Saturday, December 26, 2009

About the State of Issue

The name of the state in which the stock was issued is almost always listed on the stock. Often the tag line “Incorporated Under the Laws of the State of…” precedes the actual state, or in a few instances, the territory name. It is always a very good policy to check this closely. The state of issue can have either a positive or negative effect on collectibility and market value. For example, a mining stock from Colorado would be desirable in any instance, but especially if it is also issued in Colorado. It is common for a stock to be issued in an eastern state such as New York or Delaware, or a Midwestern state like Illinois, even though the mining company is located in Colorado. In short, it is more desirable to have the company’s place of business physically located in the state of issue.

Carrying this analogy further, stocks issued and incorporated under Western states’ laws are more desirable because of their desirability, and market value of collectible stocks and bonds. Contributing to this situation is the fact that eastern materials tend to be found in far greater quantity and more frequently. In fact, Delaware has the dubious distinction of being the state with the most lenient incorporation laws in the United States. Many companies that are incorporated in Delaware actually do not operate in the state, but maintain a small office there for legal and appearances sake only.

Territorial materials, from states of the Trans-Mississippi River West, are highly desirable and are avidly sought after by collectors. Territorial designations were often quite short in duration. Combining that fact with the lure of the West, territorial stocks are quite desirable.

George H. LaBarre Galleries - Collectible Stocks and Bonds

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