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Imagine the discovery, in some Himalayan or Amazon fastness, of a previously unknown enclave, with a complex social structure unlike that of any known society. Let us further stipulate that its populace must be, both on average and in its extreme examples, at least arguably the most physically attractive specimens of humanity. Such a discovery would be a sociological, anthropological and popular sensation, headlined on virtually every media outlet.
Imagine next the philatelic analog, the discovery of a subfield hidden for a century, governed by an unprecedented, complex system of rates, comprised of what are at least arguably the most visually attractive items ever to bear stamps. To an informed, aware audience this would surely rank among the most significant philatelic events of this or any generation.
The purpose of this article is to point out that just such a discovery has in fact occurred, of bonds subject to New York’s Mortgage Endorsement, Secured Debt and Investment stamp taxes of 1910-20.
Most beautiful? Staking the claim
As for the visual appeal of these bonds, the examples shown here speak for themselves.
Figure 1 shows an 1894 $1,000 bond of the New York and Putnam Railroad Co. with Great Britain embossed transfer tax stamps struck in 1894 and Mortgage Endorsement orange stamp affixed in 1917.
Figure 1. Left: An 1894 bond with Mortgage Endorsement orange stamp affixed in 1917. Right, a close view of the stamp.
Figure 2 shows an 1887 $1,000 bond of the New York, Susquehanna and Western Railroad Co. with Secured Debt $5 affixed in 1912. Note the Great Britain 1891 transfer tax adhesive; as explained below, the use of such foreign stamps would play an essential role in the creation of these New York issues.
Figure 2. An 1887 bond with Secured Debt $5 stamp affixed in 1912. At near left, a close view of the stamp.
Figure 3 shows a 1911 £100 bond of the Imperial Chinese Government Hukuang Railways with Secured Debt $1 affixed in 1917, and Investments $1 in 1918.
Figure 3. A 1911 bond with Secured Debt $1 stamp affixed in 1917 and Investments $1 stamp in 1918. At left, a close view of the Investments stamp.
Then as now, bonds were the physical representation of gilt-edged investments, and as such were security instruments, produced by companies like the American Bank Note Co. and its competitors, typically finely engraved with engine-turned borders, large vignettes and other features designed to deter counterfeiting. At the same time they served as prominent public faces of the issuing companies, and their attractive designs were chosen to project prosperity and inspire confidence.
During America’s Gilded Age — roughly 1870-1900 — as illustrated by the examples shown here, as in other aspects of society, bonds became extravagantly ornate and colorful, perhaps not to everyone’s taste, but certainly a spectacular setting for the stamps under discussion.
Bringing bonds under the philatelic umbrella
A salient point here is that until the discovery of this subfield, with a single brief exception, bonds in the U.S. were not known to have been subject to a stamp tax after 1872 — when the broad slate of Civil War era documentary taxes was rescinded — until a new federal tax was imposed in 1932. The sole exceptions were the relatively few bonds bearing U.S. Spanish-American War era documentaries affixed upon issue in from 1898 to 1902. To repeat the claim made at the outset, the New York bond taxes bring under the philatelic umbrella what are at least arguably the most visually attractive items ever to bear stamps.
Stamps of mystery (I)
Yet, for a century these exceedingly beautiful pieces and the stamps they bore were virtually unknown to philatelists.
Brewster C. Kenyon, whose Documentary State Revenue Stamps of the United States was written while the Investments stamps were still current, provided a complete list of their denominations and colors via correspondence with the New York Comptroller’s office in Albany, but had almost certainly not seen the stamps.
The same can presumably be said for Kenyon’s description of the Secured Debt stamps, which preceded the Investments issues. The information Kenyon obtained and circulated was timely and useful, for bonds bearing these stamps would not be in collectors’ hands for decades. For example, George Cabot’s esteemed 1940 Priced Catalog of the State and City Revenue and Tax Stamps of the United States left all Investments denominations unpriced, explaining that “until the documents upon which the stamps are used mature or are transferred, releasing a larger supply of them, it seems almost impossible to set judicious valuations”(Figure 4).
Figure 4. Listings of the Tax on Investments stamps by Cabot (1940), all unpriced (and nearly all unseen).
Split taxes on interstate mortgage bonds!
As the stamps were affixed by agents of the comptroller, the conclusion is inescapable that the tax on these bonds was officially construed to be 90 percent of the normal levy, and a review of the statutes furnishes a satisfying explanation. If a bond was secured by mortgage of property situated partly within and partly without the state of New York, only a portion of the bond was subject to the Investments tax, based on the value of the property outside the state relative the value of the entire property.
The Lake Shore and Michigan Southern ran from its eastern terminus at Buffalo, along Lake Erie (the “Lake Shore” in the company name), then all the way to Chicago, with numerous branch lines in several states. A map of its holdings in 1914 is perfectly consistent with an assessment that 10 percent of its value lay within New York state, and that the applicable Investments tax was thus only 90 percent of the full amount.
The grail, approximately
This sets the stage for the Lake Shore 1903 $20,000 bond shown in Figure 15, bearing both a Mortgage Endorsement orange and a 90 percent proportional payment of the Investments tax for five years by Secured Debt $100, $50, $25 and $5 stamps. At first glance this appears to be one of the figurative holy grails of the field, with Mortgage Endorsement and Secured Debts/Investments stamps paying their respective proportional taxes.
Figure 15. A $20,000 Lake Shore bond with Mortgage Endorsement orange initially paying the $100 mortgage tax in May 1917, this cancelled in June and the 90 percent pro-rated Investments tax of $180 paid in July by Secured Debt $100, $50, $25 and $5 stamps.
A closer look, though, reveals that the Secured Debt stamps did not complement the Mortgage stamp; they replaced it. The latter was affixed May 3, 1917, in Erie County, with manuscript notation “Cancelled June 20/17”; the Investments tax was then paid instead on July 2, 1917.
The full Mortgage tax was $100; why pay $180 in Investments tax? A plausible explanation is that it provided exemption from the state’s new 5 percent estate tax, amounting to $1,000, but paying the Mortgage tax did not. But why was only 90 percent of the full Investments tax paid? Waiving determination of the proportional rate and paying the full tax would seem to have been even more beneficial, and certainly simpler (albeit far less philatelically desirable). In any case, we now have a fantastic scenario resulting in a unique and spectacular combination!
In this article it has only been possible to present only an outline and a few key items from this emergent field. The author welcomes correspondence at [email protected] verizon.net.
Cabot, George. Priced Catalogue of the State and City Revenue and Tax Stamps of the United State (Weehawken, NJ: published by author, 1940).
Hilton, James. Lost Horizon (Macmillan, 1933).
Hoyt, Edwin P. The Vanderbilts and Their Fortunes. (New York: Doubleday, 1962).
Kenyon, Brewster C. Documentary State Revenue Stamps of the United States. (Long Beach, CA: published by author, 1920).
Mahler, Michael. Philatelic Shangri-la. New York Stamp Taxes on Bonds, 1910–1920. A Spectacular Philatelic Subfield Hidden for a Century. (Santa Monica, Calif.: Paper Trail Publications, 2023).
Michael Mahler is a retired research scientist turned professional philatelist, residing in Santa Monica, California. After spending a decade studying the movement and consumption of oxygen in muscle, he became a describer at the stamp and postal history firm of George Alevizos, and turned his research energies to the study of revenue-stamped documents of the U.S. Civil War era. These efforts have been rewarded, for literature, with two Colby awards, for “How Were U.S. Civil War Documentary and Proprietary Revenues Made Available to the Public?” (I993); and for “U.S. First Issue Stamps that Almost Were (and Almost Weren’t!): Evolution of the Documentary and Proprietary Taxes of 1862” (2018); and the Elliot Perry Cup for “A Catalog of United States Revenue-Stamped Documents of the Civil War Era By Type and Tax Rate” ( 1999); and for exhibiting, by the Champion of Champions multiframe and single frame awards, for “U.S. Civil War Fiscal History, A Summary of the Documentary Taxes “ (2001) and “Big Rug, Small Rug, Baby Rug: U.S. Civil War Era $200 & $500 Revenues, Their Purpose Illustrated” (2017), respectively. Later iterations of the multiframe exhibit were nominated for the Grand Prix National at World Stamp Show-NY 2016, and awarded Best Revenue at London 2022. Since 2013 he has been editor of The American Revenuer, the flagship publication of the American Revenue Association.