Shaky Economy Often Leads to Devaluation

Question: In a recent column, you used the word demonetized . I am an experienced collector, but I do not understand this term. Would you explain it?--W.C.P.

Answer: Demonetization is the official governmental fiscal deprivation of the standard value of a medium of exchange. In common language, that means that money (or stamps) are no longer worth the face value that they had when issued.

Shaky economies in some countries often lead to debasing or revaluing of the paper money. For instance, rampant inflation may make money practically worthless. So the government announces that 1,000 of its currency, say pesos, will henceforth be known as 1 “New Peso” and that, after a certain date, all the old currency that hasn’t been exchanged for new money will no longer be honored.

In the United States in the last century, our Post Office Department demonetized pre-Civil War stamps of the 1851 to 1860 designs so stamps then in the hands of Confederate postmasters couldn’t be used in some way to disrupt the commerce of the Union states. Perhaps Southern spies might have infiltrated business houses in the North and sold them U.S. stamps at a discount (stamps that were sitting in Confederate post offices after secession), thereby depriving the Federal postal service of revenue. The beautifully engraved and quite valuable 1847 first issues (5-cent Franklin and 10-cent Washington, our first “General Issue” adhesive stamps) were similarly declared invalid for postage as of July 1, 1851, when the 1851 to 1860 definitive series began. It is still against the law to use a lot of pre-Civil War U.S. stamps for mailing letters, but for large-margined pristine specimens, if any can be found in 1990, the philatelic and market value is astronomical.

Q: As an insider in the stamp market, you must make a lot of money from stamp deals. Is it hard to establish the contacts that result in lucrative stamp investments?--D.E.

A: I break even on my stamp “deals.” Some stamps I sell at a small profit, others I sell at a loss. I am not a stamp dealer, so I don’t have to buy at rock-bottom prices and sell at comfortable profits to make a living from stamps. I teach and write for money.

If it were that easy to get rich, we would all be millionaires. I know a lot about stamps after studying them and the stamp hobby/business for 30 years. But that doesn’t enable me to see into the future, with all its unpredictables.

Some people study the horses for a lifetime and still can’t win consistently at the race track. Stock brokers know a lot about stocks, but they have to cater to customers at moderate buying/selling commissions because nobody knows for sure which stocks will double in price this year. In fact, “insiders” with extensive knowledge about a tradable commodity are the first to admit that it is tough to predict precisely anything in that business.

Q: I have a few plate blocks of the 80-cent Hawaiian air mail from the 1950s. Are these worth something?--R.W.E.

A: About $20 each for an unhinged plate number margin block-of-four. Issued March 26, 1952, this reddish-violet, 80-cent U.S. air mail (Scott No. C46) was, according to some stories, produced specifically for paying the cost of sending orchids between Hawaii (which wasn’t yet a state) and the U.S. mainland, because no normal air-mail rate required an 80-cent stamp then. The pretty stamp is ever-so-slowly increasing in value as the years go by.

Q: Is membership in national stamp societies expensive? And what are the benefits?--P.R.

A: For $21 (an admission fee of $3 plus annual dues of $18), you can join the largest philatelic society in the United States: American Philatelic Society, P.O. Box 8000, State College, Pa. 16803. Bank and credit references as well as two character references must be given on the application forms (send a stamped, self-addressed business-size envelope to the above address). Benefits include an impressive, 96-page monthly journal; low-cost stamp insurance; sales circuits; discounts on expertizing (guarantee) certificates, and news on upcoming stamp exhibitions and auctions. Probably 95% of the serious philatelists in the country are members of the APS. My membership dates from 1976, and I’ve found the membership fees have more than paid for themselves many times over.

Q: I have some 19th-Century Egyptian stamps showing the Sphinx and a Pyramid. Are these rare?--F.G.

A: From 1867 until the early 20th Century, the “workhorse” stamp issues of Egypt were the Sphinx and Pyramid varieties. They range from a few cents each to hundreds of dollars apiece in current market value. Many varieties exist, such as different watermarks, thin and thick papers, perforation gauge changes and the like. Show your stamps to a dealer for a professional evaluation.

Q: Is there a stamp club in the Fairfax-Wilshire area? I used to go to a club a long time ago and would like to get involved in stamp collecting again.--R.W.

A: Try the Collectors Club of Hollywood, which meets at the California Federal Savings & Loan Assn., 3rd Street and Fairfax Avenue, on the second Tuesday of each month at 8 p.m., according to my latest information from them.

Q: What do you recommend as a sound stamp investment for the 1990s? I’ve been working on U.S. air mails and an album of Canadian plate blocks from 1930 to date.--T.B.

A: Ah, the future! Sometimes you have to wonder whether it is good or bad that we can’t see the future with complete clarity. If differences of opinion make a horse race, then similar varying viewpoints make stamp investment an interesting speculation.

My advice is to stick with the so-called “blue-chip” stamps, the ones with an established track record for steady price appreciation over the years. Early U.S. mint and used in extremely fine condition, costing more than $25 per stamp; complete sets of British Colonies; choice Western European definitives and souvenir sheets from before World War II; nice Asian covers, and 19th-Century classics in multiples (more than one stamp in a “piece”) or with unusually wide, well-balanced margins around the designs--these are stamps that have been in demand and probably will always have buyers as long as there are philatelists in the world.