STAMPS FOR SINNERS AND OTHER TAXPAYERS

WASHINGTON - A slice of 20th-century American history will be
auctioned for the first time on Saturday in New York, when the
National Postal Museum, part of the Smithsonian Institution, sells
some 35,000 examples of ornate and colorful revenue stamps.

Among the stamps offered for sale are ones once affixed to wine, beer,
narcotics and even marijuana as proof that "sin" taxes had been paid
on those items. The federal government stopped using such stamps
decades ago.

The liveliest interest has been in the marijuana stamps, which were
used starting in 1937 when the Marihuana Tax Act was passed to
control, and, some say, outlaw, the use of cannabis. Only a few such
stamps are known to be in private collectors' hands. The stamps, which
are yellow, blue, green and red, are being sold singly and in sheets.

But the sale, which is expected to raise $2 million for the
Smithsonian's National Philatelic Collection, includes a broad variety
of other revenue stamps for silver, snuff, filled cheese and distilled
spirits. Also on auction are stamps for transactions of documents and
stock transfers.

Often confused with postal stamps, revenue stamps were first issued in
the colonial era more than 250 years ago. Their use on a large scale
began to finance the Civil War's estimated $3 billion cost. The Union
government issued 102 different stamps over the four years of the war
to tax almost every commercial document as well as items including
matches, medicines, perfumes and even oleomargarine.

Using stamps for some transactions, as well as certain so-called sin
items, continued until the 1970's. Starting in 1954, the Internal
Revenue Service began donating 1,900 varieties of unused or duplicate
stamps to the philatelic collection, which was later housed by the
postal museum.

After debating about how to release the stamps but not flood the
market, the postal museum, which houses about 7.8 million unused
revenue stamps, decided last year to retain about 400,000 examples and
auction others.

The decision set off a controversy among stamp collectors and dealers
because the museum said it would burn some stamps. Collectors and
dealers fought that, and the museum agreed that it would, instead,
mark some of the stamps with ink to differentiate them from more
valuable mint-condition examples, and sell the marked ones as well.

Among the stamps expected to bring the highest sums at the auction are
three rare 1941 series wine stamps, unmarked, each of which is valued
at $25,000. There are also three examples of another wine stamp, the 1
7/10 cent stamp, which are each expected to fetch about $10,000,
because there is only one recorded example in private hands. These
stamps are also unmarked.

Stamps on liquor are often the largest ones because they were attached
to wine cases or beer barrels. Narcotics stamps charged one cent an
ounce for opium, coca leaves and drugs derived from those substances.

Other items expected to bring high prices are sheets of stock
transaction stamps, valued at $40,000 to $50,000 each, and a sheet of
18-cent narcotics stamps, distinctive because of their long, thin
shape, which were affixed to bottles of medicines. That sheet is
expected to bring $10,000, according to the pre-auction estimate.

Still, the marijuana stamps have elicited the most
interest.

"About 50 percent of all the questions we are getting relate to the
marijuana stamps," said Ted Wilson, registrar of the postal museum.

"These are not collectors, but are people who are just fascinated by
them," he said.

Marijuana was among the drugs set to be regulated under the 1914
Harrison Narcotics Act, but the pharmaceutical industry opposed such
regulation, arguing that the substance was not habit-forming. As a
result of this pressure, marijuana continued to be sold legally for
medicinal and research uses.

After decades of debate over its dangers and how to regulate it
uniformly among the states, which treated marijuana with different
degrees of strictness, the federal government taxed it starting in
1937, said Richard Friedberg, a revenue stamp dealer in Meadville,
Pa., who wrote the foreword to the auction catalog. Doctors and
dentists had to pay the tax if they wanted to continue prescribing the
substance for patients.

The Marijuana Policy Project, an independent research group, and other
researchers say the stamps were not that widely used, and that the
effect of the 1937 law was to outlaw marijuana. In 1971, marijuana was
included in the Controlled Substances Act as an illegal substance.

Adding to the marijuana stamps' aura, about 37 of them were stolen
from the philatelic collection in the 1970's. Three of those were
recovered. Of the others, some had serial numbers, but none have ever
appeared for sale, Mr. Wilson said.

Proceeds from the auction, to be held at the Four Seasons Hotel by
Matthew Bennett International, will be used to buy early United States
postal stamps and early Confederate state stamps for the stamp
collection, said Wilson Hulme, the postal museum's curator of philately.