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What is Scripophily?
by Bob Kerstein

SCRIPOPHILY (scrip-af-il-ly), the collecting of canceled old stocks and bonds, gained recognition as a hobby around the mid-1970s.  The word resulted combining words from English and Greek. The word "scrip"  represents an ownership right and the word "philos" means to love.   Today there are thousands of collectors worldwide in search of scarce, rare, and popular stocks and bonds. Collectors who come from the a variety of businesses enjoy this as a hobby, although there are many who consider Scripophily an good investment. In fact, over the past several years, this hobby has exploded.   Modern Dot companies and Scandals have been particularly popular.  You can find our more about modern collectible stock certificates at ModernStocks.com

Many collectors like the historical significance of certificates. Others prefer the beauty of older stocks and bonds that were printed in various colors with fancy artwork with ornate engraving. 

Many autograph collectors are found in this field, looking for signed certificates of famous people like John D.Rockefeller of Standard Oil Company, Franklin Fire Insurance Company signed by famed economist Henry Carey issued in 1836,  Ringling Bros. Barnum & Bailey Circus,  Atari Corporation,  Eastern Air Lines with Captain Eddie Rickenbacker as President, Certificate signed by George Bush's Great Grandfather Samuel Prescott Bush, Broadband.com, Tucker Corporation and many others.  As many certificates become harder to find, Scripophily is an exciting hobby with lots of challenges and potential.  Since the hobby is relatively new (around 20 years),  it prices are still very reasonable.  Where can you find a 100 year old piece of history with a an excellent engraving for under $40? Fortunately the hobby hasn't hit the boiler room call centers yet!

There are many reasons that contribute to the success of this hobby. First of all, it is a worldwide collectible since almost all countries of the world have issued stocks and/or bonds through their governments or businesses. Each certificate is a different piece of history. It describes the company, the type of instrument (usually stock or bond), the year, signatures of officers or officials, who it was issued to, the printer, due date for bonds, and much much more. Many of the certificates have pictures or vignettes showing anything from cars to trains to Indians to leaders to nothing at all. 

Due to the computer age, more and more stock and bonds are issued electronically which means fewer paper certificates are issued as a percentage of actual stock issued.  During the past several years, the Internet has played a major role in the awareness of the hobby.  We have been able to display and sell thousands of items from our inventory on our shopping cart at Scripophily.net.  Our customers come from all over the world.  We started in 1996 with a selection of 50 certificates and now have over 6,300. Without the Internet, this would not have been possible

The hobby of Scripophily is one of the most fascinating areas of financial history. Over the years there have been millions of companies which needed to raise money for their businesses.  In order to do so, the founders of these companies issued securities. Generally speaking, they either issued an equity security in the form of stock or a debt security in the form of a bond. However, there are many variations of equity and debt instruments. The can be Common Stock, Preferred Stocks, Warrants, Cumulative Preferred, Bonds, Zero coupon bonds, Long Term Bonds (over 400 years) and any combination thereof.  

When I was CFO at American Mobile Satellite and we did our roadshow to go public, we flew in a jet for two weeks and visited over 20 cities.  I can't even imagine what a roadshow must have been like 100 to 150 years ago.  Roadshows by horseback, stagecoaches, trains, etc.  What a different world it is today.

Just as each company is different, each certificate is different as well. The color, paper, signatures, images, dates, stamps, cancellations, borders, industry, Stock Broker, name of company, transfer agent, printer, holder name all add to the uniqueness of the hobby. Each company needed to raise money to get into business. Each company had their own story as to how they did it. These certificates give us a piece of that story.

Some of the companies became major success stories. Some the companies were acquired and merged into other companies. Some of the companies and industries were successes for of time, but were replaced by improvements in technologies. The railroads are a good example of this.

Most the companies, however, never made it and the certificates became worthless pieces of paper....until the hobby of Scripophily came along!  There were many bubbles that came and went.  The mining boom in the 1850's, the railroad build out beginning in the 1830's, Oil Boom beginning in the 1870's, Telegraph beginning in the 1850's, Automobile Industry beginning at the turn of the 20th,  Century, Aviation beginning around 1910 after the Wright Brothers, Electric Power Industry in the 1930's, Airline Wars and Takeovers beginning in the 1970's, Cellular Telephones beginning in the mid 1980's, Banks in the 1930's, Saving's and Loans in the 1970's,  Long Distance Telephone Service in the 1990's, and most recently the Dot Com rags to riches to rags chapter.   

There are many factors that determine value of a certificate including condition, age, historical significance, signatures, rarity, demand for item, aesthetics, type of company, original face value, bankers associated with issuance, transfer stamps, cancellation markings, issued or unissued, printers, and type of engraving process.

Condition   -  The grading scale that could be used in stocks and bonds is shown below.  Generally speaking, however, the grading is not used in the hobby as strictly as it is in coins and stamps.  Most people acquire certificates for the artwork and history.  Fortunately, the hobby has not made it to the slabs yet.

• Uncirculated - Looks like new, no abnormal markings or folds, no staples, clean signature and no stains
• Extremely Fine - Slight traces of wear
• Very Fine - Minor traces of wear
• Fine - Creased with clear signs of use and wear
• Fair- Strong signs of use and wear
• Poor- Some damage with heavy signs of wear and staining

Age -  Usually the older the more valuable, but not always.

Historical significance    -  What product did the company produce? Was it the first car, airplane, cotton gin, etc. Did the company make it? Was it a fraud? What era was the item issued i.e. during a war, depression, industrial revolution?

Signatures -  Did anyone famous or infamous sign the certificate?

Certificate Owners Name  -  Was the certificate issued to anyone famous or a famous company?

Rarity -  How many of the certificates were issued? How many survived over the years? Is the certificate a low number?

Demand for item   -  How many people are trying to collect the same certificate?

Aesthetics   -  How does the certificate look? What is in the vignette? What color of ink was used. Does it have fancy borders or writing on it?

Type of company -  What type of company was it issued for? Does the industry still exist? Has the industry changed a lot over the years?

Original Face Value -  How much was the stock or bond issued for? Usually, the larger the original face value, the more collectible it is.

Bankers associated with issuance - Who worked on the fund raising efforts? Was it someone famous or a famous bank? Is the bank still in existence? - Who worked on the fund raising efforts? Was it someone famous or a famous bank? Is the bank still in existence?

Transfer stamps -  Does the certificate have tax stamps on it - imprinted or attached? Are the stamps valuable or unusual?

Cancellation markings -  Are the cancellation markings interesting to the item. Do they detract or add to its history and looks?

Issued or unissued   -  Was the item issued or unissued. Was the certificate a printer's prototype usually stamped with the words specimen? Usually the issued certificates are more valuable and desired.

Printers -  Who printed the certificate? Was it a famous printer?

Type of engraving process  -  How was the certificate made? By hand? By Wood engraving? Steel Engraving? Lithograph? Preprinted Form?

Paper   -  Was the paper use in the printing high quality or low quality. Has it help up over time? Does it have a watermark used to prevent counterfeiting?

As you can see,  Scripophily is more than just collecting another piece of paper. It is collecting history. It is something everyone from all ages and all parts of the world can enjoy. The more you see, the more you collect, the more you appreciate that stocks and bonds were the monetary fabric that built the world as we know it today. 

At Scripophily.com we hope you enjoy this hobby as much as we do!  It's not just a job for us, it's an adventure in financial history!