Matthias Schmitt, HWPH auctioneer: exclusive interview on collecting scripophily

"Fear of inflation will support the whole Scripophily market in 2012 - and in ongoing years"

So says Matthias Schmitt, owner of HWPH AG based in Zorneding, Germany. HWPH is a leading auction house in scripophily, the collecting of historic stock and bond certificates.

Like many other 'niche' collecting hobbies - whether it's postage stamps, rare coins or banknotes - scripophily might seem perplexing  to the uninitiated. Yet, for scripophily collectors, historic share certificates are viewed as pieces of art.

Early certificates bore very elaborate designs - in fact, investors often saw more elaborate designs as signs of certain future profit. Not surprisingly, bankruptcies were common among the firms that produced these certificates.

Aside from their aesthetic qualities, rare scripophily items can also have intriguing stories attached, often linked to such pioneers as Thomas Alva Edison and John D. Rockefeller.

Examples include this historic share certificate for Standard Oil Trust. It is presently for sale at Paul Fraser Collectibles, signed by Rockefeller himself.

Collectors' growing fascination with historic scripophily collectibles saw a Lehman Brothers Stock Certificate #1 sell for $33,100 at HWPH last November. Just one of many remarkable sales in the underreported hobby of scripophily.

Following this auction success, and with other big sales in store, Matthias Schmitt kindly took time out from his busy schedule to answer our questions about the past, present and future of the rare scripophily markets...

PFC: How did your background lead to you becoming an expert in historical certificates, stocks and bonds? 

Matthias Schmitt: I've been interested in the stock market for almost 25 years now. After the Black Friday [stock market crash] in 1987, I became interested in stocks and bonds. In 1988, I started collecting old stocks and bonds, and in 2001 we had our first auction.


Matthias Schmitt: 'I've been
interested in the stock market
for almost 25 years'

Collecting old stocks and bonds is the combination of investing in the stock market and being interested in history.

PFC: What makes your company different?

MS: We are the only auction house in the field of Scripophily which is not also a dealer. We have no 'own stock' [and] we only act as a broker for our customers.

This gives us the chance to price items fairly, and to give consignors a clear idea of their items' value. Furthermore, we are using new [methods] like internet offers. Customers can bid online in our auctions since three years ago.

PFC: What is the most valuable lot you have ever auctioned?

MS: The most valuable item was a share in Diorma, issued 1822 (pictured, below). The certificate was signed by Louis Daguerre!

Louis Jacques Mandé Daguerre (1787-1851) was a French painter and the inventor of the Daguerrotype, the first marketable process of photography. Daguerre is one of 72 people whose name is on the Eiffel Tower.

[Our] start price was €5,000 and we sold it finally for €31,000.

PFC: Which item in your auctions has surprised you the most?

MS: A Mexican Bond (bottom picture). We offered it with a start price of €350 and finally sold it for €8,000.

PFC: Which scripophily-related item would you most love to add to your own collection?

MS: The founders' share of the Vereenigde Oostindische Compagnie (V.O.C.), which is the oldest company in the world.

It was founded 1602 and the earliest share certificate known is from 1606. But it is not for sale…

a share in Diorma410.jpg
A share in Diorma, autographed by Louis Jacques Mandé Daguerre

PFC: What is a typical day for you at HWPH?

MS: It depends on which stage of the auction cycle we are [at].

At the moment, I spend almost the whole day with collecting items for the next auction from customers, describing them. I visit consignors and take the items.

PFC: Do you have any funny stories from your career as a scripophily expert?

MS: One of the funniest stories is the Banque d'Orient. Share certificates of the predecessor of the Greece National Bank were issued between 1910 and 1926. For large quantities, prices were a few Euros, single items were traded at €15 to €20.

Then, one day last September, I got dozens of emails requesting if an item was still available which we offered years ago.

I started investigating, and discovered that a Greek Professor, living in the US, had found out that something went wrong with the Banque d'Orient and the company was liquidated. The items should be valued at billions of Euros!

Some funny guys in Greece gave the certificates to the Greek Minister of Finance to cover the National Debt. This was shown in television and discussed in many blogs. Many Greek people contacted us and also wanted to buy items.

Within a few days, prices rose up to €5,000 per share. [But after] a few days, prices collapsed - like in the tulip mania almost 400 years ago [the Dutch Golden Age during which contract prices for tulip bulbs reached extraordinarily high levels and then suddenly collapsed].

PFC: What is your most memorable highlight from your years in the business?

MS: The absolute highlight was the share number one of Lehman Brothers. Even the German main TV news, Tagesthemen [one of Germany's prime daily TV news programmes], reported for 1.30 minutes about our auction, last November.

A Mexican Bond410.jpg
This United States of Mexico bond auctioned for €8,000

PFC: What can we look forward to from HWPH - or the wider scripophily markets - in 2012?

MS: We [will] hold two auctions this year. One on 28 April and one on 10 November. In April (our 25th auction) we have a special 'Top 50 catalogue' in which the Top 50 items of our auction are described at one or two pages per item.

Texts will be both in English and in German, and Russian items in [the] Russian language.

We will have several very interesting items like a Standard Oil Company with three signatures of John D. Rockefeller.

Fear of inflation will support the whole Scripophily market in 2012 and in ongoing years. I think this will also push all collectibles markets, because these are all material assets.

PFC: Finally, what is your best piece of advice for collectors?

MS: I advise everyone to collect information first. Clearly set your area and goal of collecting. And then study old catalogues and find out who is big in your area of collecting and what is rare.

This is almost the guarantee to being a long-time happy collector.

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