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When a stamp collector is charged with being extravagant, with spending money lavishly and foolishly on a mere hobby, he may very justifiably reply that even his most extravagant spendings may be regarded as an investment.

The ordinary investor in, say, industrial securities is fairly content if he can, with a little risk, secure a steady six or seven per cent. If he launches out into more speculative shares, yielding higher rates of interest, he must be content to face a much greater risk of the capital invested. Now, the severest test of an investment is the yield of interest over a series of years covering periods of depression as well as periods of prosperity. The stamp collector who has used ordinary discretion in his purchases may confidently submit his investment to this test.

Some years ago, when I was writing in defense of stamp collecting as an investment, 1 received a very indignant letter from a collector who had made a large collection, complaining that he had then recently endeavored to sell, but could get only a very small percentage of his outlay back, and that the very firms from whom he had bought most of his stamps scouted the idea of paying him anything like what they had cost him. He therefore ridiculed the idea that stamp collecting could be regarded as a safe investment, as in his case it had been a delusion and a snare. He was quite right, and it is still possible to make big collections—of, say, five thousand, ten thousand, and even larger—of stamps that are never likely to appreciate, and it is possible to buy those stamps at such a price that any attempt to realize even a small percentage of the original outlay must result in a woeful eye-opener.

Let me explain. In the stamp business, as in all other branches of commerce, there are wholesale and retail dealers. The wholesaler buys by the thousand stamps that are printed by the million. I refer, of course, to used stamps. In some cases the price paid per thousand is only a few pence for large quantities that run into millions. The wholesaler sells to the retail dealer at a small advance per thousand. Those stamps the ordinary dealer makes up into packets at a further profit, but still at a comparatively low price. Good copies he picks out for sale in sets and separately. Those have to be catalogued. Therefore, the catalogue price of common stamps bought and sold by the million eventually comes before the general collector at “one penny each,” and the man who makes a collection of common stamps of the “one penny each” class can scarcely be expected to realize a fortune out of his stamp collecting. When he offers his gatherings of years to the self-same dealer, and asks, say, only the half of what he paid, he is astounded when the dealer has the audacity to tell him frankly, “I can buy most of those stamps at a few shillings per thousand, and you want an average of a halfpenny each for them!” “But,” retorts the collector, “I paid you one penny each for them years ago, and now you won’t give me half that amount. A pretty thing investing money in stamps!” The reply of the dealer will be, “My dear fellow, you have put your money into the wrong stamps. I bought, and can still buy, those stamps wholesale at a few shillings per thousand, some of them at a few pence per thousand; but I have to pay clerks for handling them and sorting them out, other assistants for cataloguing them, and the printers for printing the catalogue, so that in the end I cannot afford to sell them separately for less than about one penny each, but if you want a few thousand of any value I can sell them to you at a price enormously below what you ask for your collection.” The collector’s eyes are opened.

It is impossible to get away from the necessity of regarding stamps as an investment. Even the schoolboy cannot afford to put his shilling into stamps unless he can be fairly assured that he may get his money back at critical periods, which will crop up even in school life. Indeed, it may be said that there are few, if any, stamp collectors nowadays who do not put more money into stamps than they could afford to do if there were not some element of investment in view. In some instances large fortunes are actually invested in stamps, and I was only recently told of a collector who had taken his money out of a very profitable business and put it into stamps, and had netted very much larger profits than he ever realized in his regular business. But to do that sort of thing requires a profound knowledge of stamps and a ready command of a very large banking account.

Generally speaking, the best countries from an investment point of view are British Colonials, especially those of the small colonies that have small populations, and therefore very small printings of stamps. Obviously, countries that put stamps into circulation by the million can never be a very good investment, so far as their common values are concerned. Those who buy with a keen eye on the investment purpose, always buy unused copies of uncommon values. Unused are not likely to depreciate, and they may appreciate.

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