By Claudia Buck
Special to the Times
---- — In their glory days, paper stock certificates were mini artworks, embellished with engraved images of eagles, cherubs, Gold Rush miners and sheaves of wheat. Or even sexy Playboy centerfolds.
Today, they’re financial-document dinosaurs, going the paperless way of U.S. savings bonds and Social Security checks. In an era of instant electronic stock trading, getting a paper stock certificate is downright difficult.
“It’s a bygone era,” said Cameron Beck, investment adviser with UBS Financial Services in Sacramento, Calif., who said it’s been more than 10 years since a client even asked for a paper certificate.
And when clients do ask, companies like UBS and Charles Schwab charge $500 to handle the transaction.
While most of Wall Street’s publicly traded companies will issue paper shares if asked, more than 420 companies — Apple, Chevron, Intel and Visa — no longer do. According to the Depository Trust & Clearing Corp., stock trading could be virtually paper-free in three to five years.
But even as paper certificates disappear from the financial world, they live on as specialty gifts and collectibles, whether for sentimental, artistic or history-laden reasons.
Judging by numerous comments to the Sacramento Bee recently, many old certificates are family treasures, harkening to a time when the buyer’s name was inked in handwritten flourishes and shares cost as little as 10 cents each. Even the company names are colorful relics of the past: Sawdust Burner Co., Spider & Wasp, Gray Goose Airways.
“They struck a chord with me,” said Dick Brothers of Sacramento, a retired state government IT manager, who inherited about 20 turn-of-the-century gold and copper mining company stock certificates from his grandfather.
“They’re part of our family’s history,” said Brothers, whose grandfather, Arthur Buel, was editorial cartoonist for the Sacramento and Fresno Bee papers from 1922 until 1942.
Similarly, Bettie Tsuda, a retired state worker, keeps a dilapidated box of 50 paper stock certificates that her grandfather and other immigrant Japanese farmers received for investing with Producers Free Market Inc., a 1930s downtown Sacramento market where her family sold vegetables.
Purchased in pre-World War II years before many Japanese families were shipped off to internment camps, the shares hold “both sentimental family value and historical value,” Tsuda said.
Some hope, only half-jokingly, that Grandpa’s vintage stocks just might yield a small fortune.
Leonard Walker, a retired U.S. Army sergeant major in Rancho Cordova, Calif., has his father’s 1930 paper certificate for 110 shares of Gray Goose Airways, along with a yellowed newspaper clipping about the former Denver company’s oddly-shaped, flapping-wing aircraft, called an “ornithopter.”
His father, then an unmarried Montana cowboy, spent $11 for his shares, back when you “had to herd a lot of cows” to earn that kind of speculative investing cash.
Now 80, Walker says he researched the stock. “I always hoped that Gray Goose airline had maybe merged with McDonnell Douglas or Boeing in later years,” said Walker, “but no such luck.”
Similarly, with his father’s various mining stocks, Brothers checked every company name with secretary of state offices in Alaska, Nevada, Washington and elsewhere. In every case, the companies were declared “expired,” “moribund” or “forfeited for nonpayment of taxes.”
But even with a long-dead company, there can be collector value in many old stock certificates.
Websites like Scripophily.com and OldStocks.com buy and sell vintage stock and bond certificates. Collectors value them for their artwork, historical significance, personal company connections or famous signatures, said Bob Kerstein, CEO of Chantilly, Va.-based Scripophily.com.
The highest price paid on Scripophily: $125,000 for an 1880s Standard Oil Co. certificate signed by John D. Rockefeller. Other rarities include Civil War-era bonds issued by the Confederacy.
Among paper shares on Scripophily’s most-wanted list: Playboy stock from the 1970s and ‘80s that featured a voluptuous engraving of a reclining centerfold.
Susan Platt, a Gold River, Calif., resident, has one. She bought it in the 1970s — “as a joke gift” — for her father, a longtime investor who hung it in the family’s rec room.
“He loved it. He had lots of paper stock certificates,” said Platt, “but none like that.” She offered to share her certificate with The Bee, but worried that the nude centerfold might not be suitable for a family newspaper. (She was right.)
While some lament the disappearing paper stock certificate, brokers and industry experts say trading them is problematic and expensive. There’s the risk of losing them in a fire, flood or theft; long-term storage and safety concerns; delays in buying and selling paper shares, which must be authenticated and physically transferred between buyer and seller.
“Even longtime investors and older clients understand the impracticality,” said Beck. “There really isn’t any reason (for paper shares) other than nostalgia.”
Claudia Buck writes for the Sacramento Bee; this story was distributed by MCT Information Services.
STOCK CERTIFICATES History: Scholars disagree on when the first trading of corporate stock started. Some say it was with the Dutch East India Company in 1602; others contend it started much earlier, in ancient Rome. Going paperless: In the late 1960s, a paperwork crisis hit the New York Stock Exchange as trading volume reached 12 million shares a day. Overloaded clerks, processing paper stock certificates and checks, couldn't keep up with the backlog, requiring the NYSE to shut down for certain periods every week. In the mid-1970s, faster computers and data-processing tools began the evolution to electronic trading. Starting in the 1980s, the NYSE, the U.S. Treasury and others began holding paper certificates in central depositories and doing "book-entry" accounting, where no paper trades hands. Today: As of 2009, the federal government and all states no longer require publicly traded companies to issue paper stock certificates. Most companies still issue them if requested. In 2005, the cost of issuing, processing, replacing and storing paper certificates was estimated at $250 million a year, according to a study by the Depository Trust & Clearing Corp., a clearinghouse for electronic transactions. Buying paper: Even if a company offers paper shares, brokerages charge as much as $500 to handle them. To obtain a paper share at no charge, contact the company's transfer agent (listed on the company's annual report or website). Or ask your broker to purchase stock in "direct registration" in your name (there may be a fee). Figuring value: To check if a defunct company's paper certificate holds any value, contact the stock's transfer agent, your broker or the secretary of state's office where the company was located.