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"Scrip" means different things to collectors in different hobbies. The paper money hobby recognizes scrip as unofficial money. The stock and bond hobby also recognizes scrip as unofficial money, but also describes several additional kinds of collectibles as "scrip."
"Scrip" can be confusing because the term meant had variable meaning among companies. I include scrip in my project IF AND ONLY IF the scrip makes direct and legitimate reference to stocks and bonds.
(Some scrip was purposely designed to deceive. I do NOT include those kinds of items in my project because they do not involve legitimate stocks or bonds. More about those items later in this page.)
Scrip commonly falls into five categories:
Obsolete currency causes the greatest confusion.
I receive large numbers of inquiries concerning paper money issued by railroads. Railroad currency circulated in place of legal tender in circumstances and places where legal tender was not available.
Here is a good rule of thumb.
While I enjoy railroad currency, ALL paper money is beyond the scope of this project.
Obsolete currency from the Philadelphia Newtown & New York Railroad Co. Items like this are cataloged by the paper money hobby and are therefore beyond the scope of my project specialty about stocks and bonds.
Most obsolete currency was printed before 1863. Railroad companies often printed certificates to resemble currency so they would circulate among the general public. While railroad currency (officially scrip) may have eased the demand for legal tender, its main purpose was to attract hard-to-find cash to railroad companies. Railroad companies often purposely and deceptively worded their currency to imply ownership similar to bonds. Some currency even promised to pay interest upon redemption within 6 months to two years.
I do not include obsolete railroad currency in my catalog for these reasons:
Railroad "Bond" currency. Here are examples of railroad currency that cause the most confusion. No matter how someone tries to stretch the definition, I do not believe these kinds of items constituted true "bonds."
Obsolete currency from The Scioto & Hocking Valley Railroad Co. and the Columbus & Lake Erie Railroad. I DO NOT and will not catalog items like this.
Were these items really bonds?
Regardless of labeling, I call these documents "currency." I have never discovered evidence that has convinced me that these items were true bonds.
Bonds are binding agreements between parties. One party (the investor) agrees to loan money to the other. In return, the second party (the company) promises to repay the initial investment and to pay interest for the use of investors' money. True bonds display specific contractual obligations between companies and investors. The text on bonds explains what happens when companies fail to meet their obligations.
I have never seen railroad currency explain what would have happened if companies defaulted. I have never seen anything that remotely implied a contractural relationship between companies and bearers.
The logic seems clear to me. If documents do not clearly and explicitly explain the nature of agreements and what will happen in the event of default, no binding agreement exists. If there are no binding agreements, then such documents cannot possibly be construed as "bonds," regardless of how they might be labeled.
I contend notes like these were simply "promissory notes". They all promised to repay. No argument there.
However, what was supposed to happen if companies failed to meet their promises? Nothing! I have never seen any currency issued by railroads that pledged collateral in case of default.
Please understand that our disagreements over nomenclature have nothing to do with collectible values. Our disagreements merely affect the kinds of documents that I describe and include in my project and which I must reject.
Railroad currency is highly collectible.
See this list of recognized references to obsolete currency. Remember, always buy the book before the collectible.
I fully understand that some collectors still think I SHOULD include railroad currency in my stock and bond project
For them I offer a more detailed discussion HERE.
I strongly recommend buying the Cox Catalog from your favorite
If they do not yet carry, or are out of stock, you may buy directly from the author.
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