Written by Webmaster of the IBSS Website   
We are reporting what must be a scripophily record for both eBay and Mexican scripophily.  On November 24, 2009 dealer Mario Boone sold on eBay for $60,100 a Mexican Government bond described as “Republica Mexicana, bono del tesoro del gobierno federal de los Estados Unidos Mexicanos, 6% oro 1913, gold bond of £100 = 2045 RM = $mex 975” (listing no. 130345442061; illustrated on the cover).  The sale was on commission for one of his clients.



The bond was printed by the American Banknote Co and bears serial no. 11937 and an imprinted British 1 Pound revenue stamp.  The bond had 18 original coupons attached.  It is dated in the text June 8, 1913 and is denominated in 5 currencies.  The bond is issued with unclear signatures (E Suarez? and AM Ureste?).  Boone has not researched the signatures, but there is no evidence they have any significance as collectible autographs.
According to Boone, “The Mexican bond I sold [November 24 2009] on for a good $60,000 was a true sale – the buyer already paid. Clearly, speculation for these bonds is huge although most other types sell for $400-$2,500. I don't know much more except that the bidders and buyer are Mexicans. Whether it's a fraud or some guys make claims on the government, or whether the government has decided to refund, I have no idea (yet). What I do know is that the normal collector value for these pieces is way below what is being offered now, so it’s a great, possibly once-in-a-lifetime selling opportunity for the collectors of Mexican government bonds.”


An analysis of the bidding history for this incredible sale shows 55 total bids, divided among 8 individual bidders.  The lot started at $499 on the first day of the seven-day listing and gradually increased in several hundred dollar increments until reaching $5100 at 8 seconds before the end of the seven day listing period.  Then the sniper fiesta began.


“Sniping” is slang English for placing bids in the last few seconds of an eBay listing.  The theory behind this practice is that placing earlier bids might stir up the competition and reveal your bidding strength.  In the last few seconds of the listing the sniper zaps the other bidder(s) by placing last minute bid(s).  Sometimes, however, sniping programs fail and the bid does not go off – so you can risk losing a valued piece.
Sniping is generally done through automated programs that are not part of eBay, for example services offered by  Each of the five snipers on this lot may have expected that they were going to fool the competition, but they were going to be disappointed.  The competition already was buzzing like a hornets’ nest. 


16 bids were placed by five individual bidders in the final eight seconds of the listing, driving the price up by $55,000 to the final winning bid of $60,100.  How much of these increments were effected by someone actually pushing a button is unclear.  The bid sniping programs are completely automated, especially if multiple snipes are entered by the same person.  The danger for an over-enthusiastic sniper is that his “crazy” bid might be slightly underbid by one from another sniper, and he won’t know until he’s already bought the piece.  Boone received payment, so this was not a sniping fluke.
What can we tell about the buyer and underbidders?  The bidding process is comparatively transparent.  Using eBays anonymous bidder designations, the five bidders were 1***p (425), 1***7 (2), a***e (11), 2***5 (private), c***c (-1), and r***5 (7).  The numbers in parentheses are eBay’s report of the number of prior closed eBay transactions of any sort by each bidder.  However, eBay bidders have a history of registering under new names, so while a large number of transactions are instructive, small numbers may or may not mean the bidder is new to eBay.


Bid details on winning bidder 1***p reveal that this person has purchased only 3 items in the last month, and all were sniped. No other information is revealed by eBay. While this bidder had 425 prior eBay transactions, it is not possible to determine if those purchases were scripophily. Boone advises that “the buyer confirmed afterward he is happy with the price”.


The eBay 30-day histories for these bidders showed that only 3 were buying scripophily exclusively.  Bidder 2***5 was bidding on Mexican stamps and r***5 was seeking everything from cell phones to books, but mostly south and central American material.  However, it is common practice for experienced eBayers to register under new names, so we cannot conclude one way or the other that the underbidders were experienced scripophily collectors.
It is theoretically possible for manipulators to send false price signals on eBay.  A headline collusive sale between an “inside” consignor and “straw” buyers could make quite a splash and cost the consignor only the price of the consignment.  However, Boone reports that “the consigner most certainly didn't know anything about this Mexican speculation. I’ve known him for years and he is reliable”.  Accordingly, it appears that this was a bona fide sale.
Boone reports having seen about 5 of the bonds in question, but this was his first sale of this bond type.  The most recent appearance was in Spink sale of October 29, 2009 lot 1 where a mixture of Mexican pieces, including this bond, sold for £1200.
The price makes this the 16th highest dollar price ever for any scripophily at auction worldwide.  According to our records, no. 15 is a Standard Oil first issue 1870 signed twice by JD Rockefeller and no. 17 is a 1901 US Steel Corp. bond #457 signed by Andrew Carnegie.


The circumstances bring to mind the incredible prices achieved by US railroad gold bonds in the late 1990s using ‘valuations’ based on a century of accumulated interest and gold price increases (or dollar depreciation, if you prefer). Then, as perhaps now, the ‘secret ingredient’ is that the text on these bonds states they are redeemable in gold and the examples in auction were not obviously cancelled.  Of course, the price of any scripophily is what a willing buyer will pay at any instant in time.  We are all aware of the rarity of most scripophily, with a population of 5 being fairly ordinary.  We are also aware that it is common for such rarities to bring only a few hundred dollars.  So, when at least two highly determined bidders pursue such items, anything can happen.


The boom in vintage Mexican bonds is not limited to this exceptional sale.  Recent auction prices have reached more than €1,000 including premium ($1,500), taking the auction houses by surprise.  For example in November 2009 a United States of Mexico 1904 4% $1,000 bond in English and Spanish sold for €950 plus premium from a start of €200, and a República Mexicana 1899 ‘Bono de la Deuda Consolidada Exterior Mexicana’ 5% £500 (illustrated) reached €975 (start €400). The HWPH mailbid November 2009 sold the following Mexican government bonds: 1904 4% $500 start €100, hammer €625; 1899 5% £100 start €100, hammer €700; 1910 4% £20 start €40, hammer €325.




Following is a sampling of Mexican government bond sales on US eBay since late October:  1913 6% £20: once at $1525 and once at $1950; 1910 4% £20: lot of 3 : $1405, another lot of 3: $1200, one piece: $610, one piece: £225; 1899 5% £20: £245 and $610; 1908 lot of 2 different bonds: £205 + £102,5 $610; 1904 £205 $2095.  As we go to press, 14 Mexican Government bonds have been newly listed on eBay, and it is safe to say they will be followed by many others.
Significantly, there has been little interest in the well known Mexican government bonds from the 1880s. This, and the relatively modest price of the 1913 6% £20 compared to the 1913 6% £100 suggests that the price explosion is driven by a substantial amount of redemption speculation.  If so, past history suggests that this, once again, is “hope springs eternal”. 
Even in the rare instances where governments have honoured ancient debts (such as Russia in France in the 1990s), the payoffs did not reach the speculative prices the bonds brought in the collector market frenzy.  And the payoffs are very rare and usually the result of unusual political and economic factors.  For example, in the early 2000s American Bondholders LLC pressured the Chinese government to redeem about 18,000 Chinese Government 5% reorganization gold bonds of 1913.  They appear on eBay on a regular basis, offered at fixed prices (not exposed to auction) ranging from about $300 - $1500.  However, the American Bondholders website has not had much activity since about 2006 and we are not aware the group has been successful in obtaining any relief from the Chinese despite lawsuits, complaints to the SEC and Congressional resolutions. We are unaware of any events in the Mexican economy or government that would support a move to monetize these bonds.


We have previously noted substantial prices for certain Brazilian Government bonds issued in sterling, in excess of $1000 for what had been relatively inexpensive items in the collector market.  According to Mike Veissid at Spink, “The holders of the bonds take the Government to court for repayment. Apparently as soon as a company or individual get into litigation with the Government their taxes are put on hold. Just imagine if a large company in Brazil that pays taxes at several millions of dollars can get a hold on their tax payments for a few years. Although they have to pay in the end the interest they can earn is well worth it”.  Mario Boone concurs, and adds that “years ago, Brazilian bonds issued in French francs were also wanted for this reason but apparently a court action ruled out all 'French' bonds”.
The strange goings-on have not been limited to Mexican government bonds. An uncancelled $1000 gold bond of the Institution for Encouragement of Irrigation Works and Development of Agriculture SA (MX) (item no. 360190411083) purportedly sold on US eBay August 23, 2009 for $910 in a bidding war.  This also was a contest between apparent newcomers (only 15 and 51 transactions each).  But apparently the same bond (same serial number) was relisted by the same seller and did not sell.  It was relisted again and finally sold for $799 on eBay US in Sept. 2009 (the underbidder from the first “sale” bought it).  This series of transactions suggests that the price support for Mexican bonds, while enthusiastic, may be thin.
Is this good for the hobby?  Past examples of these booms, starting with Chinese bonds 30 years ago, have been followed by crashes.  Collectors who bought and sold opposite to the market did very well.  And it certainly does not hurt to have some fresh capital move into the field, along with some potential publicity as well. If this high-selling bond is to become scripophily’s 1913 Liberty Nickel, so be it, although it would be better if, like the nickel, only five existed.  Unfortunately, the downdrafts following these booms can suck budding scripophilists down with them, which has been unfortunate for the hobby.  This, of course, is only history, and no one can foretell the future.


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