Thursday, August 1, 2013

The Soldiers' Business Messenger and Dispatch Co. Creating luck.

As part of my ongoing quest for the next amazing Scripophily gem, I have started considering where material of interest might be in larger concentrations. My home is in New Jersey and from here I have spent hundreds of hours crawling around every antique center in at least a 200 mile radius. Sure, there might be a few towns I overlooked but for the most part, I pretty much covered it. I have found that the inventories of these places does not turn-over at any frequent basis so repeat visits rarely yield a significant return. The only exception to this rule is when I re-discover a certificate and find it is not ready to be added to my collection. So I make a note where I found it and return when I feel it's a better fit. So far, it appears that the North East has a rich history of manufacturing and company headquarters along with a major financial center. I have not yet traveled west of the Mississippi searching for more items but hope to get there someday. My trips to the south as far as South Carolina have not uncovered any items of historical interest. It seems any significant family papers that make it to market are swarmed by historians looking for famous people in history.       

Medal of Honor Recipient 
Major-General Alexander Shaler can I create more "luck" finding those rare, I mean really rare, certificates? I have proven that sweat and determination are two key characteristics necessary to uncover hidden treasures. I heard a funny comment earlier this week, that if you skip a flea market that you usually attend on any given Sunday, that will be the day that a real gem will be available and you'll miss it. Last Sunday I was debating with myself and decided after a few minutes to roll out of bed early to get to the flea market. Words cannot express how glad I am that I decided to travel the 45 minutes on a clear sunny day. I was strolling though the isles and was told by one of the vendors about another table with stock certificates. What I found had the combination of age, beauty, condition and relevance for truly desirable certificates. One gem caught my attention.

The Soldiers' Business Messenger and Dispatch Company certificate is dated 1868 issued and not cancelled signed by Medal of Honor Recipient Major-General Alexander Shaler, President and Secretary Col. S. Truesdell and Treasurer Brigadier General J. Henry Liebenau. The condition is extra fine with a revenue stamp tied in the lower right corner dated March 7, 1868. I have not seen one of these certificates before and am interested to hear from anyone with more information about the company beyond the basic material found on the Internet.  

The Soldiers' Business Messenger and Dispatch Company Issued 1868

The Soldiers' Business Messenger and Dispatch Company was created on April 15, 1867 as a way to provide gainful employment for maimed veterans that lived in New York and the orphan boys of soldiers that either died or were injured after while serving in the volunteer army of the United States. These soldiers were able to receive and deliver packages, bundles, property, and messages by sealed envelopes and magnetic telegraph within the territory known as the Metropolitan Police District made up of New York counties Kings, Westchester and Richmond headquartered at 2 Park-place. Messengers were paid $35 per month.

Basic costs for the messenger service;

10 blocks .10c
15 blocks .12c
20 blocks .15c
25 blocks .17c
30 blocks .20c
35 blocks .22c
40 blocks .24c
45-140 blocks  .25c

Additional fees were charged for excessive weight and ferry crossings.
The executives of the company and the board of directors were very prominent military officers.

Officers and Directors
Major-General Alexander Shaler - President  (Medal of Honor)
Major-General Henry A. Barnum - Vice-President (Medal of Honor)  
Brigadier General J. Henry Liebenau - Treasurer          
Brigadier General P. H. Jones - Secretary (Future Postmaster of New York) replaced by
Colonel Samuel Truesdell        

Board of Directors
General Alexander Shaler
General C. W. Darling
General P. H. Jones
Colonel E. A. Ludwick
General J. E. Hamblin
Colonel J. Henry Liebenau
General Henry A. Barnum
General G. S. Batcheller
General C. H. Young

The company planned on placing  a total of 800 booths between Brooklyn starting with 300 in New York City except on Broadway. Each booth was used for advertising and as a shop for newspapers, stationary, magazines and cutlery.  Booths were maned by a maimed soldier in charge given the rank of Corporal as they were unable to handle the typical messenger tasks. Corporals that manned the booth were able to keep the profit from their sales and if it the profit did not meet the $35, the difference was made up by the company. Salaries varied after the organization got off the ground. Special wagons were used on the railroad at regular intervals to carry heavy packages and groceries. Capital was also identified to lay telegraph lines and agreements were made with a telegraph company to use their poles throughout the city.

For full disclosure, in addition to the certificate above, I also found that day, two New York coal companies, a Gas Light company from 1865, 1868 and 1869 and an Atlantic and Great Western Railroad stock (ALT-536b-S30) in excellent condition from 1862. Yes, it was one heck of a day!

Wednesday, March 6, 2013

A Brief Look at the History of Corporations in America

History of Corporations in US
Where do you prefer to get your News? Me, I get my information from Yahoo home page and occasionally John Stewart's Daily Show. I figure if it gets mentioned there, it must be newsworthy. I even have friends that read a daily newspaper, can you believe it? Yes George G. I'm calling you out. No matter where you look, current events are littered with news about corporations lifting their veil of secrecy and revealing malfeasance, from the office of the CEO and disenfranchised Board of Directors to the unsupervised staff with the ability to lose billions of other people's money.

Corporations have been in existence for centuries starting from very humble beginnings. Religious orders and governments were the first to incorporate like the Benedictine Order of the Catholic Church, founded circa 529 AD identified as the oldest surviving corporation referenced by Bruce Brown in his book The History of the Corporation, Volume 1. Another thousand year continuously operated business was the Japanese temple construction company, Kongo Gumi, established in 578 AD that shut down in 2009 after a run of over 14 centuries. Image the CEO's decision knowing that he was responsible for the liquidation of that kind of dynasty. His parents must be proud but I guess building temples is a talent gone the way of the cooper. Kongo Gumi illustrates the primary need solved by incorporation.

Corporations were created as a means to outlive individual members of an organization.

While searching for a better understanding of the origins of corporations in America, I learned that as are typical with cycles, it appears the maturity of the large corporation has past its pinnacle of effectiveness and is in decline, being replaced by smaller agile disruptive businesses run by innovators. I hope you enjoy reading this as much as I enjoyed writing it. For more information please visit my long list of sources at the bottom of this blog entry.

For background, prior to the 1600s in European corporations were established for the public good and violation to the charters was punishable by law. In England a review by Parliament uncovered in 1721 systemic fraud perpetrated by the Directors of the South Sea Company.
South Sea Company
South Sea Company - 1721
Parliament confiscated the estates of the Directors and used the proceeds as a payout to the victims. Also during the1600s the first notion of a For Profit company appeared as a way to build the economic power within Europe and finance colonial expansion. At its origin, people who wanted to create a company had to have at least three people working together to form a corporation. A single person corporation was not even envisioned by the early lawmakers as liability remained with the managers of the corporation.
Many safeguards were established intended to keep control over the influence of companies when corporations were reinvented in the United States after our independence was won. How much tea can you throw into the Boston harbor anyway? Initially, the privilege of incorporation within the United States was granted by a vote from the State Legislators.  In 1811, New York was the first state to sign a bill into law creating the first Corporate statute allowing some form of Limited Liability Corporations thereby reducing the risk to the individuals responsible for the actions of the corporation. Eastern states battled for years to be considered the friendliest state to establish or move businesses to their states hoping to claim a larger proportion of the exploding commerce brought about by the expansion of the railroads and commerce. These early company regulations were so restrictive that industry tycoons like Andrew Carnegie created his Steel Company using a Limited Partnership and John D. Rockefeller structured Standard Oil as a Corporate Trust.

During the early days, corporations were designed in silos and operated as a individual entities. Directorates were not permitted to participate on multiple boards which is common practice in today's chase for personal notoriety and a few dollars. As reported by relying on a special screen generated by GMI Ratings, in 2011, the top 10 companies paid directors an average annual stipend in excess of $500,000. I imagine they also receive some pretty good travel and entertainment perks.  

Jane Anne Morris is a corporate anthropologist and creator of the Democracy Theme Park Her research into the history of the Wisconsin legislator found the following provisions:1
  • Corporations were required to have a clear purpose, to be fulfilled but not exceeded.
  • The state legislature could revoke a corporation’s charter if it misbehaved.
  • Corporations’ licenses to do business were revocable by the state legislature if they exceeded or did not fulfill their charter.
  • The act of incorporation did not relieve corporate management or stockholders/owners of responsibility or liability for corporate acts.
  • State (not federal) courts heard cases where corporations or their agents were accused of breaking the law or harming the public.
  • Directors of the corporation were required to come from among stockholders.
  • Corporations had to have their headquarters and meetings in the state where their principal place of business was located.
  • Corporation charters were granted for a specific period of time, such as twenty or thirty years.
  • Corporations were prohibited from owning stock in other corporations, to prevent them from extending their power inappropriately.
  • Corporations’ real estate holdings were limited to what was necessary to carry out their specific purpose(s).
  • Corporations were prohibited from making any political contributions, direct or indirect.
  • Corporations were prohibited from making charitable donations outside of their specific purposes.
  • State legislatures could set the rates that some monopoly corporations could charge for their products or services.
  • All corporation records and documents were open to the legislature or the state attorney general.
As an example of governmental control, in 1832, President Andrew Jackson refused to extend the charter of the Second Bank of the United States and the State of Pennsylvania revoked 10 banks’ charters. In 1819 in Trustees of Dartmouth College v. Woodward the U.S. the state attempted to remove the school's corporate status and failed. Supreme Court ruled in Dartmouth College's favor and upheld a contract issued by King George III in advance of the creation of the state. At its core, the decision was based on the fact that the contract did not allow for a termination by the state legislator. Citizen's in many states responded quickly viewing the verdict as an attack on state sovereignty. New laws were created or existing laws enhanced amending state constitutions allowing states to circumvent the (Dartmouth College v Woodward) ruling. By 1844, 19 states passed amendments making corporate charters subject to the whim of the state legislators.
Over time, companies gathered greater resources and began chipping away at the restrictive statutes placed on them at the creation of their charter. Back across the pond, an 1844, British law allowed companies to define their own reason for existence. Eleven years later, managers within corporations were awarded material limited liability from their corporate actions. From that date, personal property owned by company executives were protected from the consequences of their corporate behavior. Back in America, the turning point was the Civil War. This was a time where companies could exert significant influence in the political process as the Union was in desperate need of goods and services. Laws restricting trade with the confederacy were ignored if it helped with the war effort. Wm. Seligman & Co. and J. Seligman & Co. had many Union contracts producing uniforms, chevrons, and shoulder boards to designate rank. Seligman had existing relationships with cotton producers in the south that supplied raw cotton for their Dry Goods store, J. & H. Seligman. After the war broke out, Seligman continued with those relationships engaged in very risky arrangements and successfully delivered on the government contracts generating proceeds of $1,437,483.61 between August 1861 and July 1862.Abraham Lincoln wrote,
Abraham Lincoln
 "I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country. . . corporations have been enthroned and an era of corruption in high places will follow, and the money power of the country will endeavor to prolong its reign by working upon the prejudices of the people until all wealth is aggregated in a few hands and the Republic is destroyed."
Although debated as a fictitious entry attributed to Abe, research conducted by Rick Crawford, found the full entry in a letter from Lincoln to (Col.) William F. Elkins, Nov. 21, 1864.

The legal case in the United States that set corporations on the path to untouchable status arose out of the 1886 Supreme Court case between Santa Clara County v. Southern Pacific Railroad. Based on misleading summary notes of a court reporter, the documents from the decision subsequently were used as precedent to hold that a corporation was a "natural person." From there, companies used the newly drafted 14th Amendment enacted to protect the rights of freed slaves as leverage to grant corporations constitutional "person hood".

Since then, Justices have eliminated hundreds of local, state and federal laws enacted to protect people from corporate harm based on this illegitimate premise. Armed with this new status, corporations increased control over all of the areas that they were once prohibited including free speech, protection from illegal searches and seizures and free from discrimination just like a real person, Geppetto would be proud. This trend continues to this day. A 2013 Montana Legislature HOUSE BILL NO. 486 was introduced by Montana state Rep. Steve Lavin that would give corporations the right to vote in municipal elections. His response "I made a mistake of not paying enough attention to this bill," Lavin said. "It came through with that in there. This kind of surprised me in a way..." To the committee's credit, the bill was tabled shortly after it was submitted and is unlikely to ever become law. This type of political fodder would be comical if not for the careless nature of public concern by our elected officials.8

Once the camel's nose was under the proverbial tent, other rights and restrictions built into corporate charters continued to erode faster than a Russian Polecat racing down the Ural Mountains the morning of February 15, 2013.

New Jersey was the first state, in 1889, to allow one company to own the assets of another. From there, the rules on the books were erased at an even faster rate. New Jersey continued to lead the country in legislation when, in 1896, the “General Revision Act” was passed removing the restrictions on company size and market share, creating perpetual corporate charters, reducing shareholder powers, and allowing any purchase, mergers or acquisition demanded by a company. As if it were a competition, Delaware first got into the game in 1883 and, with indecision from New Jersey, passed the “General Incorporation Law” in 1899 setting the standard for companies to establish their own rules of governance held to this day as the friendliest state to businesses. 

I found the following paragraph on the web and like the way it describes the events around the errant 1886 legal decision. Excerpted from Culture Jam: The Uncooling of America (Kalle Lasn, William Morrow/Eaglebrook, 1999) 
“This 1886 decision ostensibly gave corporations the same powers as private citizens. But considering their vast financial resources, corporations thereafter actually had far more power than any private citizen. They could defend and exploit their rights and freedoms more vigorously than any individual and therefore they were more free. In a single legal stroke, the whole intent of the American Constitution -- that all citizens have one vote, and exercise an equal voice in public debates -- had been undermined. Sixty years after it was inked, Supreme Court Justice William O. Douglas concluded of Santa Clara that it "could not be supported by history, logic or reason." One of the great legal blunders of the nineteenth century changed the whole idea of democratic government.”3
Except for a temporary reprieve during Roosevelt's New Deal, the United States has since been governed by big business. Post-World War II corporations continued to build on the gains of the past. They evolved into mega global conglomerates exceeding the economical power of many third world countries. Gradually, many of the ideals created by the founding fathers were simply eliminated and soon forgotten.

Recent news of rogue trades and Ponzi schemes in the financial services industry have left their mark on the global economy. Again confirming the generally accepted principle that, left unattended, corporations lack basic morality and ethics in the constant search for greater profits answering only to shareholders. These executives are blinded by the idea of a higher stock price as their quest tied to their legacy as business magnates.

So today there are many different types of corporate structures in the United States. Popular company forms include the C-Corp, S-Corp, Limited Liability Corporation (LLC), Limited Liability Partnership (LLP) and a newly designed Benefit Corporation “B Corp” created in New Jersey in November 2011 and now available in five other states. Although they all serve a specific purpose, perhaps the B Corps are the most interesting. These companies harness the power of business resources to solve social and environmental problems. Perhaps the creation of this type of corporation and Occupy Wall Street activism are positive signs that the old ideas of corporate immunity and single minded profit goals have come full circle as the pendulum of reasonableness has return.

Contemporary business leaders are beginning to see the benefits of the balanced approach to profits with an eye towards a positive corporate citizenship.

Enron & Worldcom“As corporate citizens of the world, it is our responsibility – our duty – to serve communities where we do business … by helping to improve, for example, the quality of citizens’ education, employment, health care, safety, and overall daily life, plus future prospects,”5 CEO of Starbucks, Howard Schultz

Can the problem of corporations betraying the public trust placing profits ahead of humanity be solved and if so where should society's resources be focused creating the largest impact of change and accountability?

I humbly suggest that the simple, grass roots efforts akin to Occupy Wall Street do not have the necessary leverage or long term effect necessary to bring about this cataclysmic change. Others suggest the complete removal of PACs and special interest groups used to finance legislation reversing the cycle promoting the good for the few at the cost of the many. An idea of broad based incentive programs placed in the proper hands would level the democratic playing field. I am interested to hear other thoughts how today's capitalism can return to our version invented by early pioneers, industrialist and politicians using corporations to enhance our quality of life in this decade. When I write my blog entries I receive insight and guidance from a number of people. For this perspective on the history of corporations in the United States, I would like to thank my long-time friend, Steven Miyao - CEO and founder of kasina for an alternative point of view and for providing a perfect sounding board.

kasina is a trusted advisor to the leaders of the asset management and insurance industries. They are innovators in the distribution of Financial Services products through consulting, research, and benchmarking data.

My research continues. Check back soon.

The History of the Corporation, Volume 1 by Bruce Brown
p. 40 of The Lincoln Encyclopedia, by Archer H. Shaw (Macmillan, 1950, NY). That traces the quote's lineage to p. 954 of Abraham Lincoln: A New Portrait, (Vol. 2) by Emanuel Hertz (Horace Liveright Inc, 1931, NY).
1. Jane Anne Morris “Fixing Corporations: The Legacy of the Founding Parents” at
2 .Unequal Protection: The Early Role of Corporations in America by: Thom Hartmann, Berrett-Koehler Publishers | Serialized Book
3. Excerpted from Culture Jam: The Uncooling of America (Kalle Lasn,William Morrow/Eaglebrook, 1999)
4. Rick Crawford, letter from Lincoln to (Col.) William F. Elkins, Nov. 21, 1864.

5. Nicholas Confessore, New York Times - Policy-Making Billionaires Published: November 26, 2011
6. Ross L Muir and Carl J. White, Over the Long Term... the Story of J. & W. Seligman & Co. 1964

Saturday, February 2, 2013

What's in your Collection?

If you do not have an inventory of bonds and shares... 
...maybe it's time.

It has occurred to me, as perhaps many other collectors that in the distant future someone else will be making decisions about the disposition of your life's work as a collector. Considering the time, money and hours of effort invested, there are several things you can do now while you are still enjoying the view of earth that could save months of confusion and financial loss for people you genuinely care for.

So where to begin... Organize!

Take a hard look at the overall condition of your entire collection (not just your favorites) and assess the way you have decided, or maybe not decided, to store the certificates. Remember we are in a "NO JUDGING" zone so be honest with yourself.

Are your certificates neatly tucked away in black folders with acid free paper with labels based on what is contained in the book stacked neatly on a shelf; or are the materials scattered all over the apartment, and you are running out of places to put your other belongings because your broken down boxes are taking over without rhyme or reason? If you find the second description more like your real life, go out today to the nearest discount store and buy enough storage tubs to hold your entire collection.

Now take your time and rediscover your collection.

Start with your most favorite items or just a random box, relax and rediscover your collection and get inspired. Again, take your time, you might be amazed what you find. I was recently reviewing some old ephemera in a beat-up cardboard box I have owned for years and unearthed a fairly rare Scott# RN-C15 printed revenue stamp. After speaking with Robert (Bob) Hohertz, President of The American Revenue Association, an expert in United States One and Two-Cent Revenue Stamped Paper, he believes this to be only the second known used copy ever found. I will undoubtedly find a willing buyer because Printed Revenues are not in my theme of collecting
German Hospital & Dispensary of the City of New York 1871 Scott# RN-C15
The receipt has an orange stamp with Washington in the center looking left and a very ornate blue vignette of a lady providing a drink to an eagle with a waving American flag on her right and a ship in the distance to her left. Funny as I have owned this for many years and been through that box many times and just missed it until now.

Create an Inventory.

While perusing the boxes now neatly or not so neatly contained, it is time to start the documentation process intended to create an comprehensive inventory of the contents of your stocks and bonds. This step towards a permanent record of your holdings is by far, the most daunting. A best practice is when you add a new certificate or learn something important about the company is to keep track of when you purchased it, where you found it and how much it cost you. One dealer I spoke with only cares about the price as 5, 10, 20 dollar items for tax purposes. That is not the intent of what I am describing here. It is easiest to start with your favorite or most "valuable" pieces and get a small group added to the inventory compiled the way you like it. For me, I have favorite items from very expensive to just 20 dollars as the catalog value does not alone determine favorites.

I have created a spreadsheet and included the following information:

  • Company Name
  • Certificate Date
  • Stock or Bond
  • Purchase Date
  • Purchase Amount
  • Purchase Location
  • Retail Value Low/High
  • Retail Value Source
  • Cox Reference Code
  • Cox Scarcity Code
  • Image of certificate
  • Notes
I have tried several times to get more fancy and discovered there are easier ways to move from Excel to a database in the cloud with a very cheap price per month. Look for my next article about my migration of the certificate inventory into the Cloud. So now you have the framework of the inventory, add fields that make sense to you.

Value the collection.

The next step in the process is to assign a reasonable value to your collection of certificates. Terry Cox has written extensively on this topic and should be required reading for all levels of collectors because someday you will need to understand the pricing and selling processes or at least know how much to insure the collection with an insurance rider.

Practically speaking there will be some very big gaps in your memory about how much you paid for some items when they were added to your collection; Not the prize possessions, those you can even remember the circumstances surrounding the events of the acquisition. To determine value where there are not public records with current sales, look for items similar and adjust the value up or down based on desirability and condition. When analyzing current sales, one preferred method is to find high and low values on the Internet and eliminating what Terry Cox refers to as "pricing oddities" which occur when people that have more cash than sense drastically overpay for a certificate that will be for sale again but they would prefer not to wait. Although Terry refers to many variables involved in estimating values, I believe one that does not play a part in the calculation is the amount of time the certificate has been in your possession. The marketplace value it places on the common or even the moderately rare stocks and bonds does not concern itself with the amount of time at rest  with you. Perhaps an exception might be items that only make it to the marketplace every 10 or 20 years or so to be considered really rare.

One last thought regarding catalog pricing is that they are usually outdated and only can provide guidance, and then only if there is a large enough sample to draw a statistically significant sample.  

For the items that have never been sold or have not been sold for over 20 years, price cannot reasonably be assigned, as buyers have not had a chance to set the threshold of their willingness to pay. The goal here is to assign value with the understanding that you could be way off. A whole different topic could be written on pricing unique items but we can agree that there are always comparisons to other certificates similar in nature and elements to your unique item.Here is an item from my collection that I have not seen before but could determine its value as a range based on other stocks I have seen that have sold. Remember to look for sold items and not the ones you see for sale.

The Beaver Brook Slate Company, Warren New Jersey - 1875 Serial #1

Next step, make a copy of your inventory.

Keeping an extra copy is just a good idea because inevitably something will happen to your original list and it is far easier to keep a flash drive in your desk and making a copy every so often than starting from scratch after a sting of expletives. I have seen some solutions that can be easily accessed in the cloud for a reasonable price per month and that might be another good use as a backup.

Consult the Experts

Remember that our small community of Scripophily is a great source to help answer some of those questions that only experience and exposure to thousands of certificates can understand. I have dealt with many of the Scripophily dealers that attend the show in Virginia and in many cases they provided me information that I did not have when I started speaking with them. Their generosity sharing experiences and insight is greatly appreciated.

One interesting aspect that I learned from the dealers last year is that after 20 years collecting, these guys have seen pretty much everything that has ever been for sale at one time or another. So as Terry mentions in his article listed above, don't call a certificate rare unless you are absolutely sure and if you think you have one, ask.

12th Annual National Stock Certificate & Bond  Show

Work has made it impossible for me to exhibit at the 12th Annual National Stock Certificate & Bond  Show,  January 25-26, 2013 at the Crowne Plaza Hotel -Dulles Airport, located at 2200 Centreville Rd., Herndon, VA 20170. I did have the chance to attend late Friday and Saturday. It is a great show with experts from around the globe talking about our hobby. Here is the link to get more information: if you have an interest in attending next year's show scheduled for January 25 and 26, 2014.

If you like my posts, let me know or if you have an old certificate that you would like me to research. Please send me an email to with the name of the company, date issued and condition. Ideally, if you have a scan that would be best. I recently provided a background and estimate for the Finnish Co-Operative Trading Association Inc. from Brooklyn that was a co-op bakery issued in 1921 from New York. Jon who sent it to me found it among his old family files as his family was part of the co-op. What a great part of a family history.