From the Inverted Jenny to the British Guiana 1-Cent Magenta, we love a good story behind our stamps. So you are bound to like this one, which crosses stamps, coins and a specific time in U.S. history. And, this interesting chapter of philately and numismatics are getting a big boost this month, thanks to a major auction.
When the American Civil War began in April 1861, many thought it would end quickly; both sides expected victory and the general population within the Union and Confederate states were confident. But moods changed when the North lost at the first Battle of Bull Run (July 1861), the Union blockaded southern ports, the 7 Days Battle near Richmond ended in a stalemate and floods of money and resources were suddenly swept away by the need to support military forces. Shortages started to crop up and there was panic based on perceived future shortages.
One of the items people hoarded was currency, particularly hard silver and gold coins. In the North, even the U.S. Mint’s cheaply made copper-nickel cents quickly vanished from the market.
To help, on July 17, 1862, the U.S. government passed legislation allowing people to pay small government debts of $5 or less with postage stamps.
Stamps were fragile, though, and quickly degrade during exchanges. Enter New Englander John Gault, who quickly designed and obtained a patent on August 12, 1862 for “encasing government stamps,” which he called “new metallic currency.”
To create the coins, the corners of a postage stamp were wrapped around a cardboard circle. A thin, transparent piece of thin mica covered the stamp (this would prove to be the weak spot as the mica often cracked and fell off), and an outer metal frame held these items secure. A heavier brass backing, suitable for advertising, completed the piece, which was manufactured by a button-making machine. The product was about the size of a quarter but lighter in weight. Many of the cases of early examples were carried silver plate to make them look closer to real coins.
Gault encased eight denominations of 1861 stamps, from 1 cent to 90 cents (These carry an “EP” number in the Scott catalog). He sold the coins at a slight premium to about 30 companies that needed coins and then also sold advertising space on the back for 2 cents per coin. Merchants and their products included J.C. Ayer & Company selling sarsaparilla to “purify the blood,” White the Hatter, and retailer Lord & Taylor, which survives today. Experts estimate there are about 238 different pieces of encased postage.
The sales of encased coins lasted about a year until the federal government in 1863 passed another law allowing a type of “postage currency,” fractional currency on paper money using stamp designs (these carry a “PC” number in the Scott catalog).
Experts estimate Gault sold about $50,000 in encased postage, about 750,000 pieces. Somewhere between 3,500 and 7,000 are thought to have survived, experts say. The Scott catalog values these pieces at $400 to $16,000, with most in the four-digit range.
On March 9, Kagin’s Auctions, of California, known as a major coin auctioneer, will sell the Michigan Collection of encased postage stamps at the American Numismatic Association National Money Show in Irving, Texas.
“It is believed to be one of the most comprehensive sets ever and perhaps currently the finest and most complete including 147 different varieties,” Kagin’s wrote in a news release “It is the result of some 25 years of working with Kagin’s Inc. attempting to fulfill a dream of acquiring all known varieties.”
Kagin’s noted that only a handful of times over the past century have dozens of these items appeared in the same auction.
Kagin’s Auctions, Inc., www.kagins.com.
“Encased Postage Stamps,” National Postal Museum Arago website, https://arago.si.edu/category_2036357.html.
2018 Scott Specialized Catalogue of United States Stamps & Covers, Amos Media, Sidney, Ohio.
Numismaster website, www.numismaster.com/ta/numis/Article.jsp?ad=article&ArticleId=15559.