Sooner or later, you will encounter certificates that look like they were officially issued, but are missing one or more signatures.

I receive many inquiries asking whether such certificates are issued or not.

How can you tell whether a certificate was truly issued?

It is sometimes very hard to know. However, we can make some general assumptions:

And then, depending on the historical period during which certificates were issued:

(For more discussion, see How can you tell if a certificate was issued or not?)

Most certificates from the early- to mid-1870s show revenue stamps. If the stamps were initialled or dated, you have a fairly reliable indication of issuance. Revenue stamps only appeared for a short period, so they cannot be used for the vast majority of certificates.

Twentieth century certificates usually show signatures of trust company clerks. This is a substantially reliable method of telling whether certificates were issued.

The majority of officially-issued certificates were cancelled in some manner (holes, cuts, rubber stamps, ink pens, etc). Cancellation by itself, however, does not prove certificates were issued. In order to prevent fraud, many "remainders" (unissued certificates left over in a book of certificates) were also cancelled.

Many stock certificates were pasted onto stubs when they were sold and transferred. This allowed companies to know exactly how many outstanding certificates were unaccounted for. If a certificate otherwise looks issued, and is glued to a stub, you have nearly reliable proof of issuance.

(Stubs may have been removed to improve appearance, but you can almost always tell by the remaining glue stain.)

Let's summarize with an attempt at a general rule:

Let me stress that there are exceptions to every rule. There are no 100% reliable rules. Some company somewhere broke every rule you can imagine. Some certificates escaped cancellation. Some never had corporate seals. Some are signed only by one officer. And so forth.

Stock certificates were always intended to be sold and transferred between owners. Theoretically, certificates should have been cancelled when transferred.

However, there are thousands of certificates that were officially transferred, but escaped cancellation. In such instances, you will often be able to find signatures on the back. This gives us is another fairly reliable rule:

What if certificates look issued (impressed seals, and completely filled out), but lack one signature?

There are a small number of officially-issued certificates that show single problems. However, I do not recall ever having seen certificates with two problems that I felt were officially issued. Consequently, I suggest:

What would cause missing signatures?

With over 25,000 railroad companies known so far, the possibilities are staggering. Let's examine what could happen.

The vast majority of railroad companies did not last long. Therefore, most stock sales were concentrated within the first few months of most companies' existences.

This means that most stock certificates were probably issued at times when operating controls were the least stringent. I do not have any proof, but I feel that most certificates missing signatures tend to show low serial numbers.

I also suspect (again with no hard proof) that most certificates with missing signatures correspond with periods of high company stress. Periods of high stress could coincide with bankruptcy and reorganization. Except for companies that were sold or leased soon after incorporation, every company went through periods of stress.

Times that would strain corporate controls would correspond with bank failures, financial panics, and stock runs. It was common during the 19th century to have huge stock sell-offs driven by rumor and innuendo, only to have those same companies gobbled up by big stock operators such as Jay Gould, James Fisk, Daniel Drew, and J.P. Morgan.

Stock runs often had nothing to do with the market or the companies involved. Often, the perception of financial health was controlled by large brokerages. Periods of significant turnover of securities were perfect times for signature and issuance errors.

Let's not forget that many - maybe even most - stressful periods might be as prosaic as snow storms, heat waves, broken water pipes, fires, union strikes, the flu, missing the trolley, or the boss having a bad day.

What was the process of issuing stock certificates?

While they must exist, I do not recall having seen any missing signatures on 20th century certificates.

Looking further back, I have never found a single reference that precisely explained how certificates were issued in the 1800s. By simply examining the handwriting, though, we can see that several people, maybe even four or five, were always involved in issuing stock.

The majority of issued examples suggest that company presidents often signed many certificates at once. A large number of partially-issued examples suggest that company presidents usually signed stacks of certificates first, before any other details or signatures were added.

Treasurers' signatures may have come next. Again, numbers of unissued remainders suggest that treasurers' signatures often predated other details.

Handwriting similarities on many certificates suggests that treasurers sometimes filled in dates, owner's names, and numbers of shares. However, this is no hard and fast rule because a larger number of certificates show a third handwriting style probably attributable to lower-salary clerks. This third handwriting style is normally more precise and easier to read than treasurers' or presidents' signatures.

It appears that treasurers or clerks impressed corporate seals next. Corporate seals were important and carefully-guarded company tools. I suspect that treasurers made the seal impressions in most small and medium sized companies.

By the 20th century, and especially by the 1920s, stock sales and transferrance became a hugely burdensome task for successful companies. At about that time, it appears that stock issuance began shifting to trust companies. Certificates requiring hand signatures began disappearing and were replaced by certificates with pre-printed facsimile signatures.

Once trust companies became involved, the number of ambiguously-issued certificates dropped substantially. It is for this reason I suggest:

Were two signatures truly necessary?

This is a hard question to answer. There were over 25,000 railroad companies with over 25,000 different ways of doing business. Small companies probably took a more trusting approach to stock sales. With possibly fewer than 25 stockholders, precise application of signatures on stock certificates was unnecessary.

In a related manner, we need to remember that all but a miniscule handful of American companies issued "registered" stock. Company records of ownership always prevailed. Under the registration system of stock ownership, the ultimate protections against security forgery were company records.

What about missing signatures on bonds?

There are two reasons why the importance of signatures is vastly magnified for bonds.

First, the issuance of bonds involved very large amounts of money.

Second, most bonds issued prior to the 1890s were "bearer bonds." Anyone who owned bearer bonds could sell them, regardless of how they acquired them.

It is for these two reasons we see very, very few examples of signatures missing from issued bonds. Yes, some examples exist. However, it is my experience that:

In conclusion...

I want to make the point again that we can NEVER know the reason why certificates are missing signatures. But,