By Greg Reynolds for CoinLink

On Nov. 14, the firm of Robert Siegel, operated by Scott Trepel, auctioned an ‘Inverted Jenny’ 24¢ U.S. airmail stamp, of 1918, at the firm’s galleries in midtown Manhattan. It is an error of the first official U.S. airmail stamp. The airplane in the center was mistakenly printed upside down.

This stamp has been independently authenticated, but it was not independently graded. Trepel grades it as ‘Extremely Fine’ with “only a trace of a hinge.”

Trepel was also the auctioneer when the Siegel firm set the auction record for a philatelic item, something relating to postage, a little more than two years ago. On Oct. 19, 2005, the only existing plate numbered block of four ‘Inverted Jenny’ stamps sold for $2,970,000.

In September, Jay Parrino, a famous coin dealer, sold a different ‘Inverted Jenny’ privately for exactly $1 million. It has Very Fine grade centering along with a never hinged original gum on the reverse. Parrino sold it to a Hollywood movie mogul who started buying stamps from Jay when they were both kids. He has also collected coins.

On Nov. 14, the bidding action was intense. As the price realized includes a 15% buyer’s fee, the same as at coin auctions, it makes logical sense to adjust all bids to incorporate the ‘buyer’s fee.’

Bidding started at around $335,000. More than five bidders, at least one by telephone, were involved as the level rose to above $400,000.

I was glad to see another coin expert at the event. Greg Rohan, President of Heritage Auction Galleries, came to bid on this ‘Inverted Jenny.’ Rohan’s first bid was $460,000.

A telephone bidder came back with a bid of about $490,000. Rohan then pushed the level well above $500,000. A New York City stamp dealer, who asked that his name not be mentioned, waved himself in at nearly $550,000 ($475k+15% = $546,250).

The phone bidder returned with a $575,000 bid. This amount almost tied the previous auction record for a single ‘Inverted Jenny’ when the Siegel firm auctioned a different single on June 3, 2005, for $577,500. In the original sheet, the ‘Inverted Jenny’ (in position #57) that was auctioned in June 2005 was right next to the one that was auctioned on Nov. 14, 2007, at position #58. Long ago, a dealer who owned the whole sheet noted the position numbers of each of the one hundred ‘Inverted Jenny’ stamps.

Greg Rohan’s next bid raised the price to above $600,000. The phone bidder indicated $632,500. Later, Parrino stated to me that he was bidding by telephone as the price climbed towards $700,000. Afterwards, three or four bidders remained.

I am not sure who bid $747,500. A leading collector, Charles Hack, bid about $775,000. Who bid $805,000? Rohan brought the price to $833,750, and he looked a little stunned. Rohan had already expected to be victorious. Hack was sitting next to his advisor, Harry Hagendorf, in the front row.

Hack hesitated for only a split second before he bid $862,500 (= $750k + 15%). Rohan sprang back with a bid of almost $900,000! All the whispering and small talk in the room then ceased.

Stamp collectors and dealers tend to be quieter and more polite than coin people. Indeed, at major coin auctions, there is generally a lot of talking, sometimes quite loud, including plenty of boisterous remarks. A few of the stamp people did, of course, tell me about the other ‘Inverted Jenny’ stamps that they owned, auctioned, or privately sold.

At the point that the level approached $900,000, though, the stamp people present were not just quiet; they were completely silent. Everyone seemed surprised by the extent of the price climb. The event turned out to be far more exciting than I thought that it would be.

As the ‘Inverted Jenny’ stamp that Jay Parrino sold privately for one million has never been hinged and has a complete original gum, Parrino strongly believes that it is worth much more than this one. The New York City dealer who bowed out at around $600,000 later told me that the mark left by the hinge on this one is “tiny and trivial.” The dealer Hagendorf, who was advising Hack, expressed the opinion that the mark left by the hinge was “light and very small.” Moreover, this stamp had terrific color. It is naturally and exceptionally bright, more so than most of the other ‘Inverted Jenny’ stamps.

Although I never saw the ‘Inverted Jenny’ that Parrino recently sold, I have seen several others, and I have seen a large number of early airmail stamps. For the rest of my life, I will remember the brightness of this stamp that sold on Nov 14. Trepel pointed out that this stamp has spent long periods of time in appropriate containers, away from bright lights, in proper environments for the storage of stamps. Other ‘Inverted Jenny’ stamps have received improper care, including being subject to too much UV light. This one has been properly stored during its life of nearly ninety years.

Before I saw this ‘Inverted Jenny’ stamp, I thought that it might sell for a price ranging from $600,000 to $800,000. After I saw the stamp, I was figuring at least $700,000, and maybe around $850,000.

I was startled when Hack bid $920,000. Rohan also seemed very surprised. Rohan’s emotional reaction did not stop him from going to $948,750 ($825k + 15%). Hack then quickly and comfortably captured this stamp for $977,500.

There is another U.S. stamp that is likely to be worth more than any single ‘Inverted Jenny,’ an 1868 one cent stamp with a Z-grill embedded in the paper. During one period in U.S. postal history, various grills were employed as parts of the fabric of stamps. The purpose of each grill was to make it very difficult for unscrupulous individuals to wash out cancellations and re-use stamps.

The Siegel firm, under Trepel’s direction, auctioned the Robert Zoellner 1868 one cent Z-grill in 1998 for $935,000, which was the old auction record for a single stamp. On Nov. 2, 2005 in New York City, the Zoellner 1868 1¢ Z-grill was traded for the unique plate block of ‘Inverted Jenny’ stamps, thus putting a value of $2.97 million on the Zoellner 1868 one cent Z-grill. The new owner, Bill Gross, became one of fewer than five collectors, of all time, to complete a set of 19th and early 20th century U.S. stamps.

The only other known 1868 one cent Z-grill is in the Benjamin Miller collection that was donated to the New York Public Library in 1928, where it still resides. In the 1920s, Miller’s collection was deemed to be complete, but it does not include varieties that have since been discovered, at least two of which are controversial. Gross has examples of all such varieties.

While an 1868 1¢ Z-grill issue is much rarer than an ‘Inverted Jenny’, it is not as attractive and not as culturally significant. In 1918, the idea of using airplanes to transport mail was new and shocking to many people. ‘Inverted Jenny’ stamps bring to mind the fact that most people then were extremely scared of airplanes. In 1918, some people were aware that combat airplanes sometimes flew upside down, but others would not believe that such flying was really possible. Many people thought that it was not practical to fly at all.

There is no doubt now that the use of airplanes to transport mail had a profound effect on economic, technological and cultural advancement. Though the Scott numbering system suggests that the 24¢ airmail issue is the third U.S. airmail stamp, it is really the first one.

While thousands of the first 24¢ airmail issue are known, only one sheet of one hundred stamps survived of this ‘Inverted Jenny’ error that shows a Curtiss JN4-H ‘Jenny’ biplane seemingly upside down. Trepel relates that the exact plane pictured, identified by the serial number on the fuselage, became the first airplane to fly a regular mail route, on May 15, 1918. Initially, airmail service was limited to a Washington (DC) - Philadelphia - New York City corridor.

The plane was printed in blue, and the remainder of the design was printed in a color close to red, which stamp collectors call “Carmine Rose.” Each sheet had to be fed twice through printing presses. Among those that were fed ‘inverted,’ only one sheet was sold to the public, and all known ‘Inverted Jenny’ stamps are traceable to this one sheet.

A stamp collector was lucky enough to buy the whole sheet at a post office in Washington on May 14, 1918, the day before the pictured plane flew the first airmail route. The postal clerk who sold it later explained that he could not have been expected to notice an upside down airplane because he had never seen an airplane. Nearly ninety years later, people are still fascinated by airplanes and collectors are enthusiastic about stamps that picture them.

Rohan stated that he “had a customer in mind” for this stamp. Of course, I asked whether Rohan’s potential buyer was a coin collector. Rohan said “yes, and he also collects currency, paintings, sculptures, and movie posters.” Rohan went on to say that many Heritage clients have expressed interest in rare stamps.

Heritage Auction Galleries has already announced that the firm will be re-entering the stamp business. Rohan explained that Heritage’s stamp division “was sold about fifteen years ago. It was strictly a business decision.” The “non-compete agreement” with the buyer of Heritage’s stamp division “lasted for fifteen years,” Rohan added. Heritage “is now aggressively seeking stamp experts to staff the new” department. Rohan and Jay Parrino independently stated that “many coin collectors are also interested in stamps,” particularly stamps that are PSE certified.

From the 1950s through the early 1970s, coins and stamps were often thought of as being a single category. Shows frequently featured both coins and stamps, and many dealers handled both. The famous tri-annual Long Beach, California shows continue to showcase both coins and stamps. Book stores did, and often still do, place books in both fields next to, or very near, each other. I have heard that, in the past, there were a large number of stores that sold both coins and stamps. Over the last twenty years, however, coins and stamps have tended to be regarded as entirely separate topics. Important, high quality stamps are generally much less expensive than analogous coins.

Rohan and Parrino agree that the rise of independent grading has contributed to much increased interest in stamps. Trepel points out, however, that such grading “has become popular with many stamp collectors only in the last year or two.” My guess is that independent grading, along with encapsulation, may not have much of an effect on long-term, seasoned stamp collectors, but has the potential of attracting many coin collectors to stamps. The grading and encapsulation of stamps will also draw attention from collectors of sports cards, comics and gemstones, which are fields where independent certification has already been accepted to a substantial extent.

Parrino sells stamps that are both graded and encapsulated by PSE which is a division of Collectors Universe, the parent of the Professional Coin Grading Service (PCGS). Unlike PCGS, PSE offers the option of a certificate without encapsulation. Most of the PSE graded stamps in the recent Siegel auction were not encapsulated.

Generally, almost all of the individual stamps in Siegel’s large November auction were certified by either PSE or the Philatelic Foundation. In many cases, the certificate stated that the respective stamp was authentic and did not include a grade. PSE data lists just seven ‘Inverted Jenny’ stamps as having been PSE graded.

Charles Hack, the collector who spent $977,500 for this stamp, said he does not plan on getting his new purchase encapsulated or independently graded. “This stamp speaks for itself,” Hack declared.

While a large component of a stamp’s grade is determined by how well it is centered, Hack is “more concerned about the impression, the strength of the pressing,” the cleanness of the printing, and the current “quality of the paper.”

There may be other factors relating to the “impression” that cannot be easily explained. I believe that I comprehend Hack’s approach. Regarding this ‘Inverted Jenny’ stamp, the ink remains vibrant and complete. Further, the ink sank well into a choice sheet of paper. Plus, Trepel explained that, for stamp sheets in general, the stamps in the sheet that are closer to the centers have fewer imperfections than the stamps that are closer to the top or especially to the bottom.

For ‘Inverted Jenny’ stamps, position #58, this stamp, and position #57, the one that set a previous record in June 2005, were both close to the center of the original sheet. Trepel reports that the position #57 ‘Inverted Jenny’ stamp was PSE graded Extremely Fine to Superb, 95, after his Siegel firm auctioned it. A source, who is not associated with Siegel auctions, suggests that a leading coin dealer, who is not mentioned in this article, owns this EF-Sup 95 ‘Inverted Jenny’ stamp.

The PSE graded “VF-80 Mint OGnh” ‘Inverted Jenny’ that Parrino sold in September 2007 is known as position #68. When it was printed, it was not near the top or bottom of the sheet.

Regarding this ‘Inverted Jenny,’ position #58, both the colors and the paper are bright. In the catalogue, Trepel refers to the “fresh original gum” with a “small light trace of hinging.” When Hack refers to “the impression,” he is speaking of these factors and more. Hack’s discussion of a stamp’s ‘impression’ is somewhat analogous to how coin experts describe a coin’s ’strike.’ The crispness of the details is central to both concepts.

Hack was thrilled to buy this one, even though he already owns an ‘Inverted Jenny’ stamp. He was the buyer in October 2005 when the Siegel firm sold the ‘Inverted Jenny’ stamp, known as ‘Position #35.’ He likes them so much that he is planning on keeping them both. There are probably more than ninety, of the original one hundred, in existence. Nonetheless, most are of lesser quality than the two that Hack now owns.

While it is a high price for a stamp, Hack believes that the prices for ‘Inverted Jenny’ stamps “are low” when “compared to prices” for works of art. He also collects “Dutch Old Master paintings, drawings and engravings.” In the art world, he says, “a mediocre item may sell for one million dollars.” Hack emphasizes that the ‘Inverted Jenny’ is of great importance for the whole field of stamps and postal history. “It is the stamp that most people know about, an icon!” As the top item in a whole field, Hack believes that the ‘Inverted Jenny’ “should be worth more.” On Nov. 14, Hack was “glad to pay more” than the “$650,000” that he “expected it to bring”!

Hack “started collecting stamps as a child.” He began with a specialized category of Hungarian stamps that were inexpensive, yet historically fascinating. Hack relates that he was “a poor kid who had a fantasy of buying an Inverted Jenny.” He “came here to fulfill a fantasy,” again.

Similarly, Trepel revealed that the consignor, from Virginia, is a “modest living, low key, friendly guy who collected stamps as a child” and “always wanted an ‘Inverted Jenny’!” While he has a few other not very rare stamps, he was focused on this one. Now that “he has enjoyed owning it for a few years,” he wishes to let someone else enjoy it, too.

©2007 Greg Reynolds