A Pictorial History of Municipal Bonds
Sylvan G. Feldstein, Ph.D. Director, Investment Department Guardian Life Insurance Company of America
Peter O’Brien Manager, Investment Reporting Guardian Life Insurance Company of America
In Chapter 44 municipal bankruptcies and bond defaults were discussed. In this appendix, we highlight with pictures some of the more colorful and interesting bond defaults as well as representative municipal bonds that have been issued over the years, going all the way back to Colonial times. These bonds are known as bearer bonds; since the early 1980s bearer bonds cannot be issued.
Because the defaulted municipal bonds, becoming worthless, were not physically cancelled or destroyed some of them have survived. Over time, the original owners gradually parted with them and they were bought and sold by coin and “paper money” dealers. The value was usually determined by the detail and beauty of the vignettes. Their scarcity and level of engraving were also critical factors in determining value. In this market, the fact that they were municipal bonds was largely ignored.
Bonds and coupons shown in this appendix are from the personal collections of the authors. Historical sources for this appendix include: A. M. Hillhouse, Municipal Bonds (New York: Prentice Hall, 1936); George H. Hempel, The Postwar Quality of State and Local Debt (New York: National Bureau of Economic Research, 1971); William A. Scott, The Repudiation of State Debts (New York: ...