collectors and scripophily enthusiasts have newly discovered and revived these historical documents

History of Scripophily

Historical documents, also known as "Nonvaleurs", are nonpar stocks and bonds currently in high demand by collectors. These mercantile antiques were long regarded as waste-products of the economic and financial past, sentimental souvenirs of long gone wealth often gathering dust in attics. In the last 20 years collectors and scripophily enthusiasts have newly discovered and revived these historical documents.

A collector named Haseltine began 1876 with amassing nonpar confederate bonds used to finance the American Civil War. 4 years later the wall street broker Roland M. Smythe abandoned his occupation to concentrate on the trade with historical documents. He predicted in an interview with the New York Herald Tribune on March 24, 1929:

"People will begin buying thousands upon thousands of old stocks and bonds in the hope of an increase in value. They will not be relinquished no matter what happens."

Smythe, the "trader with the broken dreams" (New York Herald Tribune), did not live to see the revival. Yet his memory lives on and adorns one of the great auction houses for Nonvaleurs "R.M. Smythe & Co. Inc.". Their current headquarters on 26th Broadway in New York was once shared by the great Standard Oil John D. Rockefellers headed by Diana and John E. Herzog, who was also an avid collector and founder of the "Museums of American Financial History, New York".

Famous acquisitions of the Museum on Broadway include a financial document of the Bank of New York from 1791 with an original autograph of Alexander Hamilton (Sotheby's, $ 20.800), as well as an early bond from 1780 signed by Benjamin Franklin (Tschoepe, DM 22.500). Another spectacular addition in January 2000 was a Pullman's Car Company Stock containing original autographs by George Mortimer Pullman and steel tycoon Andrew Carnegie ($ 77.000).

The pioneers in Germany were finance journalist Dr. Heinz Brestel and the newspaper company "Frankfurter Allgemeinen Zeitung". Dr. Brestel was the proud owner of a private collection of over 400 historical documents. In 1971 he published the worlds first list of quotations for historical documents. The first german auctions were finally held in 1975 by the companies Haas in Asperg and Leck in Frankfurt followed by the establishment of the worlds first "Historic-Actien-Museum" in Kuernbach in 1976. The coming years brought forth the auction houses "Freunde Historischer Wertpapiere" and "Auktionshaus Tschoepe" in 1980, who still organize two annual auctions in Frankfurt and Düsseldorf respectively. The founder Detlef Tschoepe innovated auction procedures by adding illustrations and descriptions such as circulation numbers, condition or availability to the lots.

The Londoner Times christened the collection and trading of historical documents Scripophily, which has gained international popularity. Auction houses were eventually established in England, France, Austria, Belgium, Netherlands, Sweden, Spain, Portugal, Switzerland and the USA. More Information regarding Scripophily can be obtained from the quarterly publication Scripophily Journal Katalogisierungen (Suppes, GET). Jakob Schmitz, a renowned author and collector, regarded historic documents in his book as a key to the past.

Another reference by Prof. Dr. Udo Hielscher (University of Leipzig) documents the rise of the American economy using historic American stocks and bonds. The second revised edition entitled " Die Finanzierung des amerikanischen Unabhaengigkeitskrieges und die Urspruenge von Wall Street" is available at Fritz Knapp Verlag, Frankfurt.

Similar information regarding 17th and 18th century Spanish incunabili can be obtained from the book "Koeniglichen Spanischen Handelsgesellschaften" by Alexander Kipfer.

In Financing the American Revolution, Udo Hielscher accomplishes something that has eluded almost every other author who writes about American economic history; he somehow finds a way to make the subject interesting, accessible, and visible. This handsome 95-page volume, published by the Museum of American Financial History, features 43 premium quality, full color plates of rare original documents, presented as a truly cohesive collection. Both the text and captions are well organized, and they are written in an informative and entertaining style. Hielscher chronicles America's economic history from just prior to the Revolution, and takes us step-by-step to the birth of the New York Stock Exchange under a buttonwood tree in 1792. Meticulously researched, beautifully designed, clearly and persuasively written, Financing the American Revolution is that rare book that can be read and enjoyed by academicians, collectors, and the general public as well. Don't miss it!

There are currently 6 German auction houses trading with historical documents. Jakob Schmitz justifies their existence by quoting "Don Joseph de la Vega", who 300 years ago described the first Amsterdamer stockholders as people who eat, sleep and think stocks.

Contemporary scripophily enthusiasts are no different than their colleagues 300 years ago. Historical documents not only give insight into past financial markets but also represent an era where bold inventions and revolutionary ideas pioneered today's progress.

The Banca di San Georgio founded in 1407 in Genua, Italy has long been regarded as the first company to issue state bonds and turn creditors into shareholders.

Hence began a new era in the history of finance.

The creation of joint-stock companies began in the year 1602 when the dutch Vereinigte Ostindische Kompanie began issuing shares to individuals. Though the actual beginning dates back to the 16th century when the spice trading company "Amsterdamer Pfeffersaecke" began pepper trade with Indonesia.

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Scripophily: The Art of Finance

The Development of Scripophily

For years stockbrokers (or disappointed investors) accumulated attractive certificates at random. Some became lampshades and others were stored in drawers or attics 'just in case". But Scripophily only began in earnest following the publication in 1976 of two catalogues in Germany listing and illustrating bonds issued by pre-revolutionary China and Russia. The catalogues were the result of doctoral research by two German bankers, Ulrich Drumm and Alfons Henseler.

Some two years later following the formation of the Bond & Share Society and the emergence of specialist dealers, the market got under way. Initially centered in England, early activity was concentrated on Chinese and Russian bonds which since their default had maintained a quotation on the London Stock Exchange. Prices in the collector market moved and matched those on the Exchange and inevitably a speculative interest developed which tended to over-ride the intrinsic qualities of the certificates themselves. Three years of frenetic activity and dramatic price rises were followed by a sharp market correction but by 1982, the publication year of this book's first edition, scripophily was truly horn - euphoria, birth pains and all.

Later Progress

Since 1982 the number of collectors has grown considerably in all parts of the world. This growth continues but still falls well short of the estimated 15-2O million stamp collectors or the many millions of banknote, coin, map and medal collectors. It is this enormous potential which many new collectors find so fascinating. From an initial base of around 300 collectors, estimates now put the figure at over 100,000. This increase has been achieved over only fifteen years and has been accompanied and encouraged by the establishment of many new dealers, auctions and local collectors' societies throughout the world stretching from New York to Australia. A list of major dealers and societies is given on page 152.

The number of publications, both books and magazines, has also increased and several are listed on page 153. But, perhaps of all the reasons for the growth, the most important has been the broadening of the field. No longer do Chinese and Russian bonds dominate the market. The establishment of the hobby in a wide range of countries has naturally led to the growth of local preferences; thus Swiss material is in great demand in Switzerland, early German shares in Germany, Palestine material in the Jewish community, Australian shares in Australia, and so on.

Apart from these localized biases, certain other sectors have risen to rank with China and Russia as internationally" acceptable. The most notable of these is US Railroads. A vast field covering over 9,000 different companies and a time span of over one hundred and fifty years, both share certificates and bonds are extremely attractive, often with vignettes of early trains, stations and the occasional American Indian. The railroads were a major factor in the economic development of the United States and, consequently, it is not surprising that it is this sector which has become especially popular both in America and across the World.

As research goes on, scripophily develops. Still at an early stage in its life cycle, collectors can not only look forward to exciting advances over the coming years but more importantly can participate in that progress.

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