Aerated Bread Co. stamp auctions for $12,500 in New York

A 5c red brown stamp which was produced for the Aerated Bread Company has sold as top lot in the Dr William A Litle Collection of United States Encased Postage auction, which was held yesterday (October 3) in New York.

1861 5c Aerated Bread Co stamp
The 5c stamp may never have reached circulation



The issuing of encased stamps originates from the US civil war, after the public began to hoard silver and copper-nickel coins, predicting the hard times ahead. This, combined with disruptions to trade caused by the Confederate forces, led to a shortage that made small transactions and giving change almost impossible.

Spurred by the recent Postage Currency Act, which allowed people to use postage stamps as currency, small-time inventor John Gault had the idea to produce encased stamps. These cases would protect the loose stamps from damage, while also being sold at a small mark-up of the stamp's original value.

Gault also offered various companies the chance to have advertisements die-stamped into the metal backing, further increasing his profits.

Starring at the top of the collection was a unique example of the 5c encased stamp produced for the Aerated Bread Company in New York. Gault had produced two denominations for the company, a 1c and 5c, with just one recorded example of the 5c known to have survived.

The auction house believes that, due to its extreme rarity and uncirculated condition, the stamp was made as a trial and may never have been put into circulation. The greatest encased stamp rarity, it sold for $12,500.

Following this was another 5c red brown, this time housed in an L C Hopkins encasement. Fewer than five of these stamps are recorded, with the example at auction one of the two finest in existence. It made a 71.4% increase on its $7,000 estimate, selling for $12,000.

Paul Fraser Collectibles has an outstanding collection of rare stamps currently available in our online store. For more of the latest news and investment advice, sign up to our free weekly newsletter.


 

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