Scripophily: The Art of Finance

by Keith Hollender

Published by the Museum of American Financial History. Reprinted with permission.


General background and history


For years stockbrokers (or disappointed investors) accumulated attractive certificates at random. Some became lampshades and others were stored in drawers or attics 'just in case". But Scripophily only began in earnest following the publication in 1976 of two catalogues in Germany listing and illustrating bonds issued by pre-revolutionary China and Russia. The catalogues were the result of doctoral research by two German bankers, Ulrich Drumm and Alfons Henseler.

Some two years later following the formation of the Bond & Share Society and the emergence of specialist dealers, the market got under way. Initially centered in England, early activity was concentrated on Chinese and Russian bonds which since their default had maintained a quotation on the London Stock Exchange. Prices in the collector market moved and matched those on the Exchange and inevitably a speculative interest developed which tended to over-ride the intrinsic qualities of the certificates themselves. Three years of frenetic activity and dramatic price rises were followed by a sharp market correction but by 1982, the publication year of this book's first edition, scripophily was truly horn - euphoria, birth pains and all.


Since 1982 the number of collectors has grown considerably in all parts of the world. This growth continues but still falls well short of the estimated 15-2O million stamp collectors or the many millions of banknote, coin, map and medal collectors. It is this enormous potential which many new collectors find so fascinating. From an initial base of around 300 collectors, estimates now put the figure at over 100,000. This increase has been achieved over only fifteen years and has been accompanied and encouraged by the establishment of many new dealers, auctions and local collectors' societies throughout the world stretching from New York to Australia. A list of major dealers and societies is given on page 152.

The number of publications, both books and magazines, has also increased and several are listed on page 153. But, perhaps of all the reasons for the growth, the most important has been the broadening of the field. No longer do Chinese and Russian bonds dominate the market. The establishment of the hobby in a wide range of countries has naturally led to the growth of local preferences; thus Swiss material is in great demand in Switzerland, early German shares in Germany, Palestine material in the Jewish community, Australian shares in Australia, and so on.

Apart from these localized biases, certain other sectors have risen to rank with China and Russia as internationally" acceptable. The most notable of these is US Railroads. A vast field covering over 9,000 different companies and a time span of over one hundred and fifty years, both share certificates and bonds are extremely attractive, often with vignettes of early trains, stations and the occasional American Indian. The railroads were a major factor in the economic development of the United States and, consequently, it is not surprising that it is this sector which has become especially popular both in America and across the World.

As research goes on, scripophily develops. Still at an early stage in its life cycle, collectors can not only look forward to exciting advances over the coming years but more importantly can participate in that progress.


Most bonds and shares collected today were, at one time or another, quoted on a stock market, whether London, Paris, New York or elsewhere. In the normal course of their life bonds would have been redeemed or cancelled and largely destroyed. Some, such as those issued by US Railroad companies, may have been assumed by other companies through takeover or merger before the end of their intended life, but others were defaulted. A default occurs when the borrower (government or company) fails to meet interest payments and ceases bond redemption. The act of default may not necessarily result in the removal of a stock exchange quotation as it is always hoped that the position will be corrected in the future. Over time several countries or states, legal or otherwise, defaulted on their bonds, thus creating much of the basic scrip of scripophily. Major defaults are summarized in the table below:


Approximate amount

Country/State defaulted

China £60 million (c. $90 million)

Russia Over £1 billion ($1.5 billion)

Confederates States of America $712 million

Mexico $12 million

State of Mississippi $7 million

This list is far from complete and not all the above remain in default. Both China and the old Soviet Union have settled their differences with British bondholders at least (see pages 44 and 64). Certain countries, particularly those of South America have, over recent years, almost wholly cleared their debts as has Bulgaria. An outstanding default restricts a country or company from issuing new paper on certain international markets which provides some incentive to clear past debts.

Although Confederate bonds remain unpaid their stock market quote has been dropped, but this did not happen until the 1890s. The State of Mississippi has been the subject of numerous legal actions, but so far, to no avail. The story is told on pages 86-88.


Before adding some technical background it might be appropriate to identify a potentially confusing language quirk. "Shares" are more usually known as "stocks" in the United States, whereas "stocks" can mean bonds in England (simple really!) To make it easy here bonds will always be bonds and "stocks and shares" will be described as stocks or shares at random!

Collecting bonds and shares necessarily requires a basic knowledge of finance, but the depth of that knowledge is very much up to the individual scripophilist. As a minimum, this is all you need to know: apart from trading profits, a company of whatever size, obtains its finances from two main sources, namely shareholders (the owners of the company) and lenders. The latter may be banks, governments or private individuals, who usually provide funds for a limited period at an agreed rate of interest. If things go badly for the company, the lenders still get paid (unless they go really badly), but the shareholders may well not as they have no guaranteed return on their investment. Conversely, of course, when the company is successful and business is booming the shareholders stand to benefit most as they have taken the greater risk and will reap the larger returns accordingly. Loans to a company take several forms, the most common of which is the bank overdraft, another is through the issue of bonds.

As a general simplification, share certificates are evidence of an individual's investment in the ownership of a company, and bonds are evidence of debt.


The earliest known trading of both bonds and shares may be traced back to the merchants of ancient Mesopotamia, around 2000 BC. The first 'shares" are believed to have been "Temple Days" which were issued in the form of clay tablets and represented an individual's purchase of an annual day of the Temple. The share entitled the owner to all the income arising on that particular day and the share itself could be sold or broken down into fractional periods. A similar system is thought to have existed in Egypt some time later but it was not until AD 954 that varied and active share trading truly began. The location was Amalfi in Southern Italy and the evidence lies in the earliest known written commercial code of the Italian maritime republics - "La Tabula de Amalpha". The code permitted the sale of shares in maritime trading ventures and sales by shareholders to others.

From AD 1100 bond trading became active in the Italian city states of Genoa, Venice, Amalfi and Florence. The bonds which were mainly issued to finance those states were known as "Monti", a format which continued throughout the eighteenth century. Later similar bonds issued with the involvement of the church are known as Monti di Pieta and these date from the mid fifteenth century (Perugia was the earliest dated 1462). Such items are difficult but not impossible to acquire and are sought after by many collectors.

From 1530, Antwerp became the financial center for the merchants of Europe. Its ruler, the Duke of Brabant (who also happened to be King of Spain) built a new bourse and encouraged trading in all kinds of financial instruments through low taxes and minimal regulation. Bonds issued by the Court of the Netherlands, the English Crown and the City of London amongst others were actively traded in Antwerp which soon became the source of funds for the Kings of Europe.

Antwerp's reign as Financial Capital ended in 1566 with the outbreak of civil war and its place was quickly taken by Amsterdam which dominated share trading in joint stock companies throughout the seventeenth century. The Amsterdam Stock Exchange was formed in 1611 hut most of its business was concentrated in the shares of the Dutch East India Company (founded 1602) and the Dutch West India Company (1621).


Following Antwerp's demise Sir Thomas Gresham, who had been Britain's "Crown Agent" in that city resolved to create a major financial center in London and on his return, built the Royal Exchange with that object in mind after raising funds from the 20 senior Livery Companies. The building was completed in 1567 but burnt down in the Great Fire of 1666. The creation of many joint stock companies, including the formation of the Bank of England (in 1694) and the East India Company (in 1600) ensured an active share market and one which proved to be so speculative, controversial and disruptive to other financial activities taking place in the Royal Exchange that the share brokers were expelled from the building in 1696 and forced to continue their dealings in the coffee shops of Exchange Alley ("Jonathans" in particular). It was not until 1773 that a group of brokers acquired a building of their own in Threadneadle Street and so established the London Stock Exchange.

The scandal surrounding the South Sea Company with its eventual collapse in 1720 and the later financial crashes, particularly that of 1825, did little to foster a permanent feeling of confidence. However, such events did finally contribute to a more regulated and progressive market for share trading.

Early American Activity

Share trading in America prior to the Revolution was very limited and largely controlled by the British, Activity in the financial markets really only began with the issue of bonds to finance the Revolutionary troops in the 1770s. Although the New York Stock Exchange was founded in 1792, even by 1820 only 30 different securities were traded there. Immediately following the Revolution, Philadelphia was the country's financial center but by 1790, New York had taken over. During the nineteenth century approximately 250 different stock exchanges were opened (and mostly, closed) across the country.


Many early certificates. whether shares, bonds or other loan documents, were issued 'To Bearer'. This meant that the investment in the company could be sold or passed on to a new individual without reference to the company concerned. Physical possession of the document - assuming it wasn't stolen or obtained by fraudulent means - was all important. This system kept records to a minimum and put the onus of dividend or interest distribution on the investor rather than the company, which of course was unaware of the names and addresses of its financiers. So far as investors were concerned a notable benefit was secrecy; no one, not even the tax-collector, could ascertain a person's investment from a company's records.

This emphasis on bearer shares continued for many years and in some countries, such as Switzerland, is still the norm. Many governments, however, felt the need to tighten up on controls and imposed a requirement for share registration--to the benefit of company registrars!

By now, you will probably have realized the significance of registered versus bearer to the collector. As a bearer share is not issued to anyone in particular it doe not have to be cancelled and re-issued when traded, thus the number of bearer shares is limited to the issue capital of the company, an amount usually printed on the certificates. On the other hand, a registered share must re-registered whenever sold, and the original cancelled or destroyed. As there is no limit to the number of times a share may change hands, there is similarly no limit to the number of certificates which may ultimately exist.

So far as bonds are concerned, most are 'bearer'. They are usually issued by a company or State and may be held by anyone, anywhere in the world (exchange controls permitting). Considerable detail is printed on the document itself giving the investor exact instructions for obtaining interest and eventual repayment of principal. Occasionally, as with the Chinese for example, instructions are printed in several languages. During their life they change hands frequently, and if lost a duplicate may be issued, but clearly identified as such. Thus the number of bonds issued by a particular borrower is known exactly. and because such information is of interest to the investor. it is almost always printed on the bond itself.


The terms 'issued', 'redeemed' and 'outstanding' require some explanation. Reference has already been made to the relatively unchanged mechanics governing the issue and repayment of bonds over the years. Bonds were not only issued in the past to build the early railroads of the Americas or finance Imperial China's balance of payments, they continue to be issued today by governments and companies in even greater numbers-- albeit not so decoratively. Their beginning and end is summarized as follows:

Detailed information on the borrower is prepared and a group of underwriters (usually banks) is assembled. A few of this group are selected as the issuing banks. The bond is then launched into the market.

Bonds are a debt and as such must be paid over a specified number of years, not simply at the end of the borrowing term. This is an important feature and you will understand the process better by studying the small print on a particular bond. All state the period of the loan and also indicate from which year repayment begins, so that by the end of the total period all bonds have been fully redeemed. Thus, after the grace period, there will always be some bonds which are outstanding and some which have been repaid. As time passes, the outstanding bonds diminish in number.

It is the calculation of the number of bonds redeemed which can cause most problems for the scripophilist seeking to ascertain rarity.

There are two alternative methods adopted by borrowers for redemption of bonds. The simplest (albeit least common) is that chosen by the Chinese. In this case a constant percentage of bonds was repaid each year; thus, if the loan was for a period of fifty years and twenty-five years elapsed before default, then it is correct to assume that fifty per cent of the original bonds should have been repaid.

The more usual procedure, however, complicates the calculation. In this case, the total monetary value of the loan including interest is divided by the number of repaying years. The resulting figure represents the amount of money which the borrower must put aside annually in order to meet interest payments and the gradual redemption of the bonds (known as the 'sinking fund'). Unfortunately, this is not as simple as it sounds, for in early years most of the sinking fund goes towards interest and very few bonds are redeemed (similar to a real estate mortgage); as time passes, however, an increasing amount of the principal is repaid but it is a complex calculation to work out the exact number of redemptions at a specific time.

In view of the many potential pitfalls in attempting to accurately determine the number of outstanding bonds of a particular issue, collectors should seek out the detailed stock market records.

One final point on redemption relates to the choice of which bonds are selected for payment. This is often determined by lot and the serial numbers of those bonds to be redeemed are published in the press. Such bonds may be described as "drawn" and this hand written word often appears on those drawn for repayment.


Apart from bonds and shares the scripophilist may come across other financial documents, which may be summarized as follows:{Special Char 183 in Font "Symbol"}

Debentures. Similar in form and function to bonds and always of a limited issue to cover a specific borrowing need. The debenture, for tax reasons, proved most popular with British companies.{Special Char 183 in Font "Symbol"}

Scrip Certificates. Usually these represent fractions of bonds issued either in advance of the bonds themselves, possibly on receipt of a part payment, or to make up a particular investment sum. They are rarely attractive.{Special Char 183 in Font "Symbol"}

Share Warrants. Usually bearer these are similar to shares in appearance but often provided the investor with a fixed interest income and the option to convert to equity at a later date.{Special Char 183 in Font "Symbol"}

Transfer Certificates. Whenever a registered share was sold a transfer certificate had to be completed identifying seller and buyer. Some early transfer certificates can look as good as the shares themselves and it is easy to confuse the two.


Some time has already been spent explaining the difference between bearer' and registered' certificates, from which the reader will appreciate the dangers of forgery in the case of the former. It was primarily for this reason that companies or governments issuing

bearer stock went to great lengths and

____________________________________ expense to deter the prospective forger.


As with the banknotes, the most effective deterrent was a combination of high quality paper, skilled engraving and intricate design. The same companies which printed bank

notes and postage stamps were employed as producers of bonds and share certificates.

Early engraving techniques involved cutting into a copper or steel plate with the use of

tools such as a burin or graver. Skilled engravers knew how deep to cut the plate in order to create different depths of design and perspective. Up to the early nineteenth century copper plates were used which, being softer than the steel plates commonly employed thereafter, had a limited life.

The four names appearing most frequently as printers of certificates are Waterlow & Sons, Bradbury Wilkinson and De La Rue of England and the American Bank Note Company of the United States. From 1858, the latter incorporated seven other American printing companies and in 1879 took Bradbury Wilkinson under its wing, followed by the Canadian Bank Note Company in 1911.

The security printing department of each firm held a number of engravers trained for specific tasks. Highest status was afforded the engraver of portraits, as this entailed the greatest amount of skill and experience. There would be another who specialized in vignette, such as landscapes, buildings, trains and groups of people, and a third who was the letter engraver entrusted with transmitting the name of the company or country, text, and other details.

Some time in the early nineteenth century the American, Jacob Perkins (who later settled in England and formed Perkins Bacon, Crown Agents) invented the transference method of security printing. This allowed for relatively fast production of large numbers of certificates while still maintaining the individuality necessary to prevent easy forgery. Each engraver worked on a separate plate, using up only the area allotted for his specialized task. The engravings on each plate were then transferred to a master plate.

Colors were applied by means of separate plates or by use of the lithographic method whereby a 'stone' is waxed and the areas which will later take the ink are scraped away. Another mechanical process was instrumental in the engraving techniques found on bonds and shares from about the mid-nineteenth century and helped to make forgery difficult, if not impossible. Asa Spencer, a founder of the American Bank Note Company, invented the geometrical lathe for making ornamental borders. By means of discs and gear wheels which moved together, a series of complex patterns were formed by a diamond-tipped point moving over a plate. An infinite variety of settings--and hence patterns--was possible.


Companies or countries normally suggested their own designs, which is why Chinese and Russian bonds and shares look distinctly Chinese or Russian despite the fact that some of the Russian and probably all of the Chinese were designed and printed by western firms. The art departments of security printing firms produced designs for the approval of the client - as well as lettering, these often contained vignettes related to the country, town or organization issuing the certificates. After approval of the design, the artist composed a detailed watercolor to be copied by engravers. Certificates engraved by American printing firms, in particular from the nineteenth century onwards, are characterized by the liberal use of cherubs and pseudo-Grecian mythological figures intermingling with trains and other signs of modern industry.

It is often interesting to compare designs and a self-trained eye can soon begin to spot common features. These features may be the result of a government, such as Russia, wanting to preserve an image of consistency or, as is more usual, a printer using existing designs in different permutations. For example, many of the trains appearing on US railroad certificates reappear on both Chinese and Russian banknotes.

The use of existing part plates naturally reduced the cost of printing but another alternative was also employed for the production of registered share certificates. Not being bearer (and thus less open to forgery), these could be neatly lithographed or printed letter-press, without incurring the cost of engraving a specially designed plate...' as advertised by Waterlow in their General Catalogue of 1912

However, not all bearer material was as carefully prepared as suggested here. There are cases, and the bonds issued by the US Confederacy are prime examples, where scant attention was paid to the dangers of forgery. Out of the 170 or so different Confederate bond types, only four were engraved. Those four are the Tri-value Cotton Bonds of 1863, which were clearly produced in Europe but it is not known by whom. Other Confederate bonds were printed on poor quality paper, which accounts for their often poor condition today. Ten different printing houses were used to produce the certificates in Charleston, Columbia, Richmond and New Orleans.


No certificates are accepted unseen from a printer. No matter how much checking has been done, there is always the chance of a typographical error creeping in and causing untold financial damage to the issuer. For this reason, prior to final printing a small quantity of "specimen" certificates will be produced by the printer for final verification. These items will (usually) be clearly marked "specimens" either by means of overprint or perforated cancellation holes. In some cases they can be further identified by a "0000" serial number.

In recent years, the collecting of specimens, has increased in popularity. They have the advantages of usually being in mint condition and also rarer than the end product. On the other hand they lack signatures, company seals, revenue stamps and lots of dirty thumb prints, all of which contribute to the appeal of the "genuine" share.'


Despite the engravers' efforts there have been occasions, especially in recent years, when the temptation to forge has been too great. Most such forgery concentrates on the live aspects of bonds and shares and because of this (and the sheer physical effort of handling large quantities of paper) stock exchanges across the world have been exploring ways of eliminating the documents themselves and facilitating share and bond transfers through computer databases. Such actions will inevitably increase interest in early material.

As the hobby gains momentum forgeries designed to fool collectors may increase. So far there have been relatively few cases and most "reproductions" are easy to spot and rarely sold in the first instance as originals. Collectors are, however, advised to watch out for the obviously wrong, such as un-watermarked modern paper, lack of embossed company seal, or, even worse, signatures made in biro or felt tipped pen on certificates from the last century!

A recent example of deception concerns shares of Rolls-Royce Ltd., a particularly plain certificate on which some thoughtful entrepreneur added a gold Rolls-Royce!


Those more interested in the work of Renoir or Rembrandt may find the relatively simple graphic art employed in scrip design somewhat lacking in depth. But is it? Commercial art has different objectives and in the case of bonds and shares, that objective was simply to persuade potential investors to part with their money and discourage forgery.

The novelty of industry was portrayed on many early certificates with views of multi-chimneyed factories vigorously polluting the atmosphere for the good of mankind. Such evidence of manufacture was reassuring to prospective shareholders and. for many, a picture of the establishment on a share certificate was the nearest they actually came to 'seeing" their investments. Thus, factories, railway bridges and mine workings were favorite decorations on early share certificates. For certain companies, these signs of property and activity went no further than the certificates themselves, and on more than one occasion investors were encouraged to part with their money through fanciful views of company activity.

It was, of course, inevitable that the contemporary artistic style was reflected in the design of certificates of that period. For some countries contemporary art was of paramount importance, others took a more pragmatic view. British certificates, for example, have been consistently plain with few frills. US railroad bonds have concentrated on locomotive vignettes, whilst others, particularly French certificates of the 1920s, are of clear 'art nouveau' derivation and display a marked preference for scantily clad maidens irrespective of the true company activity. Some shares, were actually designed by well known artists, such as those of "Paris France" by Alphonse Mucha. Indeed most French material is extremely ornate, as are also many of the Spanish and Italian shares.

Art Nouveau was superseded by Art Deco in the late 192Os and certificates of this period and style are keenly collected, often commanding high prices. Many examples can be found amongst French, Spanish and German shares.

But art takes many forms, and precise design work can be as pleasing as the most elaborate images--both have the advantage of making the forger's task that much more difficult. The portrayal of a naked lady on a recent Playboy Enterprises share certificate can hardly be considered a cultural contribution. hut it nevertheless displays the company's 'product' as succinctly as a smoking chimney describes an active factory (see page 26).


History and art are as much a part of scripophily as economics. Just as finance has played its part in history since the beginnings of trade, so scripophily gives us the opportunity to view that involvement through the financial documents themselves.

There are perhaps (and no doubt someone will disagree) 5 clearly defined periods of world economic development:

1. Early and primitive commodity trading.

2. The establishment of the Trading Companies in the 16th and 17th centuries.

3. The Industrial Revolution of the 1780s.

4. Railway construction from the 1830s.

5. The marketing and technology age of the 20th century.

So far, scripophily has not embraced the first period, largely due to lack of research and readily available material. It does however come into its own with the early trading companies of Holland, Britain and Spain. Certificates from these companies are 1)0th rare and expensive and apart from those from Spain, rather plain in appearance.

Most of the material collected today post-dates the Industrial Revolution which may be regarded as the starting point for the formation of so many major industries now taken for granted. Many of these industries were of such a size (iron and steel, canals, railways, etc.) that they could only be financed by the joint efforts of many investors rather than the lone entrepreneur. The establishment of an increasing number of companies resulted in the creation of share certificates of all kinds and their survival today provides the basis of scripophily.

Whereas most collectable material originated as a result of the formation of commercial enterprises, some had other objectives such as the funding of the Red Cross, the American Revolutionary Army, the American Civil War and even the beginnings of Israel. Some are a reminder of countries whose independence is no more.


Following the eventual defeat of the Spaniards in Texas in 1836 a republic was founded led by Stephen F. Austin. The Texans original objective was to join the United States, but it was not until 1845 that this was achieved, during which time the State operated as an independent country. Nowhere is this more clearly highlighted than in the bonds issued to finance its development. Many were signed by Austin and bear the famous Lone Star symbol. Several issues were denominated in £ sterling as well as US $, indicating the close economic links with Britain which were encouraged by the State as a means of applying political pressure on the United States.


The first shot was fired on 12 April 1861, when Southern troops under the command of General P. G. T. Beauregard, one of the most flamboyant characters of the war and whose picture featured on two Confederate bond issues, launched their 40-hour bombardment of Fort Sumter, Charleston. But it was not until 21 July that the two armies met at Bull Run for the first major engagement.

Bull Run was a disaster for the North and their performance over the next two years was little improved. Major reasons were lack of military leadership and an unfounded overconfidence at the outset. Both sides felt the war would be short-lived and neither called up troops in sufficient numbers. The North frequently enrolled men for 90 day stints, and pay was invariably late. Some Northern (Union) bond issues were used to provide financial incentives to volunteers, for example, the State of New York 7% loan, "Payment of Bounties to Volunteers". But despite the ingenuity and military skill of the Confederate General, Robert E. Lee, the North's superior resources of men and materiel eventually triumphed on 9 April 1865 when Lee was surrounded and forced to surrender by General Ulysses S. Grant at Appomatox Court House. Within one month the war was ended.

The lack of financial independence of the Confederacy resulted in the need to raise large foreign loans. The endless demand for cotton, in Britain and France in particular, made the raising of such loans feasible as many were guaranteed against cotton bales. Some, such as the 1863 loan of £3 million, were even denominated in cotton effectively incorporating a futures contract. Some £800,000 of these bonds were redeemed against cotton during the war, and subsequently destroyed, but when the Confederacy collapsed in 1865 the bales set aside as security for the balance were seized, sold or burnt by the victors. The amount of money borrowed and eventually defaulted by the Confederate States was enormous, with one issue alone exceeding $147 million.

The history of the occasion is further emphasized by the portraits displayed on the bonds themselves. Most Confederate leaders are depicted on one or more issues. As well as such notables as General 'Stonewall' Jackson and President Jefferson Davis, the whole political cabinet got coverage (bond numbers refer to the Criswell catalogue; see bibliography).


Jefferson Davis President 4, 85, 86, 95,125

Alexander Stephens Vice-President 70,123

Robert Toombs (Georgia) Secretary of State 37

Christopher Memminger

(S. Carolina) Secretary of the Treasury59, 84, 87, 88, 92, 97, 98,102,110,111,124

L. P. Walker (Alabama) Secretary of War 21

Stephen R. Mallory

(Florida) Secretary of the Navy 33, 34, 40, 663, 67, 89

John H. Regan (Texas) Postmaster General 36, 62, 101

J. P. Benjamin (Louisiana) Attorney General 31, 43, 57, 60, 61, 65, 71, 75,100

Later cabinet reshuffles resulted in J. P. Benjamin becoming Secretary of State and George W. Randolph Secretary of War (bonds 422, 64, 68). Not only were Confederate celebrities portrayed, but also the famous founders of America. George Washington figured prominently on many issues, and even Benjamin Franklin and John C. Calhoun made their appearance--the objective being to convince foreign investors of the legality of their cause.


On the other side of the Atlantic and over thirty years later, another cause began to surface and was reflected by an interesting share issue.

The Jewish Colonial Trust formed in 1899 represented the aspirations of the Zionist movement led by Dr. Theodor Herzl towards establishment of a Jewish state. It was intended to be the financial arm--a sort of Jewish East India company--to gather money for building industries, railways and the buying of land in Palestine. The Jewish Colonial Trust, chartered in London, arose out of the first and second Zionist Congresses in Basel which decided to create an independent financial institution ' develop colonization, the natural resources, industries of the country and to create working opportunities'.

By 1956 there were over 100,000 shareholders; how-ever, the institution seems to

have been more enthusiastically received among the poor than the rich and this may be one reason for its failure to achieve its original aims. Even an early supporter of the Trust, a Dr. Gaster admitted that they were merely building the first rung of the ladder. Did anyone imagine that the whole of Palestine could be bought for £2 million he asked rhetorically? 'Not for £100 million could one buy that land.' He said that he would welcome the rich and that they were wrong to work against the Trust. It had been called a trust, he said, because the money of the Jewish nations in Europe would be kept in trust for the Jewish nation in Palestine.

The Trust may not have been the main instrument in the formation of the Jewish State as it wished, but it did at least have one major achievement. It led to the creation of a Jewish bank, its present-day successor being Bank Leumi.