The design of the watermark consists of wavy lines crossing at right angles to straight lines positioned between 4 large letters - initials of the Printing Office of Government Obligations:

The size of each letter of the watermark is somewhat larger than the area of a single stamp. It is rare to find a large part of a letter on a single stamp. More frequently, the watermark letter will be found on a block of 4. On many stamps the watermark letters are not found at all, but rather only the wavy or straight lines of the watermark.
In some cases only the laid lines of the paper are seen.