November 29, 2010

Hucksterism in our hobby

Who would you rather buy from? A huckster? Or someone who treats you as something more than a brain stem? Speaking for myself, I try to avoid buying from hucksters when I can. I prefer buying from reputable sellers who don’t shout at me from the tops of their lungs.

And hucksters love to shout. They love words like “** WOW **” and “L@@K” because they grab attention. Never mind that they say absolutely nothing.

Regardless of their methods for attracting attention, hucksters are predisposed to overstate and oversell. When they do that, they unwittingly get themselves into trouble. Hucksters may understand selling techniques, but they never seem to understand collectors. They simply do not realize that collectors spend tremendous effort in studying the nuances of their hobbies. I am absolutely convinced that when they under-estimate their market and over-sell their products, hucksters sell less than they could by more forthright methods.

In our hobby, hucksters tend to focus their over-selling and over-valuation in four key areas:

1) Rarity. “RARE” is the promotional king of all buzz words concern collectibles. It is our hobby’s most over-used term. Isn’t it odd that some hucksters sell nothing but rare certificates? Isn’t it odd that they offer inexhaustible supplies of rare certificates and yet manage to sell them for such meager amounts? Shouldn’t rare certificates sell for more than ten or twenty dollars?

2) Autographs. The second most popular way of overselling certificates to promote autographs from unknown and unimportant people. Just because people were elected to political offices or promoted to elevated military ranks means nothing if those people did not leave lasting effects on a nation, a state or an industry. Let’s face numerical facts: there is a good reason why only a miniscule percentage of autographs are valuable. Over 2,500 men achieved the rank of “general” in the Civil War. Over 2,300 people have served as governors of states and territories. Thousands have served in the United States Senate and House of Representatives and fifty (!) times as many have served in similar capacities in state legislatures. How many tens of thousands of people have served in high appointed positions and as corporate executives? Hucksters want their targets to overlook the obvious question: “How can all those people be celebrities?”

3) Low serial numbers. eBay sellers frequently promote certificates with “low” serial numbers, without any knowledge of what “low” means. They never seem to care that the lowest serial number for some varieties might be 5000 or that the serial number they are promoting may, in fact, represent the highest number ever recorded for that variety. Over-promoting low serial numbers ignores a confirmed reality: European collectors seldom pay premiums for serial numbers higher than #3. U.S. collectors often refuse to pay premiums even for #1 certificates.

4) Historical significance. I once saw an eBay seller compile a 4000-word dissertation about a railroad company whose certificates seldom sell for more than $20. He was obviously trying to convince buyers that his certificates were more valuable because the company was so important. Did he not realize that there is almost no relationship between historical significance and certificate values? Sometimes, low-issue certificates from barely-known companies are more valuable than those from important companies of great longevity. Sometimes the inverse is true.

Don’t get me wrong. I am not equating advertising with hucksterism. Our hobby needs and in fact depends on truthful advertising. Hucksterism, on the other hand, embraces exaggeration and over-statement and sometimes treads dangerously close to deception. Hucksters will always be part of the landscape when buying and selling collectibles. They are not going away. However, I am unconvinced that it is necessary to resort to hucksterism in order to sell certificates.

October 26, 2010's 2011 calendar available

The 2011 stock and bond calendar from is newly published and available.

As I mentioned last year, I applaud Bob Kerstein for preparing and printing his calendar far in advance of the new year. I enjoy the fact that Bob's calendars always include December of the current year so they can go up on the wall almost immediately.

Each month features a high-quality image of a stock or bond from a significant corporation. This year's rail industry contribution represents a scarce certificate from the Gagnier-Griffin Suspended Railway Bridge Company. The particular certificate illustrated was issued to Dr. G. H. Griffin, the company's co-founder and president, two months after incorporation. The company had promoted its concepts as early as 1892, but apparently did not incorporate until March, 1894. Before the end of the year, it had already built one system spanning the Tennessee River near Knoxville and the 1894 edition of the Street Railway Journal announced the company intended to span Niagara Falls. The novel bridge design was intended to convey single rail cars across rivers on suspended cables but had many other possible applications. 

Bob has compiled images of this scarce certificate and all other calendar pages in an Acrobat file that you can either view or download. Please contact for your copy of the 2011 calendar. Single copies are available for $9.95 each. (Quantity pricing available.)

October 18, 2010

William Henry Vanderbilt article

I occasionally stumble across articles that might be of interest to my readers. This article appeared in The Daily Graphic published Monday evening, March 10, 1873 and accompanied its large cover page illustration that measured over eight inches high. I reproduce it here exactly as it appeared on page 3 of this short-lived daily newspaper. As typical of the era, the entire article was one long paragraph.

Personal Sketch

Mr. William H. Vanderbilt, whose portrait is given in to-day's issue, is the eldest son of Commodore Vanderbilt, and a shrewd, enterprising scion of a shrewd, enterprising house. Though born in the financial purple, he declined becoming a mere pensioner on his father’s reputation, and at an early age plunged into active business life. He was born, in 1821, at New Brunswick, N.J., the summer residence at that time of his father, and after receiving a sound practical education at the Columbia College Grammar School, entered in his eighteenth year, the financial house of Drew, Robinson & Co., where he exhibited so great executive abilities that, after two years of steady application and eminently successful operations, he was offered a partnership. Finding, however, that from rapid growth and close confinement, his health was being undermined, he determined to recuperate by farming, and set earnestly to work to clear seventy-five acres on Staten Island. Carrying the same energy into his agricultural pursuits, he soon had 350 acres under cultivation. At this time the Staten Island Railroad Company was in an embarrassed condition, but as soon as Mr. Vanderbilt and his uncle, Jacob Vanderbilt, ame into its management it improved rapidly. This experience gave him a taste for the railroad business, and having been elected in 1864 Vice-President of the New York and Harlem, and in 1865 of the Hudson River, he devoted his whole time and attention to their development, and proved himself worthy of becoming the executive and confidant of the Commodore. The Harlem, which was bankrupt when he became Vice-President, is now one of the best equipped roads in the country, and the Hudson River under his management, has trebled in value. The Commodore, having secured a controlling interest in New York Central in 1869, consolidated the Central with the Hudson River R. R., and now this magnificent organization, with 700 miles of track, a business of $25,000,000 per annum, and a capitalized value on $90,000,000, is under the management of Mr. William H. Vanderbilt, its Vice-President. He is engaged at present in making a thorough financial success of Western Union, and since the Vanderbilt party took hold of it two years ago, it has advanced fifty-five per cent. Lately much of his attention has been directed to the passage of a scheme through the Legislature to connect his different roads with the commercial centres of the metropolis by the proposed rapid transit plan. He was married in 1841 to Miss Kissam, and the eldest of their eight children, Cornelius Vanderbilt, Jr., holds the position of Treasurer of the Harlem. Mr. Vanderbilt yet remains practically, as well as theoretically, a farmer, and his knowledge of agriculture had been very serviceable in determining routes for roads and matters connected with the transportation of grain. Hale, bluff, and in the enjoyment of excellent health, he possesses a cheerful disposition, and though punctual and exacting in business is very considerate and liberal in charities. Having made several visits to the Old World, his mansion is filled with mementoes of his travels. Many valuable paintings of the old masters are hung side by side with those of native production, Mr. Vanderbilt being a liberal patron of American art.

October 10, 2010

Cox "Market Basket" price index updated

I recently updated my price index for collectible railroad certificates. Prices continue to slide, although the rate of decline has not worsened with the typical summer doldrums. Prices only dropped about a percent since April and I choose to take that as a good sign.

My price index is based on a "market basket" of 43 certificate varieties. You may read a long-winded description of the index on my special Price Index page. You may also see images of all certificates included in the index.

In short, the price index is a total value of what you could expect to pay if you bought all 43 varieties of certificates at prices averaged over the five most recent sales. These kinds of averages are called "5-sale moving averages." They are calculated by taking the last actual sale price, no matter where that sale occurred, and averaging it with the previous four sales. Each time a new sale occurs, it becomes part of the average and the oldest sale is dropped.

Certificate prices tend to be VERY "spikey". I commonly record a $50 price in one sale followed by $125 in the next, $35 in the next and so forth. Moving averages help smooth out big ups and downs so we can see underlying trends without getting confused by the "noise." I would like to use more sales and more varieties in the calculations, but there are simply too few sales. We have to play the hand we're dealt.

As I have mentioned elsewhere, the price index shows that prices were essentially flat from 1999 through 2002. Prices grew at an 8% to 9% rate in 2003, helped along by strong prices in Europe and a weak dollar/Euro conversion. Prices then dropped steeply thereafter. We can certainly blame part of the drop on the great shifting of purchases from big auction houses to eBay. I don't think anyone would suggest the global recession has helped collectibles, either.

Curiously, the rates of price decline decreased after 2007, even in the face of the deep and lingering recession. All things considered, it appears prices are almost 34% off the top of the market in 2003.

I am unconcerned whether these particular 43 varieties "represent" the full breadth of the collectible certificate market. After all, the Dow-Jones Industrial Index is a mere 30 heavily-traded companies that by no means represents the full breadth of the American stock market. We could argue whether a 3-sale or 4-sale moving average would show a different picture. We can wonder whether displaying the data by quarter would show more predictive behavior. We can bemoan the fact that we have no price contributions from dealers and very few from collectors. I'm not convinced it matters.

I've tried all sorts of adjustments and finally decided this picture is adequate for my needs. It tells me what I want to know about the health of the market and how I should adjust price estimates to match reality.

I will make a couple of final warnings.

Don't over-read or over-think this chart. It is simply designed to tell us whether the market is trending up or down. This chart represents the condition of the market based on 43 medium scarce North American railroad certificates. Charting more common and more scarce certificates WILL show different price behaviors. Charting certificate prices in different specialties WILL look different. Charting certificate prices from other countries WILL look different.

My crystal ball is in the shop, so I cannot possibly predict when prices will start trending up. No one is going to get me to say that certificate prices have hit bottom. However, I feel safe in suggesting that sellers hoping to unload certificates at 2003 levels will be sorely disappointed for several more years.

September 15, 2010

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.

September 08, 2010

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.

September 02, 2010

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.





eBay auctions



US auctions



Euro auctions



US dealer sites & catalogs



Euro dealer sites & catalogs



Other US



Other Euro



Total from discoveries



US collectors



Euro collectors



US dealers



Euro dealers



Total from contributions





Grand Total All Sources



August 26, 2010

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.

eBay auctions
US auctions
Euro auctions
US dealer sites & catalogs
Euro dealer sites & catalogs
Other US
Other Euro
Total from discoveries
US collectors
Euro collectors
US dealers
Euro dealers
Total from contributions
Grand Total All Sources

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.

August 23, 2010

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 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.

July 02, 2010

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.

June 14, 2010

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, 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.

June 09, 2010

What's it worth?

Every collector wants the answer to the #1 question in collectibles. It is terribly hard to answer because values are only established at single, short-lived moments in time.

The value of every collectible is what the next person will pay you. It does not matter what you or I think something is worth. No opinion matters except that of the buyer. Period.

Oh, sure, I can estimate value for you and I can back up my opinion with almost a million price records. But so what? Unless I am the guy buying from you, my opinion is nothing more than an educated guess. Nothing more. Nothing less.

It also does not matter one tiny bit what you pay for a collectible. Your ownership can certainly detract from value if you mishandle your collectibles, but your ownership can rarely add value. The amount you paid for something has no relevence except to you, your family, and potentially your heirs. Once you’ve purchased a collectible, the meaning of your expenditure disappears like mist in the sun.

It is difficult for me to explain this point clearly, so let me give you a real-life example from this past Monday.

I retruned from a trip to southern Colorado and began recording prices from eBay sales that had occurred over the previous four days. I saw one person had willingly paid over $150 for an unissued certificate. That might have been a fair price for an issued certificate, but I would have estimated its value as under $30 in its stated condition.

Did the buyer make a mistake? Maybe he or she did not notice that the certificate had never been issued. Maybe the buyer thought that unissued certificates were worth more than issued examples. Perhaps the buyer purchased the item as a gift and did not care about its competitive value.

Either way, how can we estimate what the certificate is worth today? We make that estimation by predicting what amount the next buyer will pay.

I personally predict the next buyer will probably be unwilling to pay more than $30. (Even if the sale does not occur for thirty years, we merely back-calculate and remove the effects of inflation over that period.) Of course, I can be wrong. There are certainly greater fools out there, but I think it is highly improbable that the next person will pay $150 to the person who purchased over the weekend.

Every collector has overpaid for something. Get over the idea that you are somehow immune from making mistakes. The goal is not to avoid mistakes, but to make fewer mistakes. Try to be clear-headed when buying. And please, please, please remember: just because something SEEMS to underpriced does not mean it really is. No matter how low prices seem today, they CAN go lower. Value is not set by you but by the person who ultimately buys from you.

May 10, 2010

What does the word “rare” mean?

It’s getting harder and harder to know. Theoretically, “rare” describes items that are found very infrequently. Truly rare certificates appear for sale only once every five to ten years. If an experienced MAJOR certificate dealer describes a certificate as rare, then there are possibly fewer than ten examples known on the entire planet.

At the other end of the spectrum, I recently recorded a single variety of railroad bond offered for sale on eBay no fewer than ten times in three weeks. All were described as “rare.” No true collector would ever believe a rare certificate would appear for sale that frequently.

Now it IS true that, taken as a whole, certificates are much, much scarcer than many other collectibles. On the basis of numbers alone, the most common certificate varieties would be considered scarce in the coin and stamp hobbies.

But we’re not talking about the coin and stamp hobbies. We’re talking about certificates. If a certificate variety appears for sale ten times in three weeks, it is not the slightest bit rare. I have seen many certificates described as “rare” on eBay that can be purchased in quantities of hundreds, even thousands. That should warn all collectors that, depending on where it is used, the word “rare” can be nothing more than an overused marketing term.

To further illustrate my point, a search this morning shows that seven percent (!) of all eBay certificate offerings carry the word “rare.” That is absolutely ludicrous!

Please understand that “rare” is mostly used as a marketing term on eBay. That does not mean that it is always deceptive. In fact, some incredibly rare certificates appear for sale on eBay. Some certificates, whether described as “rare” or not, appear to be unique. Keep your eyes open, ignore the word “rare,” do your research and you’ll probably do okay. Believe the word “rare” automatically implies value and you’ll spend a lot of money needlessly.

May 06, 2010

Upcoming Spink sale in Fort Worth

The newest Spink catalog arrived a couple days ago and should be in the hands of most of my readers. If you have not received your copy, contact Spink immediately.

Spink will be offering a little over 1600 lots in a two-day sale in conjunction with the Texas Numismatic Association show in Fort Worth. As expected, the vast majority of the offerings are related to coins and currency with a significant percentage of the lots illustrated in terrific full color.

Sadly, the selection of stocks and bonds is limited to a mere 22 lots of which seven are related to railroads.

I heartily applaud a couple of Spink’s auction rules. First, mail bidders can rest assured their bids will only be executed at one bid increment above the next lowest bid. In other words, if a mail bidder is willing to pay $400 for an item, but the next lowest bid is $150, the bidder will win the bid at $160 exactly as if he'd been sitting in the room.

Secondly, Spink agrees to fully disclose any items that are repaired, restored, processes, cleaned, pressed and "conserved." I desperately wish more sellers would follow this example.

On the down-side, I see no mention of minimum acceptable bids.

The sale will take place Friday and Staurday evenings (May 14 and 15) at the Will Rogers Memorial Center in Fort Worth. Lots can be previewed Thursday, Friday and Saturday.

April 14, 2010

Bridges and tunnels will stay

Thanks to everyone who replied to my questions about keeping tunnel and bridge companies in the railroad database. I conducted a similar poll ten or twelve years ago and the answer was exactly the same. Most collectors want me to keep those kinds of companies in the catalog, so I will.

Collectors constantly send inquiries asking me to add all sorts of near-topic companies to the project. I completely understand their rationale, because that is why I started this project in the first place. Simply put, they have certificates that are not covered by any other price guide.

The problem is that adding new companies is a monstrous task and greatly dilutes my efforts at cataloging railroad certificates. Not to mention, that off-topic companies do not help the vast majority of collector who specialize strictly in railroad certificates. As a matter of policy, the only companies I now add to the project are railroad companies and manufacturers which were extremely close to railroading.

For those of you interested in my selection criteria, I ask you to visit my completely re-written page concerning Types of companies included in this guide. I have been fighting an exhausting battle against project expansion for fifteen years and this is the latest attempt at strengthening the lines.

(The picture at the top is from a stereo view card from around 1900. It shows a Pennsylvania Railroad bridge across the Potomac River at Washington DC.)

April 05, 2010

Savage's plea for more money

Here is an interesting page sent by a Mr. Corey Phelps, a long-time collector. It is a hand-typed letter on letterhead from the Minneapolis St Paul & Dubuque Electric Traction Co. This was the "Dan Patch Electric Line" tirelessly promoted by Marion Savage and named after his famous race horse. (The horse owned the world pacer record for either 32 or 54 years, depending on information source.)

Savage was one of the first promoters to attempt to sell railroad stock to average people. He advertised heavily in magazines, where he relied on the strength of the famous "Dan Patch" name to secure promises to buy stock in the railroad company.

The company was organized in 1907 and had 7,980 stockholders by 1914. Bob Kerstein of cites the company had about 8,500 stockholders at its peak, an astounding number for a company of its size. Common stockholders had voting rights, but preferred stockholders did not. The company was only minimally profitable and was in receivership by 1918. The owner and I agree that this undated letter was probably written about 1914.

This letter, autographed by Savage, was a plea to the subscriber to pay for his or her stock. The letter is complete in itself, but is clearly labeled as page two. Page one is missing and I suspect it may have been some sort of flashier company promo. Obviously, whoever kept this letter over the decades thought the second page more important than the first.

"This is a personal letter that I am sending to you and I want you to write to me personally today -- use the enclosed envelope which I have stamped for your convenience. Your letter will then come directly to my desk. I will expect to find some money in it. Please Don't disappoint me.

"Send what you owe use and I promise I will personally attend to the immediate mailing of your certificates and I will also personally promise to bring our road to completion at once and won't have to again urge you for more money. Write me today and don't forget to send me the balance due on your contract. I will look for your immediate reply -- Remember the fulfillment of my plans depends upon you as one of my partners.

"Your very truly,
(signed M W Savage)

"P.S. I think I have showed you how it is to your interest to pay what you are owing on your contract, but in order to make it practically certain that you will send me the balance at once, I am going to allow you a liberal discount for your immediate payment. If you will send me the balance due at once you may deduct FIVE PER CENT from the amount. Now, this certainly makes it well worth you while to pay us at once. Even if you have to borrow the amount it will pay you to do this, so as to get this Extra liberal discount. It will be a benefit to you and your company -- let's complete our road and get it started to earn big money right away.

"Do this and I promise you I won't have to again urge you to send us more money. Send us your remittance, deduct FIVE PER CENT, and I will send your certificates at once, and I will bring our road to completion by January 1st.

"M. W. S."

March 22, 2010

When it's time to sell...

Collectors are well acquainted with the buying sides of their hobbies. I think most, however, would collect differently if they understood more about the realities of selling.

Unfortunately, it is hard to find good information about the selling side of collecting hobbies. I think that is why collectors so often misunderstand how much their collections will be worth when it comes time to sell.

Before my readers reach the ends of their collecting careers, I BEG them to spend time discovering what the reality might be. I first recommend they go to Stephen Goldsmith’s site at There they will find well-labeled links with crucial answers about:

  • I your collection suitable for auction?

  • Determining the value of your collection.

  • Who will catalog your auction lots?

  • Setting auction reserves.

  • No-sales, buy-backs and returns.

I am extremely serious about this warning. The more collectors know about where they’re going with their collections, the better their chances of profit. Stephen Goldsmith knows what he’s talking about because he was heavily involved in over 220 auctions while executive vice-president with R.M. Smythe & Co. He is now a numismatic consultant and president of Best Coins and Currency.

Another excellent source is Stephen Datz’s informative and easy-to-read series of books about the stamp hobby. Datz’s stories and advice about the reality of selling stamps is almost 100% applicable to our hobby. I don’t think certificate collectors can go wrong reading any of his books, but I particularly recommend Top Dollar Paid and On the Road. You may buy his books at philatelic outlets, from Amazon and from Stephen Datz himself.

March 16, 2010

American Bank Note Archives Auction Part 5

Dr. Robert Schwartz and Archives International Auctions has just published the latest installment of the American Bank Note Company archives auctions. Sales from this company’s VAST archives have been going on for an amazing 22 years!

This sale is the first to be handled exclusively by Archives International. While the previous four sales were cataloged and described by Schwartz, H.R. Harmer handled publication and sales. Because Harmer is a big “house”, its sales had to be huge. This sale is smaller than the earlier sales and I personally think that is a good thing. Not that a two-day sale is anything to snivel at. I just feel that overly large sales overwhelm collectors’ wallets. In large sales, collectors find too much they want and then back off on their bids. They will either bid less or bid on fewer lots. This is especially true for average collectors with average budgets.

So, speaking strictly for myself, I like the huge catalogs, but I feel a 260-page, fully-illustrated, full-color catalog totaling 1827 lots is about right.

As usual, the sale is split between stocks and bonds and paper money and the whole world is represented. There is, of course, a wide array of stock and bonds represented with a very good showing for railroad issues.

The sale will take place April 15 and 16 in Englewood, New Jersey. If you have not already ordered your copy of the catalog, make sure you contact Archives International at or visit its web site at

March 02, 2010

Bridge and tunnel companies – should they stay or should they go?

Tunnels and bridges are nearly as crucial to railroading as locomotives and rolling stock. For that reason, I have always included a small number of those companies in my database. Here is a list of tunnel and bridge companies generally accepted as being closely related to railroading.

Am I missing any? Should I remove some? Should I remove all?

The reason I ask is because collectors seem uninterested in certificates from these kinds of companies. I have only had a couple of correspondences about bridge companies in the last 15 years and I cannot remember a single question about tunnel companies. The silence is so deafening that I can't help but wonder whether it is worth my time to track these kinds of certificates.

If you have any opinions, now is the time to tell me. Either post a comment here in this blog or contact me directly.

  • Baring Cross Bridge Co

  • Canada Southern Bridge Co

  • Detroit River Tunnel Co

  • Dunleith & Dubuque Bridge Co

  • Hudson River Bridge Co at Albany

  • Louisville Bridge Co

  • Louisville & Jeffersonville Bridge Co

  • Michigan & Canada Bridge & Tunnel Co

  • Moffat Tunnel Improvement District (bond shown above)

  • Niagara River Bridge Co

  • Oswego Railroad Bridge Co

  • Railroad Bridge Co

  • St Louis Merchants Bridge Co

  • Sault Ste Marie Bridge Co

February 25, 2010

How do you know if certificates were cancelled?

Well...that depends...

Which type of cancellation are we talking about? Corporate cancellation or paper cancellation? The two are different.

Collectors in practically every field ascribe higher values to items that are intact. The less intact, the lower the value. In our hobby, collectors desire fully intact, fully issued certificates. Ideally, collectors want certificates to look like they did on the day they were issued.

(Shown is a Wagner Palace Car certificate cancelled four ways: handwritten, rubber-stamp, circular punches and punches shaped like the letter 'P'.)

Collectors recognize many different types of cancellation. Certificates are often stamped with a rubber-stamp impression that says, "Cancelled." Many certificates were cancelled with punches that spelled out the word "Cancelled" with tiny holes. Older certificates often display the handwritten word "Cancelled", although large handwritten 'X's and marks through signatures are more common.

Cancellation purposely damaged certificates to some degree. The vast majority of certificates were cancelled by holes punches that removed paper. Typical circular paper punches ranged from 1/8" to 3/4" in diameter. Holes of other shapes are less common and were rectangular or shaped into diamonds, stars, crosses, letters, hearts and just about any shape imaginable. Sometimes signatures and big chunks of paper were removed with razor blades and knives.

Less obvious are "cut cancellations" made by special, dedicated cutting devices. From the front, cut-cancelled certificates often look completely intact, but pick one up and your fingers often poke through slits in the paper.

Regardless of methods, the whole idea of cancellation was to make it obvious that documents had been used and were no longer negotiable.

What happens, though, when writing on the backs indicates certificates were transferred, but the certificates are otherwise intact? Were those certificates cancelled?

Collectors say, "No." Companies say, "Yes!"

Many companies, perhaps most, were forgivably sloppy with their paperwork. Companies received cash when they initially issued stocks and bonds. Most were thorough with their initial signing, counter-signing, stamping, and issuance. No company, however, ever made money when it touched its certificates after that point. Because of the potentially large amounts of money involved, there were many steps necessary to transfer certificates from one owner to the next. Unfortunately, all transferences cost companies money.

Our certificates show evidence that many companies skipped steps here and there. Truth be told, the final step of damaging certificates was often redundant and unnecessary. Few if any companies ever intended to let their old certificates out into the collecting world. Almost all companies incinerated their old certificates. Many companies wondered, "Why bother with an additional step of writing, punching or slicing when we're going to destroy our certificates anyway?"

When we talk about cancellations as collectors, we only care whether certificates are marked as little as possible. More properly, we are looking for certificates that do not show any typical evidence of cancellation.

Just because certificates show no evidence of cancellation does NOT mean they are still negotiable securities. From financial and legal standpoints, there is one and only one final proof of cancellation: the corporate record book. If a stock certificate was transferred to another individual, it was cancelled. If a bond was paid off, it was cancelled. Simple as that. The record book always prevails.

Companies and collectors disagree over the definition of the word "cancellation." Since corporate record books are rarely available to collectors, we can never make the definitions consistent. Companies define cancellation as an event whereas collectors define cancellation as a paper condition. Whether paper cancellation reflects the event of corporate cancellation is a matter of luck.

Getting back to the original question, the majority of collectors consider certificates uncancelled when there is no writing or paper destruction.

February 17, 2010

More certificates from the American Bank Note Company archives

Dr. Robert Schwartz has announced the sale of certificates, paper money and ephemera from the archives of the American Bank Note Company. The sale will take place April 15 and 16at the Crowne Plaza Hotel in Englewood, New Jersey. As with Bob's four previous sales, the catalog will be massive and should be available mid-March.

Unlike previous sales, Bob is handling the entire sale himself, a move which I personally applaud. Obviously, this means a tremendous amount of work, but I always collectors are more happy and more willing to spend when they know precisely where the proceeds are going. Dr. Schwartz has been in the business for many years and almost every collector has met him if they've attended shows in the East.

(The certificate shown above is an 1864 South Carolina stock certificate from a blockade running company. I will be most interested to see what that historic item fetches.)

The April sale will be handled entirely under the banner of Arhives International Auctions. There are currently about 500 lots planned for the stock and bond specialty. I don't know the precise percentage that will be rail-related, but you should probably expect about 150 to 200 lots. The sale will offer an additional 1100 lots involving paper money and security printing ephemera.

As I mentioned, the catalog will be availble in mid-March which is really only three weeks away. Catalogs will cost $15 postpaid (!). As always, I recommend putting in your order as soon as you possibly can. Send your email to or call Dr. Schwartz at 201-567-1130.

See more information about the sale (with additional fax and mail contacts) at Archives International's new web site at

February 08, 2010

Railroad and Trains magazines database now online

Several stock and bond collectors have told me they collect railroad magazines. About five years ago, I began compiling a database of information about Railroad Magazine and Trains Magazine, the two longest-running and most collectible consumer periodicals on railroading. I just finished adding that information to my web site at Railroad magazines. (Or click on the menubar at Home > Other interests.)
Frank Munsey started Railroad Man's Magazine in 1906 as an adjunct to his successful Argosy Magazine. Railroad Man's Magazine was a male-oriented "dime novel" (or novelette) monthly that told stories of high adventures and travails in railroading. Railroading had been a popular subject for story magazines since the late 1850s and it is somewhat curious that it took so long to start a dedicated publication on the subject.

Munsey's magazine was moderately successful and survived in monthly form for about thirteen years. Starting in December, 1918, the publisher tried a weekly schedule for the magazine and then tried a combination called Argosy and Railroad Man's Magazine. The experiment does not seem to have worked and by May, 1919, the magazine reverted to independent form and monthly issuance.

Based on the numbers of issues I've encountered, Railroad Man's Magazine must have had modest circulation. Nonetheless, it survived and ultimately changed its name to Railroad Stories in February, 1932. Although the content did not change much, the covers of Railroad Stories were much more intriguing and colorful than its predecessor. In fact, its covers were very much in the style of detective and true crime novels of the time. This move must have kicked sales, because many more issues of Railroad Stories survive.

Like coal mining and other heavy industries, railroading had become much safer and more commoditized throughout the 1920s and 1930s. Fictional stories of train robberies, bridge collapses and fateful crashes became increasingly unrealistic and the desire for fiction gave way to a growing demand for factual articles about railroading. The magazine obviously recognized the trend and changed its name to Railroad Magazine only five years later (September, 1937). While fictional stories and poetry continued to appear for many years, content eventually switched to real history and factual reportage by the 1940s.

The demand for real facts was not lost on A.C. Kalmbach who had made a living reporting on and photographing real railroads. Kalmbach started Trains Magazine in late 1940 and even went so far as to make the cut size of his monthly periodical almost identical to his long-running competitor.

Kalmbach's focus was strictly professional and factual. He chose coated paper over pulp and thereby gained the ability to offer higher quality photographs than Railroad Magazine. The heavy reliance on photographs and costly paper meant Trains Magazine had a higher sticker price – 25¢ versus 15¢. Trains had half the pages of Railroad which meant its actual square-inch cost was almost four times higher.

While obviously covering the same subject, Trains Magazine and Railroad Magazine had noticeably different audiences. The differences are most noticeable in the designs of their covers and their advertising content.

Popular interest magazines of all descriptions began using photographs on their covers by the mid- to late 1930s. Except for a couple single-issue experiments (Nov, 1939 and Jun, 1954), Railroad Magazine relied on custom art work for its covers until 1955. Many of its covers (especially in 1939) were purposely heroic and inspirational. Several covers drew on an earlier Art Deco styles (Apr, 1950) and a few were excellent derivitives of Frederic Remington's "nocturnes" (Aug, 1940, Mar, 1941, Nov, 1948) popularized four decades earlier.

By comparison, Trains Magazines relied on real black and white photographs from its very first issue in 1940. Trains Magazine's photos, both inside and out, often bordered on "artsy," very much in the style of industrial-subject photos that appeared in Life Magazine of the era (Nov, 1940, Dec, 1940, Dec, 1954.) While there may be more, I can only find one dedicated artwork cover (Nov , 1947). The least attractive covers appeared when Trains Magazine experimented with strong graphics on its covers (May, 1954, Jul, 1955 and the abyssmally bad cover of Jul, 1959)

The two magazines also displayed obvious differences in advertising content. From its inaugural issue, Railroad Magazine had always played to a popular consumer audience. Ads included the same ones that readers could find in practically any magazine: cigarettes, Mason shoes, promos for book collections of the classics, fishing lures, the Rosicrucians and get-rich-quick schemes. Trains Magazines tried to appeal to a more world-wise market and featured travel-oriented and image advertising by all the major railroads. The professional railroading aspect was played up with ads about freight movement, reliable wheel bearings, strong diesel power and dependable trucks.

While there are several other railroad magazines with collector interest, I have only collected information about these two classic magazines. I have recorded a few thousand sales of these magazines and show high, low and average prices when possible. I currently offer images of about 270 Railroad Magazine covers and roughly 180 Trains Magazine covers. That means I have a lot of room for improvement. I solicit any new images my readers may be able to supply. If someone might like to contribute information about other magazines (real railroads only), contact me and we'll discuss adding new pages.

Magazines dated after 1980 are usually worth much less than a dollar each, so that has always been my cut-off date. However, if any of you can supply images of Railroad or Trains magazine covers dated after that time, I will be glad to extend my date range.

January 12, 2010

New Clinton Hollins catalogs

Those of you who buy exclusively through eBay really need to receive Clinton Hollins' catalogs.

You see, Clinton has such a monstrous selection of certificates that he often sells certificates below prices realized on eBay. In fact, many of the certificates you see for sale on eBay have moved through Clinton's hands at one time or another.

As I've mentioned before in this blog, Clinton's catalogs are no-frills – no fancy photos, no slick paper, no insistent promos. Just simple descriptions and great prices. Each catalog is 32 pages on 5½ x 8½ white paper. Clinton normally offers special prices for those collectors who like to buy multiple color varaties. He also offers great prices for small dealers wanting to buy multiples for inventory. Make sure to check out his "Bargain Lots" catalogs, as well as his "Railroad" specialty issues.

You can see much of Clinton Hollins' inventory online at Contact him at

Clinton Hollins
PO Box 2711
Springfield, VA 22152-2711

January 06, 2010

New certificate rarity system now online

After several years of development, I have just rolled out a new rarity system for railroad stocks and bonds. You may see it in action by searching for any certificate in your collection.

After many conversations with dealers, collectors and authors, I decided to use a 7-point system arrayed from most common to most rare.

The system is arranged like this:
R1 = likely to appear more than 10 times per year
R2 = likely to appear 4 to 10 times per year
R3 = likely to appear 1 to 4 times per year
R4 = likely to appear once every 1 to 3 years
R5 = likely to appear once every 3 to 5 years
R6 = likely to appear once every 5 to 10 years
R7 = likely to appear less than once every 10 years

R? = Rarity unknown. I reserve this designation for certificates priced under $50 which are suspected of being substantially scarcer than their prices would otherwise indicate. For instance, I would use this designation in the case where a certificate has been seen only once or twice in 30 years, but it sold for only $15. Why so cheap? Is there an unreported hoard somewhere? Was the $15 sales price a very lucky fluke for some collector?

The system does not measure populations. We can NEVER know the numbers of certificates that exist. Instead, the system measures historic appearances over the last thirty years. It gives you hints on rarity by estimating how often certificates come up for sale. The system is database-driven, so rarity estimates represent appearances as recently as the last database upload. There are currently about 980,000 appearance in the database.

See for a further discussion of the system and its accepted shortcomings.