The Language of Scripophily: A Glossary
Understanding Vintage Stock and Bond Certificates
by Don Mesler
American Depository Receipt: Documentation evidencing ownership of shares of foreign corporations that have been placed in custody at a bank and reissued in a form that can trade in domestic securities markets. Usually called "ADRs." ADRs are negotiable securities and certificates are issued that are similar to stock and bond certificates.
assessable stock: A stock with the provision that existing shareholders are required, if and when asked, to supply additional to the corporation.
banknote printer: A printer specializing in the design, engraving, and production of financial instruments including currency and stock certificates.
bearer security: A security not identified in the corporation's books and records as belonging to a specific owner. Possession is assumed to signify rightful ownership.
bond: A corporate IOU. A bond is a debt instrument with a maturity at issuance exceeding seven years.
cancelled: Securities that have been voided and stripped of intrinsic value. Cancellation occurs when ownership is transferred, when one issue is substituted for another, or when a bond matures. Although "cancelled" is the spelling used within the securities industry, using a dictionary will indicate that the correct spelling is "canceled."
cartouche: An ornate information-bearing emblem, frequently a revenue stamp, appearing as an underprint on the body of a certificate.
certificate: The legal document evidencing ownership of a debt or equity position.
chipping: The loss of small pieces of a brittle document around the edges due to improper storage and handling.
convertible: A type of bond or preferred stock that can be converted into common stock (usually that of the issuer) at the holder's option. Convertibles are negotiable securities and certificates are issued that are similar to stock and bond certificates.
coupon: The interest that the borrower must pay to the lender usually expressed as a percentage of the par value of the debt instrument. The term also refers to small detachable claims attached to some bond certificates which entitle the bearer to the stated semi-annual interest when submitted on or after the stated payment date.
debenture: A corporate IOU. It is debt unsecured by any collateral and thus is junior to other debt securities of the same issuer. See also "bond" and "note."
edge splits: Separation of paper along a fold, generally appearing first at the edge and advancing inwards. It is caused by repeated folding and unfolding.
foxing: Paper discoloration accompanied by reddish-brown spots.
generic certificate: A ready-to-use certificate design lacking only the company nane and a few other facts specific to an issue for that specific company. The template approach permitted rapid deployment of a new stock issue at low cost.
hoard: A large group of certificates, often previously unknown or at least with details unavailable, released often suddenly and without warning into the collectibes marketplace.
intaglio: (pronounced in-tal'yo) A printing technique wherein the ink transferred to the paper comes from the grooves (low points) of the engraved plate. The resulting image has a three dimensional appearance as well as exceptional quality and clarity.
imprinted revenue stamp: A revenue stamp included in the certificate's design and printed along with the other details in the original press run.
issued: Certificates that were used; that is, disseminated to investors evidencing ownership of the specified asset.
non-assessable stock: A shareholder right, printed on the stock certificate, preventing the corporation from requiring the shareholder to contribute additional capital.
note: A corporate IOU. A note is a debt instrument with a maturity of seven years or less.
odd lot: A common stock position consisting of less than 100 shares.
paper: Wall Street's affectionate moniker for securities in general.
par: The value of a security at its final redemption date. This is generally $1000 for bonds and $25, $50, or $100 for preferred stocks.
preferred stock: Another form of the equity portion of the capitalization of a corporate entity. Preferred stock has a fixed dividend, expressed either as a percent of par or as a dollar amount.
recto: The front of a certificate.
registered: Assigned to a specific owner (individual, institution, corporation, etc.) and so carried on the books of the corporation or its agent.
revenue stamps: Stamps, similar in size and appearance to regular postage stamps, affixed to stock certificates to indicate payment of a special tax imposed on financial transactions during the Civil War. Revenue stamps are a collectible in their own right.
round lot: A common stock position of 100 shares (the basic unit of trading) or any multiple of 100 shares.
scripophily: The hobby that includes the collecting, trading, and investing in old business financial documents.
specimen: A sample or prototype certificate produced by an engraving company to show the actual execution of a proposed design. It may be used as a sales piece to win the printing contract for the certificates that are ultimately issued.
stock: The equity portion of the capitalization of a corporate entity. It represents a share in the earnings and assets of the corporation.
subordinated: Terms of a security indicating that, in the event of financial distress, principal and interest are paid only after claims of other security holders are settled.
toning: The gradual yellowing or browning of paper with age. It is caused by ultraviolet light, oxygen or pollutants in the air, or chemicals used in the paper making process.
underprint: An information bearing emblem, generally a revenue stamp or a share par value amount, preprinted (commonly in color) on the certificate before the main body of that certificate is printed
unissued: Certificates printed and intended for immediate or future distribution but, for a variety of reasons, never placed in circulation.
unregistered: Securities issued without specific ownership indicated.
vignette: The engraved picture or design appearing on stock and bond certificates.
verso: The back of a certificate.
warrant: An option granting the right to purchase common stock (usually that of the issuer) on terms specified. Warrants are negotiable securities and certificates are issued that are similar to stock and bond certificates.