Finding out whether an old railroad company bond from 1938—or a bond from any company of that vintage for that matter—still has any value is a tough question to answer. You will have to check the terms on the bond and check if the issuer is still a functioning business. If not, you still may have some options to find some value in what you own.
So the short answer is that it will require a person to do some homework or spend money on a search service to find out.
- Say you found an old bond certificate from a U.S. railroad company issued before World War II.
- Chances are the issuer of the bond no longer exists! (Although it could.)
- But the bond may still have collectible valuable even if it is not redeemable as a valid debt instrument.
- Do your research, but keep your expectations in check.
Do Appropriate Railroad Bonds Research
The first step would be to contact your broker to see whether they can obtain more information about the company that issued the bond. Keep in mind that brokers typically have access to tools that most of us do not, including Standard & Poor's corporation records, and similar types of resources. The bond should have a serial number and other markings that can help identify it.
At the same time, consider doing an online search of your own. Try search engines such as Google. Was the company taken over? Did it go bankrupt? If you're lucky, the search will provide the new company's name, address and contact information.
Beyond that, your local library or the state in which the corporation operated may yield additional information. Try contacting the Department of Commerce or the corporation commission in the state that is listed on the bond. If nothing else, these organizations should be able to point you in the right direction.
Use a Stock Search or Collectibles Service
If all else fails, there are services out there such as Arizona-based Stock Search International that charge between $40 and $85 for access to their corporate databases, or to initiate new research about a company on your behalf.
Also, keep in mind that the bond may be a collectible and have value even if it can't be redeemed. To that end, check out Scripophily.com to see whether the security has some collectible value. You might be surprised.
With all of this in mind, remember that spending money involves risk because you may discover that your bond is worth little more than the paper it's printed on.