The cancellation was done by a "Patent Cancellation". A Patent Cancel was a canceling device that defaced a stamp to prevent reuse. There were a number of solutions to the problem of permanently defacing the stamp, in general by destroying a part of the stamp's paper, and many of these were patented by the inventor. There were numerous devices(cancellations) used (tried) during the 1880's and be seen on the US Banknote issues.
Below is an example of a WESSON PATENT CANCEL. In this example the center points were "suppose" to puncture and cut the stamp paper. Unfortunately, it never worked properly. The "LEBANON" WESSON CANCEL is reportedly unique and used in Lebanon, Pa. (1881-1889).
