how did bearer bonds start out?

Question

do bearer bonds just begin as bearer bonds, start out as a check, or what?

Answer 1

Bearer bonds started out as IOUs issued by large banks and merchant houses (which often were the same). There is some evidence that they were used in ancient Rome; they were definitely used in medieval Europe...

Answer 2

A bearer bond or bearer security is a certificate that represents a bond obligation of, or stock in, a corporation or other intangible property. It has been illegal to issue bearer bonds in the municipal or corporate markets in the United States since 1982. Wyoming and Nevada still allow them, however their typical uses of shifting ownership to avoid legal obligations run afoul of tax rules.

It is different from normal stock in that no records are kept of the owner, or the transactions involving ownership. Whoever physically holds the bearer bond papers owns the stock or corporation. This is useful for investors and corporate officers who wish to retain anonymity. The downside is that in the event of loss or theft, bearer bonds are extremely difficult to recover. In Central America this is typically the standard procedure for owning and running companies.

While bearer instruments are rarely created as such, a holder of commercial paper with the holder designated as payee can change the instrument to a bearer certificate by an endorsement. The proper holder simply signs the back of the instrument and the instrument becomes bearer paper. This is most often done with negotiable instruments such as promissory notes or checks. Great care should be taken with the security of the endorsed instrument, as it is legally almost as good as cash. Signing a false name or forging an endorsement is criminal fraud.

Years ago, when you bought stock in a company, you used to actually get a stock certificate that stated how many shares you owned and who owned them. I honestly have not seen a stock certificate in probably 30 years or more.

Bonds were the same thing. You actually got a bond. A bearer bond was different in that it did not have the name of an owner on them, thus the name "bearer". Whoever physically had the bond could cash it when it matured. I do not know when they started, however.