Greatest Revenues VI

Greatest Revenues VI
By Ron Lesher

Let’s recall that to be selected for this list of the greatest revenue stamps, a stamp needs to meet one or more of the following criteria: visually stunning; historically significant; interesting philatelic history; recognizable to those outside the hobby. For this month I have decided to continue exploring the field of U.S. state revenues which were featured last month. Last month’s selections were all from the 1930’s, so this month I have decided to go back in time.

Let’s begin with arguably the most important state revenue stamp from a constitutional point of view. Unlike all of last month’s selections this stamp is listed in the Scott U. S. Specialized Catalogue. It is RM362, which was issued by the state of Maryland in 1818. The Second Bank of the United States was established in 1816 and they opened a branch bank in Baltimore the following year. Undoubtedly because of the competition that this branch offered to banks chartered by the state, the Maryland legislature passed a law taxing the circulating currency of banks not chartered by the state.

There was only one bank operating in Maryland that had not been chartered by the legislature. Among all the rates, it is essential to understand only one rate and that is a tax of 30¢ on $20 notes. The Treasurer of the Western Shore had four stamps printed on sheets of paper intended for the offending bank to print four $20 notes, the only denomination known to have survived to the present. The cashier of the Baltimore branch refused to purchase the sheets with the stamps printed thereon.

There were civil penalties, which the branch refused to pay and so the state took
the Bank to the state courts which found in favor of the state. The Bank took the case to the U.S. Supreme Court. Fresh from a victory of the landmark Dartmouth case, Daniel Webster opened the case for the Bank. William Pickney of Maryland, the leading constitutional lawyer of the day opened the case for the state of Maryland. Other lawyers joined each side.

The final unanimous opinion was delivered by Chief Justice, John Marshall on March 6, 1819, in favor of the right of Congress to establish the bank. Further, the state could not tax the bank, because this was hostile to the bank and to the power of Congress to establish it. This landmark decision in the case of McCullough v. State of Maryland is part of the legacy of the Marshall court enunciating  the principles of the rights of the federal government and the states under the constitution. In 1944 Colin MacR. Makepeace estimated that no more than 19 sheets were in philatelic hands and it is known that several of these have been cut up. Nevertheless, this is one of the treasures of early state revenue philately.

Effective July 1, 1857 the state of California had enacted a series of documentary taxes, one of which was a $10 stamp for a license to printed in blue. Two of these are known on full document and perhaps another four loose stamps have been recorded. One of the documents that surfaced about 15 years ago is from the initial year, 1857, when a total of only 10 stamps were sold by the state! These stamps were printed from woodcuts.

As adhesive stamps they, along with the other categories issued at the same time, qualify as the first adhesive revenue stamps of the United States, five years earlier than the federal First Issue (Scott R1-102). In 1860, another printing of the Attorney-at-law stamps was made in red. When sold these stamps had a counterstamp applied with the State Controller’s initials. Specialists in the early California documentary stamps not only treasure these stamps, but pursue examples with each of the known Controller’s counterstamps. Fortunately, the blue Attorney stamps were only issued during the tenure of Aaron R. Meloney, and so each is stamped with the initials A. R. M. in a circle.

Another state that issued tax stamps in the nineteenth century was Louisana. In February, 1866 the state required a license fee of $10,000 to vend lottery tickets. Apparently, no in state agencies took out a license. Out of state agencies could obtain a license to sell tickets in up to ten locations. A month later the lottery lot was amended to include a stamp tax on the tickets amounting to 5% of the value of the ticket.

Four lithographically produced stamps were issued in blue, a 5¢ (Figure 4), 6 1/4¢, 7 1/2¢, and a 12 1/2¢. These were obviously intended for tickets that sold at $1, $1.25, $1.50, and $2.50 respectively. All are quite scarce, but the 5¢ is the gem of the series. It comes in two varieties, the cross-hatched background illustrated is
said to be unique.The stamps have several unusual features. First is that the state’s name does not appear on the stamps. The central motif of the stamp, the Masonic square and compass, surrounds the letter G. What makes this unusual is that Louisana had a predominantly Roman Catholic population, owing to its French origins. Another reason for the rarity of these stamps may be their replacement with a set in green with the state seal in the center. Applegate reported that one of the green set had a cancel of April, 1866, so the set with the Masonic symbols may have been in use for a very short period of time. The state law was rescinded in 1869.

We leave the nineteenth century for some stamps that were used for liquor in New York state. The first is a stamp that was first issued in 1903 for liquor that was sold in pharmacies, but not under a doctor’s prescription. This seems like a convoluted description as indeed it is. First we should recall that there was a time that whiskey
was prescribed for medicinal purposes (settle the nerves?). When the Prohibition Era began in 1920, whiskey could still be obtained under a doctor’s prescription.

Pharmacies that sold medicinal whiskey were required to have a special state license which cost only $7.50 per annum, much lower than a general retail liquor license. Whiskey sold under a doctor’s prescription in New York was not liable to the additional tax that was established in 1903. What this law sought was to discourage
pharmacies from engaging in retail liquor sales at the preferential rate of their annual license. The tax was ten cents per pint, a discouraging penalty. The stamps were issued in sheets of five, lettered A through E. They have been recorded with two different size serial numbers.

This was not the last time that the state of New York engaged in a peculiar tax on liquor. When Prohibition began in January, 1920, the state thought they had a way around the federal amendment. They believed that if they taxed it, retail sales could still be made. The feds eventually successfully fought the state law in the courts
and the “legal” sales ceased in May, 1921. Note that I did not write that all sales ceased for as we know the feds were constantly raiding speakeasies in New York City.

The first stamps that were sold are large and were intended to be about the size of a bottle label for placement on the back of bottles or perhaps on the cases. I have never seen a bottle or a case with these stamps. All seem scarce and especially used examples. Figure 6 shows a used example of the later smaller size stamp used in October 1920.

Finally we turn to another example of a tax that ran afoul of the federal courts, the Kentucky tax on oleomargarine. The tax was enacted in 1932 and was at the rate of 10¢ per pound. The Field Packing Company argued in the federal courts that this tax in effect raised the price of oleomargarine above the price of butter. So much for oleomargarine being the the lower priced alternative to butter!As was the case in many states, the dairy interests were probably behind the original enactment of the law.

The U.S. Supreme Court ruled that the determination of the constitutionality of this state law lay with the state courts. The case was decided in March, 1933 and the collection of the tax ceased by April 20, 1933. All of the Kentucky oleomargarine stamps are perfi n cancelled with a two line K/TC standing for the Kentucky
Tax Commission. They are known reading properly both from the front and back of the stamps. When the late Carter Litchfi eld was writing about these stamps in the 1980s these stamps were rare, being in used for about 13 months. A substantial number of these stamps have come onto the market subsequently.