1968 Penn Central RR Two Piece Stock Set and Check from First Dividend Payment

Description

Pennsylvania New York Central Transportation Company
Two Stock Certificates & First Dividend Check Set
1968 Penn Central Railroad Original Issue Type Stock Certificates
The Pennsylvania New York Central Transportation Company
In this lot you get a two color set of the first Penn Central stock certificates. Printed by the Security-Columbia Banknote Company between January and May of 1968, these crisp engraved certificates were the first issued by the newly merged Pennsylvania Railroad and New York Central Railroad companies. Following the corporate renaming in May of 1968, existing supplies of these certificates were overstamped and used until exhausted, early in 1969. Also included is a check from the first stock dividend payout of March 1968.
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In this lot, you get:
One stock certificate in blue for 100 shares
Cox Catalog number: PEN-535-S-61 ic
Condition: Fine
One stock certificate in brown for less than 100 shares
Cox Catalog number: PEN-535-S-60 ic
Condition: Fine
One Penn Central dividend check from the first payment of March 29, 1968
Certificate features: Pennsylvania 1846 incorporation date, par value. Facsimile signatures corporate officers. Hand signature transfer agents.
Formed on 1 February 1968, the Penn Central promptly went bust in June of 1970. Among the myriad of reasons that it died such an early death was the .8 million in dividends that it paid out over its short life.
Not one single solitary penny of those dividends came from profits - becasue the railroad
never earned
any profits; it was nearly bankrupt from the beginning. Indeed, on the day that the New York Central Railroad and Pennsylvania Railroad formally merged, the combined company - with nearly 100,000 employees and operating over 20,000 miles of track - had only .3 million in cash on hand. And yet, as the check above shows, on March 29th 1968, barely eight weeks later, the Board of Directors sent the shareholders a dividend payment of 60¢ a share - all from borrowed money. Dividend payments for that year alone would cost the company  million.
For the technophile, you'll note that the dividend check was issued in the form of an IBM punch card. In spite of allegations that the railroad was a hidebound institution married to outdated methods, the PRR had adopted computerized accounting as early as 1960.
In May 1968, the Directors voted to change the official (and unwieldy,) name of the company to that of its trade name, the Penn Central. This was done to simplify matters and shift the emphasis away from transportation. Soon after, a formalized corporate structure was introduced that made the Penn Central Company into a three tiered holding company. At the top was the Penn Central Company which held the Penn Central Transportation Company, (the railroad, a.k.a the PCTC,) and the Pennsylvania Company (Pennco) which was a captive mini-conglomerate that held interests in real estate, pipelines, and a small air transport company called Executive Jet Aviation (Please see my other auctions for stocks and bonds from Pennco).
Printed on certificate bond paper, this set is crisp and clean. It has an allegorical vignette of Mercury astride all the fields the Penn Central was trying to be involved in. After the collapse the joke was that Mercury was running away from his creditors. The punch-card type dividend check is in green with a background motif of the company's "mating worms" logo. In all, it's a nice set with an interesting history!
An example of the vignette -
This item was hand selected for its display quality from among literally
thousands
of certificates and is nothing like some of the dreck that you'll find on eBay.
Names and dates will vary - but the Quality, will not! ---
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As per eBay rules: These obsolete stocks, bonds and financial instruments, are sold as collectibles
only
. Unless otherwise stated, each item has been punch and/or stamp cancelled. Again, unless otherwise stated, all items will grade at FINE or better. Illustrations provided for reference only; except where noted, actual items may vary.
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