Collecting Stocks and Bonds: A Collector's Storyby Frank Hammelbacher
(adapted from our Treasury of Mining Stocks)
Antique stock fever! Since I was born too late to prospect for gold in the 1850's & 1860's, and since I live in New York City, I am satisfying my collecting urges by searching for old stocks and bonds of the United States. Mines of the West are my specialty though there are many areas in which to collect. Growing interest in collecting old certificates, or "scripophily", makes it useful to examine how certificates are evaluated.
The most important thing is that you enjoy the hunt. Sometimes luck is good, sometimes not. The "droughts" can be long.
Stocks and bonds are very different financial instruments and are issued by corporations for different reasons. A stock indicates part ownership of the company. Prior to 1872 the stock could represent a fixed number of tunnel "feet to the share", or (as is the case nowadays) the stock could represent a percentage of the company. A bond represents debt of the company, and the terms of repayment (such as date due and percentage payout) are usually specified on the bond. Few old mining bonds appear on the market.
There are a number of factors to be considered in deciding how to form your collection and what to trade or sell. These ideas should be thoroughly understood since they apply to all types of stock or bond certificates, even though this guide was written with mining stocks in mind.
It is important to become familiar with rarity and prices in the market. Dealers' catalogs should be examined. Auction catalogs are useful although you have to take auction fever into account when evaluating winning bids. Of late, on-line stores are useful sources. Prices range from fifty cents for recent issues to over $100,000 for the most important autographs on certificate. $20 to $300 will suffice for most purchases.
Reference books will help you learn about your collection. "Mineral Resources West of the Rocky Mountains," by J. Ross Browne, 1868, is an excellent source of early mining district and mine descriptions. Also useful are the Fisher "Manuals of Valuable and Worthless Securities" and Scudder's "Manual of Extinct or Obsolete Companies". In addition, you can write for information to the Secretary of State where the stock was issued.
Naturally, greater rarity enhances value. Mining certificates tend to be found in much smaller quantities than railroad certificates since the many railroads issued copious amounts of stocks and bonds, many went bust, and some railroad archives have preserved ALL their certificates for a hundred years or more. It is possible to collect every mine offered within certain categories, as explained below. Unfortunately, it is usually not known how many of a certificate survive, so "flooding" of the market in any certificate is always possible, and what appears rare may not be. It is important to know your sources: the railroad archives may preserve thousands of the same piece, while an estate may have only one.
Some people collect only gold and silver, while some prefer coal, copper and other minerals. All may be worth collecting.
Metal mines were located in all western states, but certificates are found most often from Nevada, California, Colorado, and Arizona. Some collectors want everything from a particular geographic area. Early mining certificates from certain states are very uncommon.
Like gold itself, mining stocks may be decorative. The Illinois Gold and Silver Mining Company certificate was issued in the Smoky Valley District of Lander County, Nevada Territory, on September 19, 1863. The printers (Waters Brothers of San Francisco) did a fine job in the vignette (picture) of a hard-rock mining scene. Some collectors restrict themselves to vignetted pieces, though this approach may overlook historical value. Certificates may be handwritten, typeset, lithographed, engraved or a combination of these processes may have been used.
Interesting company names are desirable. Mines often featured important personalities of the time. The Old Hickory of Nevada Territory picturing Andrew Jackson is a fine example.
One of the most important distinctions in certificates is the date of issue. Some collectors want only territorial dates (which of course vary from state to state). Since statehood often reflected an increase in population and industry in an area, this is a logical cutoff. There are important exceptions to this rule. The Sutro Tunnel certificate was issued after Nevada became a state on Oct. 31, 1864. The significance of the tunnel in draining excess water from the mines of the fabulous Comstock Lode plus the rare signature of Adolf Sutro on stock certificate make this piece a classic.
Autographs from important persons greatly affect value. The Cody-Dyer Arizona Mining & Milling Co. near Oracle, AZ was important in the financial ruin of Buffalo Bill. No doubt the signed defunct stock is worth more today than the live stock ever was. Certificates signed by the Silver King, Horace A.W. Tabor (known for the rich Matchless Silver Mine near Leadville, Colorado and his wife, Baby Doe) are rare and highly desirable. The value of this ugly stock is in its history and in the autograph.
Issued certificates are considered more collectible than unissued, since the former are examples not only of printing but also of history. This is the opposite of stamp collecting where mint stamps are generally more valuable than used ones. If you’re after decoration, then for a few dollars (often under $35) you can buy some marvelous unissued examples.
Condition of a certificate is very important, though to me an interesting damaged example is better than none at all. Some collectors will not buy a damaged certificate under any circumstance. One of my favorites is the Cleopatra Gold and Silver Mining Company of Virginia City, NV, 1863, which pictures the Queen herself. Repairs should be undertaken with caution. If you don't know what to do, DON'T DO ANYTHING.
An important reason for collecting is the adventure along the way. I haven't forgotten the dealer with half-empty hip flask in Goldfield, Nevada who chased this "city slicker" back to his car when I told him his stocks were nice but not rare. Or being invited inside Aspen Mountain into the Park Tunnel after I'd found some of their certificates. Or flying worldwide to attend auctions and do deals. Or spotting four great certificates from 1840 in a dealer's five-dollar box.
The increasing "collector pressure" may lead the uninitiated to think all certificates have great value. It’s very important to study the market or at least work with a knowledgeable dealer you can trust. As in the Old West there are also the occasional "promoters" to watch out for. Knowledge of the material is the key.
Once you have acquired old stocks or bonds, the question arises of what to do with duplicates or those that don't fit in your collection. You may wish to hold everything and hope for appreciation in value, with the risk that more of the same certificate will surface and drive value down. You can sell via auction, wholesale to dealers, or become a part-time dealer. That's probably how most dealers have started their careers.
There are many Sources of old stocks and bonds. I have made purchases at flea markets, ephemera shows, estate sales, antique shows, museums, historical societies, collector meetings, business liquidations, auctions, banks, and garbage dumps. I started collecting on the day in 1979 when I pulled certificates out of a dumpster where a millionaire had discarded thousands of dollars worth of fabulous old Aspen memorabilia.
A quarter of a century later, I'm still having fun searching and adding to my collection.