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One of 50 coupons from an 1909 Erie &
Union Railroad Co bond.
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Personal opinion!
Since sometime in 2004, correspondents from around the world have alerted
me to online sales where people are attempting to sell individual coupons
from railroad bonds as collectibles.
(Notice I said "collectibles." If you are wondering whether a coupon retains value as a security, move to the bottom of this page.) |
It appears that people are destroying perfectly good coupon bonds
in an attempt to get money from unsuspecting beginners.
I think that is very, very bad for the collectibles hobby. I think we should do everything we can to
discourage coupon-chopping.
Here's the maneuver. Take ordinary coupon bonds that still have
coupons attached. Remove the coupons, and sell coupons individually
for one or two dollars. In this manner, ordinary bonds, worth $10
to $50, can be made to produce a couple hundred dollars profit.
Never mind that these people lower or unwittingly destroy the value of original certificates!
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Sheet of 40 coupons
still attached to a 1902
Pueblo & Suburban Traction & Lighting Co. bond.
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I get many inquiries about coupons. Most inquiries seem
to come from people unfamiliar with the stock and bond hobby. Almost
all think these coupons are "bonds."
It really hurts me to be tell them that individual coupons probably have limited, if any value as collectibles.
Now admittedly, some coupons might have value to more advanced
collectors IF they came from bonds that are no longer in existence.
In twenty years of tracking stock and bond prices, however, not a single experienced collector has reported to me that
they have ever bought individual coupons or consider them to have value. Even though I have asked, not a single major dealer tells me they think individual coupons have collectible value.
My deepest concern is that beginners are going to feel stung by
such practices. They are going to blame the hobby.
But it is not the hobby!
Let's face it. There are too many opportunities to help beginners
get off to good starts. Every experienced collector and every experienced dealer is willing to help.
If YOU have ever bought (or are considering buying) coupons, please
consider the purchase a low entry fee for actually discovering the great
hobby of collecting genuine, historic stocks and bonds.
I feel very, very strongly that this is a terrific hobby with genuinely scarce certificates still available at great prices. Before you buy more coupons, I beg you to explore the hobby and decide for yourself whether spending more money on coupons is in your best interest.
Also, please visit
the many wonderful dealers I list at:
http://www.coxrail.com/links-dealers.htm.
What if you think your coupon retains value as a security?
It is possible that some uncancelled coupons retain security value. Unfortunately, I cannot help you.
Under no circumstances will I advise whether stocks, bonds, coupons, or related documents have security value.
I prefer that you check with experts who make it their business to research antique and extinct securities. It is a specialized field and they charge for their services. Please see this page for more info.
http://www.coxrail.com/SecurityValues.htm
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