American Bank Note Archives Auction, part 6

Robert Schwartz and Archives International Auctions just issued their latest offering of bank notes and stocks and bonds from the American Bank Note Company Archives.

The latest catalog is another beautiful compilation with full color throughout. There are 2,034 lots to be autioned in New York on Friday and Saturday, October 22 and 23. As always with events like this, the intervening time will pass very quickly. Please make sure you get your catalog as soon as possible and make sure you get your bids in right away.

Like the last couple auctions, this sale focus heavily on worldwide bank notes. Nonetheless, railroading and mining stocks and bonds are very well represented.

I count 255 lots of rail-related stocks and bonds from the western hemisphere. (U.S. = 235, Canada = 8, Mexico = 11 and Haiti = 1). As expected, there are probably a 100, maybe 150, certificates that have never been reported before. The majority of the new certificates are specimens that are either unique or nearly so.

There are too many new certificates to try to pick out a few to discuss. Merely let me say that if you are a serious collector, you cannot help but find something you'll want.

I have no idea how many more sales of American Bank Note Company bank notes and certificates Schwartz has planned. But I am warning everyone that the supply is NOT bottomless. I count 12 MAJOR sales of material from the ABNCo archives since 1988, five of which are attributable to Robert Schwartz. On top of that, you can add another 15 sales of unique ABNCo printing plates that have appeared among Stacks' sales of coins and paper money. Twenty-two years of sales of collectibles from one company is hard to imagine, let alone grasp! When that supply is gone – and I don't know when that will be – prices for these unique items are only going to climb. Do not complain if you're priced out of the market in the future because you didn't participate today.

(Don't know what you've already missed? After you've ordered your catalog from Archives International, go to a special page on my web site showing all past sales of items from the ABNCo archives.)

You may order your catalog from Archives International Auctions via its web site. You may also talk to a live person at 201-567-1130. But please don't wait.

High-resolution railroad maps online

Back in 2002, I stumbled across a company called TheHistoryCD. Among gobs of other offerings, the company advertised offered a collection of high-resolution scanned images of vintage railroad maps. I quickly grabbed the four-CD set and found the images had originated with maps in the Library of Congress.

The images were organized by state and collected into four main regions. The maps were all pre-1900 vintage. Many dated from the 1850s with some going back to the 1830s. Three even dated from the 1820s!

As advertised, the images were indeed high-resolution. Due to the scanned resolutions, the images would have occupied huge amounts of storage space, probably in the range of eight or ten DVDs had the images been uncompressed. The 4-CD collection of images was made possible by compressing the images using a proprietary format called "MrSid." While a cute moniker, "MrSid" actually stands for "multiresolution seamless image database". The format is now used quite heavily in the mapping business to store massive images such as color air photographs.

The problem with the collection was that the CDs were non-indexed. It was impossible to locate a desired map without cumbersome trial and error. I imagine that most users such as myself would have wanted to locate specific rail lines and that task might have taken as much as a half-hour or more.

For my own purposes, I extracted all the images and discovered there were 279 separate maps. The maps were extremely valuable as historical references, just really hard to use. Even with those shortcomings, I have wanted to recommend the collection to my correspondents many times over the last eight years. Unfortunately, TheHistoryCD company disappeared. Try as I may, I was never able to locate any alternate source for the images.

Until a few weeks ago.

It turns out that all the images originally found on TheHistoryCD set, plus many, many more, are available on the Library of Congress web site. They are found on a sub-site of the library called American Memory in a special section dedicated to railroad maps.

As best I can tell, the library offers 613 maps, all viewable online for FREE. You can also download entire maps if desired. There is a genuine mother-lode of information here for railroad enthusiasts!!!

As always, there is a downside.

Indexing on the Library's site is immeasureably better that when the maps were available in TheHistoryCD collection. Nonetheless, indexing is still greatly wanting. Searching by Keyword can help. Sadly, the trial-and-error method of browsing by Geographic Location is still probably the most useful. For instance, my hometown in southern Indiana probably appears on 15 or 20 maps, but the Keyword search only finds two. Similarly, searching for company names can work sporadically, but the prevelence of railroad abbreviations precludes general usefulness. Moreover, even when a map is located with the desired feature, the web site offers no help in narrowing down where in a given state or region the feature may appear.

It would be great, great, great is some obsessed person would index the maps the way we'd all like. That would take years, so do not expect any improvement over time. Still, the maps are a tremendous benefit to railroad enthusiasts, especially to those with patience.

Where do new VARIETIES come from?

A few days ago, I wrote about where I acquire new information about railroad certificates. "New information" includes everything: new sales prices, new serial numbers, new varieties, new issuance conditions, new printers, etc. Out of all this new information, I imagine collectors consider the discovery of new varieties of certificates to be the most important.

It is probably not surprising that, over the last five years, major auction houses combined to contribute the most new varieties (34.6%). Until early 2008, the late R.M. Smythe company contributed the bulk of new varieties. Since that time, the majority of new varieties came from sales compiled and cataloged by Dr. Robert Schwartz (initially for H.R. Harmer and more recently for his own Archives International Auctions.)

Curiously, less than half of all new "auction house" varieties sold the first time they were offered. I suspect part of the reason can be traced to over-enthusiastic valuations by the houses. On the other hand, collectors tell me they are always a little jumpy when new certificates first appear. They don't know whether the certificates being offered are unique or merely the first appearances of thousands more to come.

Over the same time period, the collectors who correspond with me reported a nearly equal percentage of new varieties (32%). While they rarely tell me their sources, I suspect the majority of their certificates came from U.S. dealers. If true, collectors who didn't get in on all those new varieties really need to form closer relationships with dealers.

Granted, dealers don't always know when they have new varieties. Nonetheless, they always know when they encounter certificates they've never seen before. Dealers tend to sell new-found certificates very quickly to their best customers. Rarely do they ever need to offer such certificates in lists, catalogs and web sites. Collectors please take notice: worldwide, only four dealers routinely report their new discoveries to me. Consequently, dealers are greatly under-represented in my records as good sources of new varieties.

In case you're wondering, no, there is no double counting. I always attribute new discoveries to earliest appearances. If collectors get certificates from auctions, auction appearances prevail.

Now for the surprise — and I hope this wakes up advanced collectors!! The third largest source for new varieties was eBay. That oft-demeaned source contributed 22.1% of all new varieties over the last five years.

Yes, I've heard collectors argue for years that they're tired of eBay "junk." They complain that they see the same old certificates day-in, day-out.

That is true. But the opposite is equally true! My census clearly shows that eBay sellers sold an average of 4.3 "new" certificates per week. I stress that I do NOT count eBay items that don't sell, nor do I count items that sell for less than $25.

Please be aware that astute dealers frequently recycle "new" items they find on eBay. Many of those items ultimately end up in dealer inventories and auction house catalogs. I do not know the exact routes those certificates take, but when " tired old eBay junk" is ultimately re-packaged, you must assume that prices will be multiplied several times.

Now for the bad news.

The discovery rate for new varieties has definitely dropped over the last couple years, certainly made worse by the global economy. I expect the rate of discoveries of new varieties will continue to drop.

But let's be clear. In this week alone, I have already recorded five new varieties plus two certificates that have only appeared once in twenty years.

Please note that I only counted first appearances of new certificate varieties for this little exercise. I did not count minor new variations of issued, unissued, cancelled, uncancelled, specimens and proofs as new varieties.

	Items	Percent	Items	Percent
eBay auctions	1,125	22.1%
US auctions	1,608	31.5%
Euro auctions	160	3.1%
US dealer sites & catalogs	334	6.5%
Euro dealer sites & catalogs	19	0.4%
Other US	0	0.0%
Other Euro	11	0.2%
Total from discoveries			3,257	63.8%
US collectors	1,494	18.4%
Euro collectors	137	7.3%
US dealers	194	2.0%
Euro dealers	20	0.9%
Total from contributions			1,845	36.2%
			______	_____
Grand Total All Sources			5,102	100%

Where does new information come from?

As of this writing, my database contains 18,392 distinct varieties of railroad and railroad-related certificates from North America. In case you're counting, that is 4,260 more varieties than was included in the second edition of my catalog published in 2003.

Growing the database at this speed required contributions from interested collectors in addition to research into auction listings in the U.S. and Europe. 39,557 new sources of information were added to the database in the last five years counting all the various types of information such as serial numbers, prices, images, corrections, new companies, new varieties, new sub-varieties, etc.

28.5% of all new information came from contributions; the remainder came from personal discoveries. The lion's share of contributions come from collectors (90%) with the remainder from dealers (10%). Since most contributions include high-resolution images, contributions represent the most complete and valuable types of information I receive. I greatly appreciate every contribution and I try to respond as quickly as possible, even if it is only one certificate.

71.5% of my new sources of information come from auction catalogs, dealer web sites and, of course, eBay. Regardless of how much advanced collectors might like to downplay the role of eBay in the hobby, it has proven exceedingly important to me. In the last five years, one-third (!) of all my new information came from eBay. Unlike the information I glean from auctions and dealer sites, eBay information comes only from items that actually sold. I stress that I collect information only from sales that take place at $25 and above.

Information from professional auctions is valuable because those sales tend to focus on scarcer certificates. Unlike eBay sales, I record every identifiable certificate from auction catalogs. I record all prices regardless of whether certificates sold or not. Some auctions are very valuable for helping discover new varieties. R.M. Smythe's sales used to play a leading role in introducing new certificates to the hobby. There is widespread hope that SpinkSmythe will resume making similar contributions in the coming years. Thankfully, Dr. Robert Schwartz's sales (at Harmer and recently via Archives International) have filled a major part of the void left by R.M. Smythe and they have added vast numbers of new certificates in the last few years.

	Items	Percent	Items	Percent
eBay auctions	13,167	33.3%
US auctions	6.633	16.8%
Euro auctions	6,302	15.9%
US dealer sites & catalogs	2,054	5.2%
Euro dealer sites & catalogs	75	0.2%
Other US	22	0.1%
Other Euro	11	<0.1%
Total from discoveries			28,264	71.5%
US collectors	7,267	18.4%
Euro collectors	2,903	7.3%
US dealers	779	2.0%
Euro dealers	344	0.9%
Total from contributions			11,293	28.5%
			______	_____
Grand Total All Sources			39,557	100%

Information from dealer catalogs and web sites is somewhat problematic. Some items stay in place for years and we never know why. Items may be properly priced for their clientele and the dealers may have several copies for sale. Or items may be over-priced and not selling at all. Moreover, when inventory sells, we never know how much discount the dealers may have offered. In other words, all prices we see in dealers' web sites and catalogs are merely suggested prices and consequently of less value than those communicated by auctions and collectors.

In a few days, I will add another article similar to this one which will analyze where new varieties have come from in the last five years. I think you'll be a little surprised.

Boone sale 45 in mid-September

Mario Boone’s sale catalog #45 just arrived this morning. As we’ve come to expect, Mario’s catalogs and selections keep improving. This particular sale, slated for September 18 and 19, offers 1884 international lots covering every major business type.

Railroading is, as usual, well-represented. I count 96 lots dedicated to railroads in my specialty area of North America. Most everything I see from the U.S. is medium scarce. In other words, I don’t see anything particularly rare nor particularly common. While I cannot comment on non-railroad certificates, Mario’s price estimates for North American railroad certificates seem to reflect the reality of today’s market conditions. Consequently, I expect Boone’s sale will experience higher than normal sale rates.

Going through the catalog to write this blog article, I found two items that caught my eye. The first is the unissued red and black $50 bond of The People’s Railway Company of America (lot 1673). This company was dismissed in the early 1880s as fraudulent, but that would never have prevented stock or bond sales. Nonetheless, no issued examples have ever been reported and these borderline-rare items are known only in unissued form.

Another interesting item is an issued certificate (lot 1703) from the Del Norte & Humboldt Railroad Company. The design of the certificate for this California company is somewhat plain, but is clean, well-preserved and one of only five issued examples reported to me so far. I currently estimate fewer than ten examples exist. Mario’s €150 estimate is well below the $569 highest price recorded.

You may contact Mario Boone and his Scripophily Center at www.booneshares.com or call him at 0032-(0)9.386.90.91 to receive a copy of the catalog for the 45th Auction and Bourse to be held at the Crowne Plaza in Antwerp, Belgium.

Cox prices and the bell curve

Of all the things I might be, a statistician is not one of them. Don’t expect an academic lecture on the subject from me.

Many readers expect my catalog prices should somehow predict the middle of a theoretical “bell curve.” They assume that when certificates are offered for sale, some will sell for more than my estimates and some will sell for less but they expect my price estimates to be about “average.”

In practice, readers usually notice my prices are usually higher or lower than the prices they are used to. Why is that?

I view the market as terribly thin. There are very few certificates to go around and items come up for sale very infrequently. No matter how much collectors might be willing to pay, they cannot possibly go out and buy everything they want. They MUST wait. Many certificates appear for sale only once every ten to twenty years! It is pretty hard to construct a nice bell curve distribution to explain that kind of market.

In my opinion, I see no justification for predicting a single bell curve of certificate prices simply because I see no single market. Instead, I see several very distinct markets, each with its own corresponding price curve. Collectors rarely participate in more than a few markets and many do not realize that certificates sell for wildly different prices elsewhere.

The diagram above shows what I mean.

Advanced and intermediate collectors are well aware that eBay prices are absurdly low compared to the rest of the collectible certificate market. Typically, my catalog price estimates are 1.5 to 2 times higher than typical eBay prices. At the same time, my estimates are often half or less of European dealers’ catalog prices. In general, my prices tend to be somewhere in the ranges of prices offered by major American dealers.

Full-fledged American auction houses usually realize higher prices than eBay. Price differences between eBay and major houses depend very much on the types of certificates being sold. Rare certificates perform much better in formal auction houses, but common material often does better on eBay. My diagram shows the typical price overlap.

European auctions tend to sell low percentages of items compared to American auctions, but the disadvantage is offset with higher prices. Major dealers, regardless of whether they are North American or European, buy much of their inventory from auctions. Consequently, dealers catalog prices exceed prices realized in auctions.

I try to estimate certificate prices at levels that average collectors might expect to pay if they want to fill their collections moderately quickly . If they are very patient, collectors can often wait for appearances on eBay and potentially save bunches of money. Conversely, if collectors want specific certificates very quickly, they may need to pay very high prices, possibly from European suppliers.

Spink Smythe auction 302

The latest Spink Smythe stock and bond auction catalog arrived today. The sale will take place in Dallas on June 29, but lots may be viewed at the Memphis show on June 18, 19 and 20.

This sale is most welcomed and I hope collectors respond favorably. There are approximately 868 lots comprising probably a couple thousand certificates, all from the Americas. Contact Spink Smythe immediately at 800-556-7826 if you have not yet received your 88-page catalog.

As expected, offerings from railroad companies (178 lots), mining companies (155 lots) and automobile companies (90 lots) make up the bulk of the sale. Spink Smythe has improved its indexing which makes finding desireable certificates easier.

Less than half the offered lots are shown in the catalog, but all catalog images are in high-quality color. Additional single-item lots are shown online at http://www.spinksmythe.com, but still not all.

For price guidance, Spink Smythe has changed from a "price-range estimate" (eg. $125-250) to a "single-price estimate" (eg. $175). I personally think this is a better approach for the company. Having recorded thousands upon thousands of prices from NASCA, Smythe and Spink Smythe, I am convinced that the majority of bidders always interpreted the low estimate as the lowest acceptable bid. That was not true, of course, but prices realized still tended to cluster around the low estimate. It will be interesting to see how prices will behave with this sale.

In recent auctions, Spink Smythe continued the Smythe tradition of establishing its minimum acceptable bid at 60% of the lowest bid estimate. This time, the introductory letter by Mike Veissid and Jim Fitzgerald states that collectors can bid any amount they feel appropriate. I have always been comfortable bidding that way but no everybody is. It leaves the door wide open for the company to decide whether bids are made in good faith or not. I hope the experiment results in higher sales percentages like those from the early 1990s. On the other hand, I can imagine bidders heavily trained by absurdly low eBay prices might be scared away by the uncertainy.

I never enter auction lots into my database until after sales close, so I don't have precise counts. It looks to me that there are 178 lots related to railroading, counting US certificates, autographed certificates and related certificates from Panama, Mexico and Canada. Of that number, 137 lots are single-item lots and 41 lots are multi-item lots. I always advise multi-item for collectors who are also part-time sellers.

Spink Smythe's buyers' commission is 20% for the first $2000 PER LOT and 15% thereafter. With rare exception, the days of 10% commissions are gone, simply because sales percentages are so low and production costs so high. Always be sure to factor in the costs of commissions and shipping when calculating your bids. Do not wait until your invoice arrives before thinking about those added costs.