Definition
Scrip is a certificate or written instrument evidencing a right or entitlement, most commonly used in one of three financial and property contexts:
1. Corporate scrip. A certificate acknowledging that the holder is entitled to a specified number of shares in a company or a portion of a company's profits. It is an intermediate instrument — evidence of a right to receive shares rather than the share certificate itself. Projectors of a new company or issuers of a loan commonly issued scrip certificates to subscribers pending the formal allotment of stock.
2. Dividend scrip. In American usage, scrip sometimes denotes a substitute for a cash dividend, representing a promise to pay at a future date, typically out of anticipated earnings. This usage is distinct from the share-entitlement sense and arises when a company lacks current liquidity to distribute cash.
3. Land scrip. A government-issued certificate entitling the holder to claim or take up a specified quantity of public land. The holder presents the certificate in lieu of purchase price when locating a land claim. Land scrip was issued under various federal programs and appears frequently in nineteenth-century public land records and litigation.
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Common Language
Modern common usage (Wiktionary): A share certificate.
Historical common usage (Webster's 1913): A small bag; a wallet; a satchel. [Archaic]
The modern common definition (share certificate) aligns closely with one legal meaning but collapses an important distinction: in legal usage, scrip is specifically a preliminary or substitute instrument evidencing the right to obtain shares, not the definitive share certificate itself. A researcher who treats scrip and stock certificate as synonyms in historical records will misread the instrument's legal effect and the holder's actual position at the time.
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Recognized Forms
/SUBTYPES
Scrip appears in legal sources in at least three recognized forms:
- Scrip certificate (corporate): The preliminary certificate issued to a subscriber or loan participant acknowledging entitlement to shares or a fractional interest. Superseded upon formal allotment by the full share certificate.
- Dividend scrip: A deferred dividend instrument issued in lieu of cash, payable from future earnings. Raises distinct questions about when the obligation matures and what priority it holds in liquidation.
- Land scrip: A government warrant or certificate entitling the named holder or bearer to locate and claim a tract of public land of specified acreage. Often transferable and traded in secondary markets during the public land era.
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Why It Matters in Research
The term scrip is a trap for the unwary researcher in at least three respects.
First, bearer versus named instruments. Historical scrip certificates varied as to whether they ran to a named individual or to the holder for the time being. This distinction determines negotiability, who can enforce the right, and how title passed. Sources from the mid-nineteenth century onward frequently note that scrip "more commonly" ran to the holder, but earlier instruments and land scrip often named the original grantee. Read the instrument carefully — the corpus will surface both forms.
Second, the corporate scrip / share certificate distinction. In English company law sources and American cases tracking that tradition, scrip precedes the definitive share. Disputes arose over the rights of scrip holders during the interval before allotment — particularly on insolvency of the issuer. If a historical source discusses the rights of "scrip holders" separately from "shareholders," that distinction is doing real legal work, not merely using synonyms.
Third, land scrip generates an entirely separate body of law. Federal statutes authorized multiple categories of land scrip (agricultural college scrip, military bounty land warrants, private land claim scrip, and others), each with different location rights, transferability rules, and expiration conditions. A nineteenth-century case citing "scrip" in a public lands context is almost certainly not about corporate securities. Cross-referencing with the public land entry points in the corpus is essential.
Jurisdictional dating matters here as well. The corporate scrip concept was imported heavily from English company law practice and appears prominently in treatises and cases from roughly 1840 to 1900. As formal securities regulation developed in the twentieth century, the word largely dropped from statutory vocabulary in favor of more precise instruments. Researchers encountering scrip in post-1930s materials should verify whether the usage is archaic quotation, specialized financial usage, or a surviving statutory term (as in some land scrip statutes that remained operative well into the twentieth century).
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Historical Dictionary Support
Bouvier and Black's (both editions) are in close agreement on the core meaning: scrip is a certificate or schedule serving as evidence of the right to receive shares or to participate in a company, as distinguished from the definitive title itself. Bouvier adds the dividend-scrip usage explicitly and flags land scrip as a distinct category with its own body of authority. Black's both editions follow Bouvier's structure closely.
Rapalje & Lawrence's surviving excerpt does not address scrip directly; the relevant portion of that source covers adjacent forest-law terminology, suggesting either a gap in the entry or a volume organization that places scrip elsewhere.
Anderson's Dictionary of Law similarly does not return a substantive scrip entry from the available excerpt — the text provided relates to scire facias, not scrip — so that source cannot be synthesized here.
What the historical dictionaries collectively underemphasize is the trading of scrip in secondary markets, particularly land scrip, which was bought and sold at discount and generated significant litigation over validity, fraud, and priority. A researcher relying solely on dictionary definitions will underestimate how commercially active scrip instruments were and will miss the fraud-related case law entirely.
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Jurisdictional Note
Land scrip law is predominantly federal in origin, governed by the statutes authorizing each scrip program, but questions of transfer, fraud, and location rights were frequently litigated in state courts applying both federal statute and local property principles. Corporate scrip, by contrast, was largely a matter of state corporate law, with variation across early-chartering states. English sources and American sources track each other closely on corporate scrip through the mid-nineteenth century but diverge as American state corporate statutes matured independently.
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Encyclopedia Cross-Reference
See Law Mind Encyclopedia: Securities and Stock Certificates; Public Land System and Land Grants; Corporate Finance Instruments
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