CTO - But What For?

Well, it kind of depends on what the definition of CTO is. Stamps cancelled by the postal authority without carrying mail have been around since the 19th century. From that era, most of them were "remainders". Basically the post office had a lot of unsold stamps that they wanted to get rid of, and rather than destroying them or letting them sit unsold, they just cancelled them so they couldn't be used for postage and then sold them to dealers at a steep discount off face. If you mean stamps that were issued CTO from the get-go, I'm not exactly sure, but I'm pretty certain it goes back to at least the 40's or 50's and probably quite a bit earlier. The former Warsaw Pact countries were issuing CTOs pretty regularly in the 50's and Scott even values used stamps of those countries from that era as CTO rather than postallly used.

I am confused as to the CTO: I have always been under the impression that the authority issuing postage stamps would prohibit the overseas sale of large quantities of mint postage to speculators of currency value. My thoughts exist that these speculators would purchase postage & when the currency market favored, sell back these quantities to realize a profit based on the currency exchange rate. This was a result of the prohibition of purchasing large currency amounts with foreign currency and exchanging the currency back when rates favored. Although I have read and pondered the 'reasons' given in the many threads of this forum, it seems that the non-regulatory reasons far outweigh those of the issuing governments.

Hard to picture a foreigner buying mint stamps from a CTO-class country as a vehicle for taking a long position on the value of the currency of that country, partly because you would want to take a long position in the first place (betting on the value of a CTO-class country's currency to rise), and partly because you would need somebody to buy those stamps back from you (at very little discount) some day ... and they would need a use (or have a market) for them.

For an outsider, if foreign exchange speculation were the goal, why not just buy CTO-Land Government Bonds?

CTOs were invented for the hobby.

Cheers,

/s/ ikeyPikey

Currency speculators would buy actual currency or bonds instead of stamps. Currency and bonds are far easier to buy and sell. The postal administrations of the issuing countries wouldn't buy the stamps back at face value, you'd have to sell them to other collectors for whatever you could get. Large quantities of common mint stamps - particularly for countries that regularly issue CTO's - would sell for a small fraction of face value. As opposed to coming out ahead, it would be a virtual guarantee of losing one's shirt. Post offices ususally won't sell mint stamps below face value, but they'll gladly sell you as many as you want at face value or above as there are few potential risks.

The Republic of Cyprus despite its conservative issuing policy does sometimes over issue and may be left with stock. Below are some examples of stamps (in the Cyprus Pound currency) that had remained in stock after Cyprus had switched to the Euro. The post office 'cancelled' large amounts of stamps (by hand)and uses these as promotional give-aways and gifts to collectors.

eligies said:



Actually, since stamp collecting was big business, lots of fledging countries and revolutions printed massive amounts of stamps to sell to the philatelic trade to help fund their cause. In fact, in some of these countries, the majority of the stamps were printed abroad and shipped directly to the philatelic trade, never coming close to the country of issue. While these aren't CTO Stamps Here are a few examples of stamps issued to make money off of the philatelic trade that we are all probably familiar with:


Republic of Northern Epirus


Tannu Tuva


Theriso revolt in Crete


Azerbaijan

A 1905 issue of Gibbons Stamp Weekly defines cancelled to order as "Unused stamps are cancelled to order by certain countries for sale to stamp flats, i.e. the unused stamps are cancelled with an obliterating stamp by the sheet for certain dealers for sale to softy little boys who mistake them for genuinely used stamps."

"Softy little boys." Hmm.

The earliest use of cancelled to order that comes up in Google Books is in an advert that appeared in The Curiosity World, Volume 3 which was published in 1888. There are additional uses from the 1890s, and some of these also imply that it was individuals doing the canceling, perhaps with the blessing of the issuing country.

As I'm in Philately for more than 35 years, and lot of material in CTO condition I sold to Soviet Union Collectors, I know well, that this countries (mentioned in previous post) as Sharjah, Fujeira and lot of St. Principe, have HUGE quantity printed, there is cancel even printed on stamp in printing house, even not used cancel machine! I still don't understand world catalogues, whcih register it as valid postage stamp, if we all know, that if You try to use it inside country of origin (as countries under "dune", "phantom" etc mark) - You will be never allowed to use it as payment for postage. Most of it are sold to big dealers outside "mother" country! What worry me, that trend is taking tool also on more serious and modern countries, as recently discovered, Slovenia, Croatia, where they made CTO available, just to sold stock out. Yes, selling prices are sometimes so low, that it is not worth postage cost of delivery order. To all of my client, I suggest, if they buy used material, to avoid CTO, as we all know, that it is NOT REAL CANCELED (mean real, when stamp/s are used on traveled mail)!

IkeyPikey, you are thinking of Nicholas Seebeck, of the Hamilton Bank Note Engraving and Printing Co., with the 'free stamps' for Latin America countries in the late 1800s (1889 or 1890 until his death a few years later).

I've always defined CTO as stamps which have been cancelled by the issuing authority (or their agent) specifically to sell into the collector market. That includes remainder stocks of older stamps, such as can be found from Spain. They don't have to be printed as part of the initial production, though that has happened often enough. They are offered at a discount off face value though. Favor cancels are similar, but since the stamps were sold at full face value before being cancelled I differentiate them from CTOs.

I'm sceptical about the idea of cancels being printed as part of the stamp design. It's possible, but in my experience the great majority appear to be printed over mint stamps in a separate operation. I guess they aren't hand-stamped, as an innocent beginner might think, but run through a second printing machine with multiple cancellations printed in just the right positions.

Ringo, I have seen CTOs that have machine printed quarter cancels in the exact same position (with regards to the design) on each stamp, hinting at least that the cancel was included as part of the initial printing process. Note that in these cases a block of four would show four separate quarter cancels. More typically CTOs had their cancels placed centered on the junction of four stamps, leading me to believe that cancel was placed subsequent to printing. With older CTOs that cancel is often placed a bit haphazardly, leading me to believe the cancels were applied by hand to the sheets.

At some point, one of the CTO producers figured out that you don't have to apply gum to the sheets. Why bother? After all, they are supposed to be a used stamps, and it eliminates another cost.

I was told some years ago that collectors of DDR CTOs view hinging of these stamps as a "no no". Your CTOs should be in never hinged, postally fresh condition.