himself, offered a bond worth ten pounds to the reader who created the most appropriate name for the hobby. On May 9, 1978 the winner was announced. Arthur Howell of Brighton submitted the winning entry, “scripophily.” Mr. Howell derived his winning entry from the English word “scrip” (as in a provisional certificate as for shares, share certificates, or shares or stock collectively—an abbreviation from “subscription receipt”) and the Greek “philein” (meaning “to love”).

Stock Certificate
A stock certificate, or simply a stock for the purposes of this discussion, is a document that shows ownership of a certain portion of a corporation. This ownership is expressed in a specific number of shares owned or held in that company. Shares purchased in the original offering for the company are acquired at a set price. Later offerings, if any are made, generally take into account the prevailing market values for the stock.

Issued Stock
Issued stock reflects the actual amount of paid-in capital from shareholders whose stock is equivalent to their receipt. An issued stock contains the name and address of the owner, the number of shares purchased, date of purchase, and the signature (either handwritten or facsimile) of a company official or officials. It is considered to have more historical charm.

Issued stock certificates are more desirable to a collector in just about any instance because of the history behind the issuance and because they often bear the signatures of officials of the corporation. The only exception is when certificates exist only in unissued form, as in the case of a company that was formed, but never sold stock and never actually existed in a tangible sense other than the stock they produced for sale.

Unissued Stock
An unissued stock is a leftover from the company that was never filled out, or issued to anyone. Often these were found with office records after a company closed. In some instances, issued stock of a given type did not exist. Unissued stock is often found in fresh, crisp condition without folds. For these reasons, collectors often collect unissued stock.

Parts of a Stock

A little research into an unknown signature often will reap impressive rewards, as the individual may have been a local or state politician, financier, railroad baron, or military statesman with a rich historical past. Tracing a person’s history is a challenge, and an integral and fascinating attraction of the world of scripophily.

Cancellations. The issuing company always cancels stocks that have been sold, and then redeemed at the prevailing market value at the time of sale. This is done to prevent the certificates from inadvertently being redeemed again through accident, theft, or other fraud.

Cancellations come in a variety of forms. Early cancellations often were large, dark, and obtrusive lines through the body of the certificate. These crude and effective cancellations, often large “X’s”, were unsightly, but they definitely accomplished their assigned task. These gave way to pen lines through the actual signatures of company officials appearing on the stocks, sometimes of famous individuals. The negative effects of this practice are ameliorated somewhat; however, by the fact that these pen lines provide valuable signatures of famous people. This is the only way some signatures are available.

Ink cancellations gave way to a variety of machined cancels such as hole punches, pinholes, and others. Punches of various shapes and sizes either shredded a portion of the certificate or actually punched out pieces of paper in the shapes of stars, diamonds, hearts, and the like.

Last, but not least, was the use of the word “cancel” or “cancelled” that was either written, stamped, or punched across the face of the certificate. No interpretation is needed to understand the meaning.

Name of the Engraver, Lithographer, or Printer. The quality, intricacy, and overall aesthetic quality of a certificate depend heavily upon the company that produced it. Materials engraved by several of the more famous banknote companies, such as American Bank Note Company, are of utmost attraction to stock and bond collectors. The quality of the stocks printed by these companies is readily apparent. In the lower center or left margin the name of the company producing it can be found.

Artwork. The aesthetic quality of a stock certificate is of crucial importance to collectibility. Border scrollwork, lettering, vignettes and the like can be quickly inspected and evaluated. The finer and more intricate the artwork appearing on the certificate, the more valuable it can be. Higher quality artwork on certificates usually means they were engraved. Engraving is a lengthy process that results in the most beautiful certificates. In many cases, the quality of engraving found on certificates is so detailed that a small segment or vignette several inches square can be enlarged to page size without losing any detail whatsoever. A separate chapter will be devoted to artwork later on in this book.

Revenue Stamps. As a means of raising funds for federal coffers, the United States government enacted legislation during the 19th and 20th centuries taxing transactions involving stock certificates and other financial transactions. In some cases, these stamps also have to be affixed to manufactured goods. The federal government imposed stamp taxes on the issue and transfer of stocks and bonds. States may also have their own revenue stamps. These stamps often were printed in bright colors such as red or orange to stand out and easily be seen on certificates to show that the tax had been paid. These colorful stamps usually provide what little color appears on an otherwise plain certificate. Revenue stamps, while certainly not of major importance, are a plus if they are affixed to a certificate as they contribute to the general appeal of that certificate.

The above paragraphs reference the most important parts of a stock certificate. There are other factors to consider as an individual begins to collect stocks or bonds. The best way to familiarize oneself with the parts of a stock is to actually handle and closely inspect as many different types of certificates as possible. There is no real substitute for this type of “hands-on” experience.

Bond
A bond is purchased for an exact denomination to be paid back by the issuing company or government. It is for a specific period of time and at a fixed rate of interest. Bonds differ from stocks in that the face value of the bond is the actual value. The guaranteed interest payments at fixed intervals, often quarterly, make returns on bonds a more stable and safe return for investors. Bonds are issued in limited, readily verifiable numbers, while the exact number of stock certificates issued, especially over a fairly lengthy time period, is often difficult to ascertain.

Parts Of A Bond
Most of the factors discussed under “Parts of a Stock Certificate” are also applicable to the parts of a bond. However, there are several basic differences that need to be explored. The following is a discussion of those factors unique to bonds.

Denomination. Every bond has the amount it was sold for on the face of the bond, thus the term “face value”. Occasionally the amount is written in. Normally the amount is printed as part of the bond itself. This frequently appears as a dollar amount imprinted squarely centered on the front of the bond. Although this face value will vary a great deal from hundreds to even thousands of dollars per bond, those issued in $1000 amounts are probably the most common denomination found.

Interest Rate. Since bonds are sold to investors who are seeking a fixed rate of return on a safe investment, the rate of interest paid will also be noted on the bond. The interest rate, while of interest to the collector and a factor not to be overlooked, is not of major importance to overall collectibility.

Maturity Date. The date the bond matures and becomes due for full payment at face value should be checked. As with the interest rate, it also is not too important from a collectibility point of view.

Coupons. Coupons, ranging in number from a handful to many dozens for each bond, are attached to the bottom or sides of the bond. Often they are on one or more separate sheets. When an interest payment is due on the bond, the bondholder simply clips the correct coupon and redeems it at a bank or at the issuing company offices. Normally the interest rate of the bond and the date of payment are on each coupon. Other information such as the form of payment, such as gold coin, would also appear. Attractive, fresh, crisp coupons are a definite plus for bonds, especially if the bond was redeemed early and numerous coupons remain attached.

Issue Number. All bonds and stocks are numbered. The difference is that bonds are issued and sold in exactly defined numbers, as opposed to stock certificates, which may be sold in issues of varying sizes over many years. The easiest way to determine the maximum number of bonds that were sold in a bond issue is to divide the total face value amount of all the bonds sold by the denomination of each bond. This information is on each bond. For example, if the total sold was $3,500,000 and each bond cost $1,000, divide the total sold by $1,000 to determine that 3,500 bonds were sold. Remember that this was the total number allowable to be sold. All of the bonds might not have been sold for any given bond issue and sale. This number, although not nearly as important as low stock certificate numbers, is worthwhile information that not only indicates the size of the issue, but your bond’s place in that issue.


Grading
When examining a stock or bond, look it over very carefully. Check carefully for any physical defects that detract from the stock or bond. Take note of the edges: are there any tears, pieces or “chips” of the item missing, crinkling, etc? Look also for fold marks or tears, water staining, errant ink marks or browning of the item. This browning is called foxing. Always be critical in your appraisal of the overall condition as that condition is of very basic importance to the item’s collectibility.

To aid in establishing condition, stocks and bonds can be graded or rated according to how they stack up after a thorough and objective examination. Following that examination, one of the following five grades can be assigned to the stock or bond.

Uncirculated [UNC]. This is the highest rating that a stock or bond may receive. Items in uncirculated condition are found as clean and crisp as when they were issued. To use an old saying, they look as if they just came off the printing press. In some cases, these are unissued stocks or bonds that were never sold and perhaps were stored in office files. Since unissued materials are not as desirable as issued ones, they would not be in demand. Issued certificates in uncirculated condition are real prizes within the world of scripophily.

Extremely Fine [EF]. This next rating indicates a clean document, almost in the condition issued originally, but perhaps showing traces of folds or some minor defect. This defect detracts little from the overall condition and/or collectibility, but the EF rating indicates that the certificate is not perfect.

Very Fine [VF]. A document receiving this grade would be one clearly showing wear such as minor folds or creases. Stocks and bonds in the VF category could best be described as “average”.

Fine [F]. Here are items that, although still legible, are very creased and worn. They may have fold tears, frayed edges or the like. In most cases, only rarities and scarce items such as autographed pieces would be purchased in this condition. Collectors should avoid including too many certificates in their respective collections that have an F grade.

Fair. No abbreviation is used for this grade, as the term “fair” is self-explanatory. Stocks and bonds in fair condition are those of the poorest condition, items that are extremely creased or worn, having seen a great deal of handling and circulation. Few documents in fair condition should be purchased under any condition.

Purchasing materials in UNC or EF condition translates into having to pay higher prices. This can be especially difficult for new collectors or those on limited budgets. The best advice is to buy pieces in the best condition possible unless you are simply interested in quantity instead of quality. Strive to buy only top quality material, even if it means having only two or three pieces instead of ten. Sometimes beginners tend to acquire more pieces and ultimately have undesirable items. An easy way to avoid this is to remember to buy quality material the first time around.

Helpful Hints For Autographs

While important autographs are almost always found as company officials’ signatures on stocks and bonds, an occasional item will hold autographic importance if the certificate was made out to a well-known person. When the shares or bond were redeemed, the holder endorsed the security on the back. In this roundabout way, a few more noteworthy autographs are found.

Sometimes the security owner was also the company official who signed the certificate in an official capacity as treasurer or president of the company. A situation like this arose when company officials purchased the first shares in a company offering. In this way, a stock or bond would have two valuable autographs, one of a company official and the other of the holder/endorsee of the security. Instances such as this are uncommon, but definitely do occur. Because these items are scarce and valuable, collectors will always want to verify that all signatures on a stock or bond, regardless of where they appear, are investigated as thoroughly as possible. A good example is a group of stocks that surfaced many years ago that were made out to “Fremont & Mortin” on the Cincinnati Railway Tunnel Company. Further research revealed that Fremont was the famed explorer and scout John C. Fremont. He had signed each of the 110 certificates on the back. Each one sold for $75 as a lot, with one selling in 1982 for $270. Examples like this one should keep scripophilists busy checking all signatures.

Cancellation Marks. Those pen lines, punch holes and written text – which were used to denote redeemed stocks and bonds, often were directed at company officials’ signatures on the item. The obvious intent was to show with finality that the security had been cancelled and could no longer be redeemed. By obliterating the signature, this was an excellent way to accomplish this goal. Levels of obliteration vary from minor to total. Cancellation marks through important signatures do not have to be the death knell for an autographed stock or bond, however. If that particular item is only found in that condition, then the overall impact on collectibility is minor since it only exists in that way. Naturally, an unblemished autograph is more desirable than one affected by one sort of cancellation mark or another, but in lieu of a “perfect” autograph, the other is still collectible.

In cases where an autograph is cancelled, faded, smudged or in some way affected in a negative manner, NO ATTEMPT SHOULD BE MADE TO REPAIR IT! No matter how well or for what reason it was done, the end result of repairs will always be visible and it will be a tampered document. The best advice is to leave the autograph alone. Do not try to replace missing pieces, trace over faded signatures or add anything. Nothing will destroy the value of a collectible stock or bond faster than physical alterations to the autograph.

Last, although secretarial signatures are relatively rare on stocks and bonds, they do exist. With this point in mind, the diligent scripophilist will always verify autographs whenever possible. For the more famous signatures appearing on stocks and bonds, general books on autographs that provide signature samples will be extremely helpful. For lesser ones, several of the biographical sources mentioned earlier in this chapter such as the Dictionary of American Biography and National Cyclopedia of American Biography often give facsimiles of signatures to help verify the authenticity of autographs found on stocks and bonds. Although secretarial signatures are not that common, the signatures should be checked for authenticity whenever possible.

Perhaps no other facet of collectible stocks and bonds offers such a personal and immediate link to our historical past, as do autographed varieties. Simply possessing a stock certificate signed by John D. Rockefeller or Cornelius Vanderbilt is a thrilling experience. When that experience is multiplied many times by collecting similar material, it quickly becomes obvious why autographed stocks and bonds are the Cadillacs of the world of scripophily.

Scripophily Preservation, Storage And Display

Once a basic collecting specialty or specialties has been chosen and the actual collecting of stocks and bonds begun, it is now necessary to preserve, store, and in many cases, display your collection. The acquisition of material is really just the first step in beginning and maintaining a collection of stocks and bonds. Along with the pleasure of actually acquiring material and studying it comes the constant effort required to take care of your collection.

Often these vital elements of scripophily are overlooked or not given much attention. The end result is a worn, dog-eared and sometimes disintegrating collection. The value of certificates in such a condition diminishes rapidly. In this way, scripophily is no different than any other area of collectibles. Constant attention to the essential, often unglamorous, parts of collecting covered in this chapter is absolutely necessary.

Ideas and suggestions are given here to guide the collectors into some methods for preserving, storing and displaying their certificates. Undoubtedly collectors will devise their own methods of handling the physical aspects of collecting stocks and bonds, as they become more experienced.

Preservation. As with any paper collectible, stocks and bonds must be preserved in the best possible condition. In most cases, items purchased from reputable dealers will be in good condition and will not require any cleaning. However, material found in attics, flea markets, antique shops and the like will often require cleaning. Any dirt or other foreign matter adhering to the paper must be removed.

Carefully wipe the stock or bond very gently with a soft cloth such as cheesecloth, an old cloth baby diaper or a cotton cloth. The cloth may be lightly dampened with a small amount of water, but use extreme caution so there is no streaking or smearing on the document. These types of marks caused by the water are virtually impossible to remove. Always keep in mind that because condition is such an important and integral part of collecting, care should be taken to insure that your cleaning efforts do not cause more harm than good, thus leading to some permanent damage to the stock or bond.

Masking and cellophane tape are seldom found on stocks and bonds. If they are, they can cause serious problems in terms of removal, damage to the paper, and browning. Carbon tetrachloride works effectively in dealing with tape removal. It requires an experienced hand to use this chemical safely and properly, as it is toxic.

Tears and physical damage evident on an item should not be touched. Even the most careful efforts can lead to disastrous results and can often compound existing problems. Tape removal, mending tears, deacidification, and other physical repairs are jobs that normally should be preformed by experts. Often silking is the answer to perhaps an especially fragile, brittle document.

The value of a document, either from a monetary or collectible point of view (or both) will act as the main determinant of the extent of your restoration efforts and the expense you wish to incur. One well-known firm that specializes in document preservation is B. Gimelson Paper Restoration Laboratory, 96 S. Limekiln Pike, Chalfont, PA 18914. If partial or major restoration or repairs are necessary, this is one company that has broad and successful experience in dealing with all the problems common to paper collectibles.

Another common problem encountered with stocks and bonds are fold or crease marks. Due to their sometimes-large size and to accommodate storage facilities, stocks and bonds were frequently folded, generally into thirds, similar to the manner in which legal documents were folded for storage. Fold and crease marks can be very stubborn and resistant to attempts at flattening. Stocks and bonds should never be left in a folded state unless absolutely necessary.

Several methods may be attempted for pressing stocks and bonds. Ideally, a paper press is the best for this purpose, but most people will not have access to one. A more practical method is to place unfolded items under a stock of books or record albums and left overnight or for at least eight hours. Albums are especially effective because of their weight, large size and uniform flatness. Any stock or bond being pressed in this fashion should always be protected on both the front and back by placing it between sheets of plain white typing, copy, or art paper. This will prevent any color from rubbing off onto the certificate.

If the fold still refuses to relax, you may try a simple remedy which authors have found effective. Dip your index finger into lukewarm water and apply the smallest amount of wetness to the sharp edge of all folds and creases and return the document to the press overnight. This procedure works very well without damage or staining. It results in a flat and freshly pressed item. Collectors and dealers may question the wisdom of using water, no matter how minute the amount. This author has used this technique many times, including wetting folds that pass through an ink signature, with a great deal of success. Although no absolute guarantees exist that will prove this method will have no problems, if caution is used, no difficulties should arise.

Storage. Once the necessary cleaning, repairing or pressing tasks have been completed, the stock or bond is ready for permanent storage. Individual folders may be used for an item or group of items. These are good protection, but less than desirable for display purposes. Albums provide the perfect solution for both storage and display. They are made of sturdy vinyl and the pages within are made of clear, acid free acetate.

At this point the question of acidity in paper will be discussed. Prior to the 1840s, all paper was made with varying degrees of rag and occasionally linen content. Paper from the pre-1840s period is virtually indestructible, much of it surviving in excellent condition today.

The discovery of a wood pulp process in the early 1840s introduced a cheaper and more easily mass-produced wood pulp paper. Although quality paper was still produced, the majority of the paper was the wood pulp variety.