Monday, August 29, 2011

Investing in Old Stock Certificates

QUESTION: I’ve been unpacking some old boxes of things left to me by my father. In one of them I discovered some old stock certificates. Are they worthless or do they have investment value?

ANSWER: Old stock certificates, especially those from defunct companies, are only worth the paper that they’re printed on. But some, especially those with signatures from famous people, famous companies, or those involved in major scandals, can be worth quite a bit.

What exactly is a stock certificate? A stock certificate is the physical piece of paper representing ownership in a company and includes the number of shares owned, the date, an identification number, usually a corporate seal, and signatures. They’re larger than a standard letter-size piece of paper and many also have elaborate engraved designs to discourage counterfeiting.

Stocks represent partial ownership in a company. Today, most companies keep records of ownership electronically but some allow their shareholders to request a paper version. Each certificate starts out as a standard design to which the company adds the date of issue, identification number, and other information, including the printed signature of the chief executive. Executives on older certificates signed them in ink.

According to financial historians, partnership agreements dividing ownership into shares began to be used in northern Italy during the Middle Ages. However, these early shares were only intended to be in effect for a short time and only included a small group of people. Eventually the idea of shareholding spread to Belgium, and it’s believed the concept caught on in the trading town of Bruges. It was here that the idea of the stock exchange originated.

Eventually, shareholding took its next big step in Amsterdam in the early 17th century when the Dutch East India Company, formed to encourage trade in spices from Indonesia, issued shares that were tradable. The company compensated its shareholders well for their investments. In 1621, the market saw the issuance of shares for the Dutch West India Company, and much financial innovation ensued. Stock exchanges in the New World didn’t appear until 1790 in Philadelphia and then two years later in New York.

Collectors love canceled stock certificates because of their beautiful and elaborate graphics, as well as their connection to the historically significant companies they represent.

Old certificate values vary depending on their rarity, beauty, collector interest, historical importance, and  autographs, and industries for which they’re issued. Like all collectibles, supply and demand determine value.  Interesting pieces create a lot of demand while supplies vary.

What affects the market for stock certificates? Above all, general economic conditions tend to influence the prices of old stock certificates because many collectors of them are also involved in the real stock market. The law of supply and demand, as with other collectibles, governs this market as well. And Internet auctions have increased not only the availability of old stock certificates but their ease of purchase.

What determines the pricing of old stock certificates? Two important price boosters are signatures of important people and newly formed companies. For example, a Standard Oil Company certificate that John D. Rockefeller signed is worth nearly $8,000 today. Prices have leveled off in the last few years and finding rare certificates at reasonable prices has become a real challenge.

As with postage stamps, pricing can be affected by the rarity of a certificate—the rarer it is, the higher the price. An autograph of someone famous of the stock company with which he was involved also raises the price. Whether a stock certificate has ever been issued also influences it value, as does its age and decoration. The location and history of the company don’t affect the price of a certificate as much as, say, its condition and whether its canceled or not.

However, no one point is always in control of a certificate’s value. For example, a Cody-Dyer Arizona Mining & Milling stock certificate, from a failed gold mine, signed by Buffalo Bill Cody currently is currently valued at approximately$4,000, while a rare unsigned Buffalo Bill's Wild West Co. stock certificate sold for $20,000 at auction in 2008.

As with any collectible, you should always collect stock certificates that are in excellent condition, have been issued, and are uncanceled. You should also collect certificates from industries that you’re familiar with or in which you’re interested. Early companies issued their stocks in small quantities, thus limiting the number of their certificates in today’s market. But there are lots out there for sale at low to reasonable prices.

Monday, August 22, 2011

Unlocking the Mystery Behind the Padlock

QUESTION: I’ve found a Victorian padlock that I’d like to buy. Does it go back to the mid- 1800's during Queen Victoria's reign? It’s quite large, measuring 6 inches high x 4 inches wide x 1.5 inches deep. Was that a common size? The seller told me it’s called an "Iron Smoke House Lock," What does that mean?

ANSWER: The lock you’re thinking of purchasing isn’t all that rare. During the Industrial Revolution in England, Midland lock makers produced them by the thousands.

As England moved slowly from an agrarian culture to an industrial one towards the end of the 18th century, locksmiths began designing locks that cost less and had more strength. But burglars kept one step ahead of them. Up to that time, only wealthy merchants could afford strong locks. The average person had to make do with poorly made penny padlocks to protect his coal storage bin from thieves, and homeowners wanted locks for their doors and windows. With an increase in thievery, people demanded locks for everything from Bibles to carriages to schools and warehouses.

The answer to everyone’s needs was the padlock, a portable, if not somewhat cumbersome, device to protect against forced entry.

Robert Barron invented the double–acting tumbler lock in 1778. The tumbler or lever falls into a slot in the bolt which will yield only if the tumbler is lifted out of the slot to exactly the right height. Barron’s lock had two such levers, each of which had to be lifted to a different height before the bolt could be withdrawn.

Jeremiah Chubb improved on Barron's lock n 1818 . He incorporated a spring into the lock which would catch and hold any lever that had been raised too high by a lock picker. Not only did design add an extra level of security, it showed when someone had tampered with the lock.

Early padlocks offered  convenience since people could carry them and use them where necessary. Historians believe the Romans were the first to use padlocks. There’s also evidence that merchants traveling the ancient trade routes to Asia and China also used them to protect their goods.

Padlocks became known as “smokehouse locks” because people commonly used them to lock their meat in their smokehouses to prevent poachers from stealing it. Lockmakers, employing the traditional English design, made those first used in the U.S. from sheets of wrought iron and simple lever mechanisms.

Each lock consisted of a body, shackle, and a locking mechanism. The typical shackle is a “U” shaped loop of metal that encircles whatever is being secured by the padlock. Most padlock shackles either swung away or slid out of the padlock body when in the unlocked position. Improved manufacturing methods allowed the manufacture of better padlocks that put an end to the Smokehouse around 1910.

Monday, August 15, 2011

Preserving Antique Furniture

Some pieces of furniture, especially those constructed of harder woods, such as walnut, mahogany, maple, oak, or cherry, may only need to have their surface finish preserved. In the case of furniture made of these woods, there may be enough of the original finish left to restore the piece rather than refinish it.

Before doing anything, study your piece. Is the finish pretty much intact? Does the piece have a nice patina? Is the piece more than 100 years old? If you answered yes to even one of these questions, then you should do your best to preserve the finish of your piece.

The first step to preservation is cleaning. Furniture gets dirty, even grimy over time. Before you can apply a new finish, you need to get rid of all the accumulated dirt and grease that often make it difficult to tell what kind of wood the piece of furniture is made of. Grime can also hide the fine lines of inlay and marquetry. Believe it or not, using lemon oil, a popular furniture polish, can do more harm than good. Since its made of a light petroleum oil and some paraffin wax, the wood doesn’t absorb it. Instead, it acts as a surface dust catcher.

One of the best products for cleaning wood, especially furniture, is Murphy’s Oil Soap. Today, it’s also in a spray bottle, but in case you can’t find it that way, you can make your own cleaning solution by mixing a capful of Murphy’s in a spray bottle of water. For this, you can use any empty spray cleaner bottle, as long as you wash it out thoroughly first. Since water will loosen any glued joint, and also tends to raise the grain of the wood, you don’t’ want to use very much. An old washcloth will do quite well for cleaning.

Spray the Murphy’s on a damp washcloth and then rub it on the surface of the furniture. Rinse the cloth when it gets to dirty. Have a second wet, but wrung out, washcloth ready to wipe off the Murphy’s Oil solution, wringing the cloth nearly dry after every few wipes. You can also use a green scruby cloth, sold in Dollar Stores, if there’s hard to remove grime. A stiff-bristle brush will allow you to get the dirt out of carved and turned areas. The secret is to clean only a small area at a time–one leg of a chair, one part of a chest, and so on. After you clean an area, wipe it dry with an old face towel. Be sure to wash out all your cloths or use others as you progress, especially on a large piece of furniture. After you have finished cleaning your piece of furniture, give it a final wipe with a clean cotton rag and set it aside to dry for 24 hours.

Now you’re ready to apply a new finish. You can either use plain tung oil (see last week’s blog) or a product like Minwax® Water-Based WoodSheen® which is a water-soluble mixture of furniture finish and stain that comes in six colors. For a piece that’s got lots of scratches or marks, it’s best to choose a stain color that complements the wood’s original finish.

The final step is polishing the entire piece using a prepared wax like Minwax, which comes in light and dark varieties. Obviously, use the light for woods like oak or cherry and the dark for woods like walnut or mahogany. Apply the wax with a piece of soft cotton cloth like an old athletic sock and after 30 minutes, polish the surface with an old face towel. One coat should do it, but for tabletops, apply two coats of wax.

Rub off the first coat with 0000 steel wool, then apply the second and polish with the towel. The more coats of wax you apply, the more water resistant the top will become. A light polishing once or twice a year will keep your piece in great condition.

There are no short cuts or time savers to this entire process. The work can be slow and at times tedious, but the results are worth it.

Monday, August 8, 2011

Basic Refinishing 101

QUESTION: I have a 1930's silky oak drop-door desk that has been in our shed for about 20 years. It has seen a few cyclones and had a lot of weathering and the doors are off and knobs missing. This desk holds special memories for me as a young child watching my dad working at it. I’d like to refinish it but have no idea where to begin. How hard would it be for a beginner like me to refinish it?

ANSWER: Your desk sounds like the ideal piece of furniture on which to learn about refinishing furniture. For many beginners, refinishing seems easy, but it’s far from it. First you need to decide if the piece needs to be completely refinished or the original finish preserved. Your desk seems like it may fall somewhere in between.

It’s only been within the last 20 years or so that refinishing products have appeared that make the job less intimidating. However, most people think you have to strip off all the old finish before applying a new one. That all depends on the condition of the piece.

Your piece appears to have been through some tough times. Before you do anything, you need to evaluate it. Has the finish been mostly removed by weathering or is it spotty? If it’s the former, then you’ll need to sand it following the grain of the wood with fine to medium grade sandpaper. If it’s the latter, you may be able to just clean it up and apply a new coat of varnish. With refinishing, a little effort goes a long way. The nearer you can keep your desk to its original condition, the better.

Let’s assume the worst. If the finish has mostly been removed by weathering, you’ll need to remove what remains with a good varnish remover. Be sure to buy one that’s water soluble. Even though this takes longer to achieve the results you want, the fumes are mild and cleanup is easy. When using a remover, always brush it on with the grain of the wood. Do a little section at a time, turning the piece on end if necessary to make it easier to apply the remover. Scrap it off with a putty knife, and be sure to have a roll of paper towels handy to wipe up the excess and stripped varnish or paint.

After you’ve completely stripped your desk of its finish, lightly sand it with fine sandpaper. Wrap the sandpaper around a wooden block for support and sand with the wood grain. Be careful not to over sand---just enough to smooth the surface. After you’re finished sanding, wipe the desk with a damp cloth to remove all the dust. Do not get the wood wet.

Once you have prepared your desk for its new finish, let it rest for a day to make sure the surface is thoroughly dry. Dust it off with a dry cloth to make sure it’s clean, then begin to rub on a new furniture finish of tung or Chinese oil using a piece of white tube sock or other soft cotton material going with the grain of the wood. Several manufacturers make this, including Formbys, and you should be able to buy it at your local hardware or home center. The first coat will soak into the newly stripped wood. Let it dry 24 hours, then sand lightly with fine sandpaper. Dust it with a damp cloth again and let dry. Apply a second coat of the tung oil and repeat the process, except this time rub it with 0000 steel wool after it dries. Dust off again and apply a third and final coat of tung oil, but don’t rub with the steel wool this time.

The advantage to using tung oil is its rapid drying capability. Though it will feel dry to the touch in an hour or so, be sure to let it thoroughly dry for 24 hours. And don’t apply it on a humid or rainy day. And here's a tip: Wrap your application cloth in plastic wrap or put it into a Zip-Loc sandwich bag and place it in your freezer. Take it out 30 minutes before you're ready to apply another coat, and it will be ready for you.

Be sure to tune in next week to learn about preserving the finish of a piece of furniture that isn’t in such bad shape.

Monday, August 1, 2011

Treasure Between the Pages

QUESTION: I was given some old magazines, two of which are dated 1894?  How can I determine if they are of value?

ANSWER: Is it worth keeping old magazines? The answer to that question depends on several things. Just stockpiling old magazines doesn’t result in any significant gain unless you know what you’re doing. Perhaps a family member gave or left you some. Now what?

As with any other type of collectible, condition is critical. However, you could have a back issue that's over 100 years old and pristine but virtually worthless because there's nothing inside or on the cover that a collector would be interested in.

And like other collectibles, an old magazine is only worth as much as someone is willing to pay for it. Perhaps you have some that feature fairly recent notable events, but then you find that they’re only worth a fraction of what you thought. And if no one wants them, they’re worth nothing. Take the Saturday Evening Post, for instance. Most issues from the 1960s forward aren’t worth the paper they’re printed on–one reason the magazine didn’t last. About the only reason anyone collects later issues are for the covers by Norman Rockwell during the 1950s. For modest collectibility, you need to have issues from the 1930s and 1940s. And if you’re lucky enough to have an issue or two in good condition from the 1920s, then you’re talking big bucks.

To know exactly what you have, you’ll have to do some research. Find out what magazines are selling. Check eBay, of course, but don’t forget to check other sources, such as ephemera price guides and other Web sites belonging to dealers and collectors.

So what are collectors looking for in old magazines? The majority look not at the whole issue of a magazine but at certain parts. Some look for vintage magazines with covers by a famous artist. Did you know that Andrew Wyeth painted a Saturday Evening Post cover—and only one at that? Others look for unusual advertisements. They carefully remove the ad and sell it separately, matted and/or framed. A magazine full of unique advertisements could bring in more than issue, itself. A few look for first editions while others look for articles on specific topics.

Like most collectibles, the price of an old magazine is directly related to its age, condition, and the general demand for it. And with demand comes supply. As with newspapers, publishers print magazines in great quantity, especially today. The higher the number printed of a particular issue, the less it’s worth.

By far, the most popular magazine is LIFE. You see them everywhere—at garage sales, on tables at flea markets, and on counters in antique shops. They’re larger than most other magazines and have distinctive covers with the date printed on them in big type. But even famous issues, like the one for the Apollo Moon landing in 1969, only sell for a few dollars. Why? Because they flood the collectible magazine market.

Another topic that you’d think would be highly collectible is the assassination of John F. Kennedy. LIFE, Look, and the Saturday Evening Post all did extensive coverage of the event. Today, you’ll find mint copies of these issues selling for $25 or so at an ephemera show. That’s because T.V. shows on collecting and such have given everyone the impression that these are very valuable. So everyone who has them continues to hold on to them. In this case, it pays to research the event and the market for magazines reported it.

The two hottest collectible types of magazines continue to be those featuring stories, photos, and covers of movie stars and sports personalities. But even these don’t bring much more than $20 an issue—and that’s only if it’s in mint condition.

National Geographic gets the prize for the all-time worst magazine to hold on to. Again, too many people have held onto them which means the market for them is overloaded.