US Coins

USPS created intentional rarity before U.S. Mint

If the United States Mint follows through with its announced consideration of releasing an intentional rarity into circulation in 2019, it can look to another agency on what to do and what not to do.

As reported in Linn’s Stamp News in numerous articles since 2013, the United States Postal Service offered panes of six $2 Jenny Invert stamps in celebration of the most famous U.S. philatelic error. The sheets went on sale in September 2013 but USPS officials did not reveal at that time that salted amongst the thousands of sheets printed were a tiny number of rare versions deliberately produced for collectors.

While most of the sheets would depict the Jenny aircraft in an inverted position as on an error sheet produced in 1918, 100 of the sheets were printed with the Jenny flying upright, creating an intentional rarity designed to encourage stamp collectors to buy sheets of the stamps at their post offices in the hopes of acquiring one of the rare versions, which were supposed to be distributed randomly in sealed envelops to post offices nationwide.

three auction catalogsInside Coin World: Three auction catalogs, three centuries: Our print-exclusive columns in the Nov. 19, 2018, issue of Coin World look at what ties together three auction catalogs issued in different centuries, and why 2018 is a great time to collect.

After the first sheet with the Upright Jenny was discovered by a collector, USPS officials revealed the existence of the rare versions as part of its promotional effort.

The decision to issue the intentional rarity, however, was not without controversy.

A 1918 airmail rarity

On May 10, 1918, the U.S. Post Office issued sheets of 24-cent airmail stamps depicting in the center an image of a Curtiss JN-4 airplane, nicknamed a Jenny, in flight. Postal authorities had been experimenting with delivering mail by aircraft, and on May 15, 1918, the first scheduled Air Mail Service flight was made from Washington to Philadelphia to New York City in a Jenny provided by the U.S. Army.

To facilitate payment for posting mail by air, which was much more expensive than the regular rate, sheets of special 24-cent airmail stamps were printed, each containing 100 of the stamps. Within a few days of the stamps’ release, one sheet was found with the center of the design printed upside-down, creating the famous Inverted Jenny error, as it is known in philatelic circles.

Each 100-stamp 1918 sheet was printed in two colors, red and blue, requiring two printing runs. The Inverted Jenny sheet was inverted during one of its press runs, resulting in the biplane (in blue) being printed upside down in relation to the red element. Today, those error stamps are major rarities, bringing prices that can approach $1 million when one is sold. They are, in some ways, the philatelic equivalent of the 1943 Lincoln cent struck on a bronze planchet — a major error that sells for high prices whenever one becomes available.

The individual who purchased the error sheet recognized its significance and sold it to a Philadelphia stamp dealer for $15,000. The dealer in turn sold it for $20,000 to “Colonel” E.H.R. Green, a noted collector who had also amassed a major collection of coins. Green was advised to split the stamp sheet into smaller groupings, and they were sold into the marketplace over time.

Controversial decision

The normal Inverted Jenny sheets announced in 2013 were intended to pay tribute to that great rarity of nearly a century earlier. Each sheet contained six $2 stamps printed in the same red and blue colors as the original. In honor of the original error, the “regular” sheets were printed with the Inverted Jenny.

The 100 sheets printed with the Upright Jenny were supposed to be randomly salted among the regular sheets and shipped to postal facilities nationwide. All of the sheets were sealed in packaging, so one had to buy a sheet blind without knowing whether it was of the regular Inverted Jenny type (most likely) or the rare Upright Jenny version (very unlikely).

The decision to create an intentional rarity was controversial. The USPS Office of Inspector General criticized the creation of the Upright Jenny sheets and the manner in which they were distributed.

According to an Aug. 17, 2015, blog post from the Office of Inspector General for the USPS, “While an innovative idea, this action had the unintended consequence of creating and improperly distributing a philatelic rarity, our recent management advisory noted. The Postal Service strongly and inappropriately influenced the secondary market by creating a rarity,” the report said. The blog added, “Our report recommended the Postal Service develop a formal process for philatelic promotions.”

Distribution of the rare sheets was botched. All 100 sheets were supposed to have been randomly shipped to various postal facilities when initially released. However, Linn’s learned in 2015 through a Freedom of Information Act request for information that not all of the sheets were distributed immediately. 

The information released in response to the Linn’s FOIA to the USPS request indicated that the Kansas City Stamp Fulfillment Services center had not distributed an undisclosed number of the Upright sheets. Linn’s reported that the sheets were discovered at the Kansas City center.

In a one-paragraph response to the Linn’s inquiry, a postal official “said the undistributed rare upright panes were ‘counted, unwrapped and verified,’ ” Linn’s reported in July 2015.

In another controversial move by the Postal Service, Linn’s reported on Jan. 9, 2015, “The United States Postal Service has provided three lucky collectors with one pane each of the upright $2 Jenny Invert stamp, a variety intentionally created by the Postal Service that has proven to be worth many thousands of dollars,” adding, “However, the giving has come to an end, and a Postal Service spokesman recently told Linn’s Stamp News that the stamp giveaway was not fully approved.”

Collector reaction

Collector reaction to the USPS production of an intentional rarity was mixed. Some thought the idea great, because it generated excitement and encouraged stamp collectors and others to buy sheets of the stamps. Objections to the idea were generally focused on the idea of creating an intentional rarity, especially one with an edition size so small. 

Today, 32 of the Upright Jenny sheets have been reported to the Postal Service. When sold at auction, they have typically brought around $50,000 each.

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