It was easily one of the most famous events in philately in last 100 years, drawing worldwide media attention from over 100 different media outlets throughout the world including the New York Times, the London Times and CNN.
The event was not your typical stamp sale, but rather a swap between two parties, each at the highest level of worldwide stamp collecting. On one side was international dealer Mystic Stamp Company, and on the other was a man who needs no introduction among philatelists or financiers...
A week prior to the announcement of the swap, William H Gross, billionaire 'Bond King' investor and among the world's greatest philatelists, once again made philatelic history with his World Record $2.7m purchase of a block of four Inverted Jenny stamps, aka 'America's most famous stamp'.
Yet the swap eclipsed even this. It turned out that Mr Gross also needed just one more stamp to complete his collection of 19th century US stamps. And it wasn't the Inverted Jenny block that he needed (he already owned four of the six known blocks) but instead the two-of-a-kind one cent Z-Grill.
 Swapped stamps the Inverted Jenny block and Z-Grill, worth $6m together |
His solution? To swap his Inverted Jenny block for Mystic Stamp Company's Z-Grill, making the Z-Grill's value jump instantly from $935,000 to $2.97m overnight. Mr Gross's collection consequently became only the third-ever complete set of 19th century US stamps in history.
But the 'Bond King' wasn't alone in dreaming up or executing the swap. In fact, the idea germinated in collaboration with one other person. That man was Charles Shreve, President of US auctioneer Spink Shreves, himself a renowned philatelist with over 40 years of experience.
Charles kindly took time out to chat to Paul Fraser Collectibles - and the result is one of the most revealing interviews about the most famous and expensive swap in philatelic history ever published.
The interview is in two parts. Here, Charles' talks about his years in the business, his passion for stamps and what to look out for in 2011. But watch this space, as next week we'll publish his exclusive insider's perspective on the $2.97m Inverted Jenny/Z-Grill swap and what it's like to work alongside the legendary Bill Gross...
How did your passion for rare stamps begin?
It just really grew very fast when my grandmother who gave me a stamp collection, I think it was on my 12th birthday, and i just immediately fell in love with the stamps.
I was intrigued by all the different countries that were involved, the shapes, colours, sizes, just everything - so much that, in just a few months, i was working for a local retail stamp dealer on Saturdays to pay for my purchases.
 Charles Shreve, President of Spink |
I didn't get paid, I got paid in stamps. When I was 13 or 13-and-a-half, I started to go around to some of the local stamp shows.
There was a new stamp auction house starting in the Detroit area called Roger Koerber, a really fabulous philatelist. He asked me if I would come in with my dad to see him. He said he couldn't afford a real human being, like an adult, for hire.
So I was the first employee in the company. He treated me like a son for almost 10 years and taught me the business. I couldn't wait to get out of school every day. [I'd] take the bus and go see him and work until they threw me out of the place.
I was basically working full-time in the stamp auction business. When i was 14, school was secondary to me. I'm 56 now, so 42 years I've been involved in stamp auctions. I couldn't get a real job - I've gotta stick with stamp auctions!
What is your most interesting story from your years in the business?
There was a time when we were getting ready for the Washington 2006 International Stamp Show and had to go out to Bill Gross's home to gather up all the material for his fabulous US Classics exhibit.
We were hoping to try and win the Grand Prix National for him, and we made arrangements to meet him at his house in the afternoon. But he couldn't make it being the busy guy that he is. So when I got to his house, in this beautiful neighbourhood in Laguna Beach, on the door there's a little post-it note that says: "The doors are open, the safes are open, take what you need..."
[So] I walk in and his collections' worth tens and tens and tens of millions of dollars. The amount of trust he has, to just go and take what you want [from his] fabulous collection and close the door behind me... That's the kind of trust that we've been given. I think I'm probably most proud of that.
What would you say to people to get them excited about stamp collecting?
Well, if you have any ounce of interest in history, geography that sort of thing and you're fascinated by holding pieces of history in your hands - whether it's a rare stamp or a cover carried on the Pony Express, a rare banknote or a letter signed by George Washington or Queen Victoria - it's a perfect collectible to get into.
[They're] easily portable. You can buy it quietly, you can set things aside. The whole world doesn't know that you're doing it, necessarily. It's a great escape from the real world.
Many of our clients are successful business people that look for things at the weekend or at night when they can escape from the real world. It's a way to relax and enjoy history, and hold pieces of history in your hand.
If you give me an hour with anybody that has any of that 'gene' in them, that they like the sense of history and geography, I can get them to collect stamps in some way!
Would you recommend stamps as an investment?
Stamps can be a good investment, and many of my clients have sold their collections for substantial profits. But in 98% of those cases those collectors were not looking to make a profit. It happened because of how well they were able to form their collection using good taste and knowledge.
Of course if, you're going to buy an item for $10,000, $100,000 or a million dollars you have to look at it a little bit as an investment - to say "Jeez, I hope I can at least get my money back."
But the one thing about stamps, and I often say this... You can go bowling every weekend and have a great time and have all the memories and have all the plastic trophies and have a lifetime of good memories. But when you're done, that's it. That's all you have.
With stamps, you can collect, have all the memories and all the friendship that goes with the stamp shows and meetings... And, in the end, you still have your stamps. You can sell them and they can actually go up in value.
So, stamps can be a good investment. But, just like anything else, you really need to know what you're doing; invest the time and get the knowledge. And if you don't have the time, then you need somebody that you can really trust to help advise you.
What advice would you give to someone who's just started out in stamp collecting?
Before spending a lot of money, learn as much as you can. Where most people get disappointed is that they're very vigorous in their new purchases. When they get started, they're very excited and they often make purchases that maybe later on they regret.
But it's part of the learning curve... So, I would just say learn as much as you can beforehand, even before you spend any money, by getting lots of different auction catalogues. You can look on the internet for retail price lists. To me, part of the fun of it is learning about the hobby and what direction you want to go. So take it slow.
If there's someone like Bill Gross - [although] you don't have to be like Bill Gross - someone who's putting in a substantial amount of money, then they really do need to seek out the advice of somebody they can work with, together.
There have been a number of dealers who are well-known for handling private clients and giving them advice and spending time with them long before they spend any money.
Spink Shreves is auctioning The Joseph M Mahfood Collection of Jamaica (tomorrow in New York, January 28) which he amassed over decades. What drives a collector to part with a collection they've dedicated so much time and money to?
Well, in his case it's been a lifelong love of his. [Mr Mahfood is] a well-known successful business man in Jamaica. He just decided that he had taken the collection as far as he could have. It's kind of laid dormant for the last 10 years.
[He] decided that it was time, given his age and so-on, that it was better to sell the collection so that it could be shared with others. Now it's time to release it, to let others enjoy it.
We were fortunate that Mr Mahfood selected our firm. So I flew to Jamaica and spent several very nice days with Mr Mahfood, going over the collection. You could tell he really loved it.
 The Canadian Black Empress: 'I've never seen a stamp of that rarity or that |
[In Jamaica] you don't have to spend millions and millions to put together a world class collection. That's what makes it interesting to people. You can put together truly world class collections without having to spend a million dollars.
How do you see the global markets for stamps evolving in future years?
One of the reasons that we chose to join forces with Spink, 3-4 years ago, is that Tracy [Tracy Shreve, Chief Financial Officer at Spink Shreves] and I could see that the market was becoming was becoming a global market. But stamps were lagging behind.
[Now] we can see emerging markets in China and India, Latin America becoming much more influential in the bidding in our auctions - particularly since we made it so easy to bid live during the auctions on the internet.
It became so accessible to people that now it is truly a global market. US buyers no longer dominate as the world's most important buyers. I mean, there are important buyers from every far-flung part of the world.
I don't want to say it 'saved' the stamp auction business, but it certainly kept us from becoming a sleepy tired old business. It really invigorated the US by opening it up to the world.
What's interesting is, in US philately, some of the best buyers of US stamps aren't in the US anymore. There are important buyers of US stamps in Hong Kong, people in the Czech Republic, the United Kingdom...
If something was getting weak in one home country, there would be other countries that would help pick it up. So I'm grateful for the way the market is becoming more global.
Are you seeing a greater presence of buyers from China, or any other burgeoning global markets, at your auctions?
Yeah, China is the model of that, where the Chinese stamps have absolutely exploded. But the Chinese typically collect their own [stamps] right at the moment.
You're going to find - just like other countries did - that, as they mature as collectors, there's only so many Chinese stamps to go around and not everybody in China can own them. They're going to look outside of their own material to say "well, what were the origins of stamps?"
So maybe they'll want to start collecting Great Britain Penny Blacks, because that's an interesting offshoot.
The Indian market, too, is white hot. And once they find that they just can't satisfy their collecting needs with their own material, they're going to look elsewhere. That will really help certain countries to explode in price.
I can't tell you what it will be or what they're going to branch out into. I would think that they're going to look to classic areas to start collecting: US or the United Kingdom or maybe France or something like that.
Have you noticed any new trends in stamp collecting?
For really great material of any country of any area - something really special, what I like to call "sexy", whether it's $200 or $200,000 - the market is very strong for it. But it's gotta have eye appeal and desirability.
But if it's another copy of a commercial stamp from any country (a commercial stamp being one that you see it all the time, it's readily available. Yes it's 500 dollars or 5,000 dollars, but it's kind of boring to see) that market is slipping, because that requires large numbers of people collecting to help push up the price or the more commercial material.
Until the global economy improves, commercial material will suffer a little bit. It requires the guy who used to spend 10,000 dollars or pounds a year on his stamps. He liked doing that, but now he has either lost his job or he fears that he might lose his job. He's totally out of the market at the moment.
But the people who spend significant amounts of money on stamps feel very comfortable buying their stamps because they seem to hold their value. It still gives them pleasure, so the higher end of the market is showing the greatest strength.
Who do you think is 'the world's most important collector'?
It would have to be more by era, I would think. Because there were different financial considerations and so-on. I think certainly, in the US, Alfred H Caspary has to be considered one of the giants of the first half of the 20th century.
And then there's many people who think that John Boker [or New York City] was the greatest philatelist of the latter half of the 20th century. But in today's world there are a handful of collectors who are known who as 'major collectors'.
Bill Gross being one of them. But there's Joseph Hackmey in the UK who's built multiple world-class collections. Erivan Haub in Germany, one of the world's billionaires, he's built a fantastic collection. So there are a handful of people who could possibly carry the title of the 'world's most important collector'.
Are there any lots that you're especially looking forward to in your January auctions?
Well, the Black Empress is certainly one of them. I've been in the business my whole life, four decades and I've never seen a stamp of that rarity or that age, a classic stamp, in that perfect a condition.
A lot of stamps just represent commissions to us. This stamp excites me. It's remarkable that it still exists in the condition that it does. So, that I'm really looking forward to seeing. If it's appreciated as much by the collectors as it is by me...
The only trouble with that stamp is if you buy it and you say "well i'm going to collect all my classic rarities only in that condition." Well, you can't do it. You've set a high standard right from the beginning.
 An Abolition of Slavery stamp from Joseph M Mahfood's collection |
The Jamaica sale is interesting to me because there's a lot of material in there that looks kind of innocuous or it seems small; there's only two known or some or the proofs are unique, but you can buy them for $1,000-2,000.
We have a number of people who are flying in especially from out of the country to come to the sale. I've always liked the genuine 'collector collections' like Mr Mahfood's, where it hasn't been on the market for a long time. It tends to bring people out of the woodwork, so I'll look forward to that.
And do you have any tips or upcoming highlights in 2011?
Well, you just never know what's coming up... One of our collectors' series sales in March will have some unusual things. As an example, this is an interesting thing I picked up just yesterday...
I have no earthly idea how well it will do. But in Mexico there is a very famous set of stamps, a very popular set from 1935 called the University Set. It has several different values, both regular issues and air post. It's one of the iconic sets of Mexico.
Just the other day, in New York, i picked it up from an old estate from somebody in Mexico. They just loved that set when it came out in 1935 and bought 100 complete sheets of it. So we're going to make one lot out of this. It'll catalogue at $0.5m.
So someone will get control of 100 pristine sets and full sheets of that. You can set that aside and dole out the sets over the course of your lifetime, as an annuity.
Well, good luck with your January auctions - we hope they go well!
Oh, I suspect they will. I never like to count my chickens, but these sales have the sense that they're going to do very well.
Next week: Charles Shreve's insider's perspective on Bill Gross and the $2.97m Inverted Jenny/Z-Grill swap...
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