Texas Pacific Land Trust (TPL): The Story of Certificate 390

One of my favorite stock market stories involves a lost share certificate.

The Texas Pacific Railway went broke in 1885. To compensate bondholders, some land was put in a trust called Texas Pacific Land Trust

All the bonds were exchanged except for Certificate 390.

It was probably worth a few thousand dollars back around the turn of the 20th century.

The Texas Pacific Trust then found some oil and gas, and managed to distribute dividends and do share buybacks for about a century.

The Texas Pacific Land Trust spun off its oil and gas interests as the TXL Oil Co, which later merged with Texaco.

The value of that missing certificate ballooned. It led to people searching for it in basements/books/archives, but to no avail.

The story appeared in Reader’s Digest and constituted a whole radio program was launched. 

The trust placed all dividends and stock in escrow, while they searched for the owner.

That missing certificate was worth $3.2 Million by the time it was found in Wells Fargo Bank archives by a historian in San Francisco in 1979. It came in a box of documents recovered from a Manhattan subbasement.

It was exchanged for shares of Texas Pacific Land Trust and Texaco stock, which generated $170,000 in annual dividend income then...

By the time it was sold in 1986, the collection of stock was worth $5.7 million.

I've read about the Texas Pacific Land Trust (TPL) for over a decade. That stock has done remarkably well:

Texas Pacific Land Trust is also a dividend achiever with a 21 year track record of annual dividend increases under its belt. It is not a very popular dividend growth stock, which it should have been.

This is a really fascinating story, because it confirms the idea that once you find a good company, you need to just hold on to it and let the power of compounding do the heavy lifting for you. Even a moderate rate of consistent compounding can generate enormous wealth over time. In addition, by holding this certificate in paper form, and losing it, the shareholders weren't going to be able to do something silly, such as selling too early for example. Perhaps it is not untrue that the best investors are dead.

There is another fascinating interplay between this story, the company and legendary investor Warren Buffett. It was the second stock purchased by the then 13-14 year old Warren Buffett. 

These are Warren Buffett's comments about his investment from the 2022 Annual Meeting of Berkshire Hathaway shareholders:

Source: 3:10 Value

You can read more about it here:

1. Washington Post

2. Scripophily

3. Business Insider

4. You may also like this old chart I found from Global Financial Data