By their very nature, stocks and bonds are more often than not found in a state of cancellation. A variety of methods were employed over time to cancel certificates, thereby indicating they no longer hold negotiable value. Among the methods used were:
Stamps of varying colors and sizes
Each type of cancellation may manifest a wide range of visual appearances, some of a relatively minor detracting nature to those which are very visually unappealing. As a result, the degree and severity of the same method of cancellation employed may vary substantially from certificate to certificate. To the extent that a certificate is heavily cancelled, its grade may be lowered.
Factors and Considerations
Many factors are taken into consideration when grading certificates. Many of these considerations are reflected in the final grade applied to a piece. Some are considered primarily for their importance to the overall eye appeal of an item. These factors include the following:
Condition of the paper
Paper loss – i.e. at fold intersections, edges, etc.
Insect or vermin damage
Natural Defect re: hole in vellum
Contemporaneous ink spot
Strength of ink
Strength of printing text and vignettes
Extraneous bleed-through (show through) of inks from writing on verso
Stamp or glue residues
Unsightly stamps, or cuts such as those on checks, receipts, etc.
Other people\’s endorsements
Graffiti – handwriting accomplished on an item which has no relationship to its history.
A WORD ON RESTORATION
A common practice for decades has been the restoration and repair of historical documents of all kinds. Restorations may be encountered in varying states of quality. Many have been accomplished by trained professionals, others have not. The degree and quality of any restoration, if present, will normally have an effect on the overall assigned grade of the certificate.
Poor (P) This would be a certificate that is essentially uncollectible except in the case of rarity or historical importance. For pieces that are routinely or occasionally available this would be an unacceptable example. Certificates in this grade would exhibit extreme problems. Writing on the certificate may be extremely faded or illegible due to light exposure or other factors. The certificate may exhibit damp-staining, severe water damage or other extreme staining. One quarter or more of the certificate may be entirely missing. This certificate would primarily be collectible only in cases of extreme rarity.
About Good (AG) While better than a certificate rating Poor, this would be an example which would normally be collectible because of rarity or historical importance. For pieces that are routinely or occasionally available this would likely be an unacceptable example. The certificate may exhibit paper loss, dampstaining, fading, severe folding and tears. The certificate may have large pieces missing and possibly rust stains from paper clips — though not to the extreme degree of an example which would grade Poor. May contain large, bold cancellation(s) or transfer block rubber stamps over the face. Vignette may be obliterated by cancellation(s).
Good (G) This certificate will have a number of problems from very moderate to heavy staining, paper loss, tears, edge chinks and other problems. May have significant wrinkling or soiling as well as numerous folds with damage and/or discoloration. A corner or corners may be missing and/or it may be trimmed into the border design. Writing on the reverse might cover the entire back of the certificate. Vignette might not be clear, with written cancellation(s) superimposed over the top.
Very Good (VG) This certificate may display some minor staining, discoloration or other minor problems. It may display significant wear and folds. May have small marginal edge chinks or tears. Also may have weak folds and staple holes may be present. Will have reasonable eye appeal regarding overall condition. Overall a collectible example at the lower end of the desirability scale.
Fine (F) Displaying normal characteristics of some use such as light creasing or folds. May have a couple of small pinholes. May display some minor discoloration or a few minor edge tears at fold ends. May have some light smudging or surface soiling. Staple holes may be present. Light writing on the verso. Vignette should be clear of all obstructions. This grade is representative of an average certificate.
Very Fine (VF) The paper retains some of its original crispness with some light edge wear and perhaps light smudging in upper right corner from counting or handling. May have a slight separation at the margin of a fold or two. Staple holes may be present. Some minimal soiling may be present. Extremely Fine (EF) A certificate which will display light evidence of usage. May have a couple of folds but the paper remains crisp. This certificate would remain largely free from any tears, staining or forms of discoloration. A few light staple holes may be present though not exhibiting rips and tears. Vignette remains sharp.
About Uncirculated (AU) A fresh, clean certificate with crisp paper. Printing remains bright and clean. Free from soiling, edge tears, staining, discoloration or any other defects. This would be an example that would be held back from a higher certificate uncirculated (CU) grade because of a few staple or pin holes or a very light crease. May have a couple of minor corner folds.
AN IMPORTANT NOTE:
Stocks and bonds were customarily folded for storage and delivery through the mail and otherwise. As a result, certificates are, in the majority of cases, encountered with some degree of folds. This alone should not keep a certificate from being graded as About Uncirculated.
Certificate Uncirculated (CU) A certificate free from any defects. The paper remains crisp as printed. Printing remains bright and clean. No corner folds or creases exist. May have one or two staple or pin holes. As it was often a practice of individuals to contemporaneously pin or staple certificates together this alone would not hold a certificate back from the lower end of the numerical scale for this grade. It should, however, be noted.
A SPECIAL NOTE ON LARGE FORMAT BONDS:
It was a common practice for larger format bonds to be uniformly folded following their printing. As a result, many of these bonds have never been unfolded until just prior to being graded. Many remain in a truly uncirculated state but for these folds.
Originial State Uncirculated (OS)
This grade is reserved for those certificates which remain as printed, in pristine condition without folds. The paper will remain crisp and the certificate will remain as it left the press. It will remain free from any trimming, handling marks or other defects. This grade represents the finest condition certificates available. The certificate should be absolutely mint, with no signs of circulation whatsoever. It will remain free of any folds, staple marks, bleaching or processing of any kind. A certificate receiving this grade will exhibit sharp printing and remain free of any edge wear or discoloration.