Commentary No. 32 - 17 April, 2002
The Crash of 1984 - 1991
The past few years have witnessed a steady growth in the value of Canadian stamps. This has been accompanied by an unprecedented increase in the number of varieties being recognised in the Scott and Unitrade catalogues. This growth in value has taken place at a time of long-term expansion in the world economy accompanied, at least in the past few years, by record low interest rates in North America and a high level of liquidity in the banking system
As we look back at the 1960s and 1970s, we see three periods of rising prices. These were, in fact, remarkable periods, but they were followed in the mid-1980s by an alarming crash in prices, particularly in the 1984 - 1991 years. The decline was certainly not expected and, when it came, was recognised by catalogue publishers, such as Scott, well before collectors and auction houses accepted the fact.
Accompanying this article are two schedules. Schedule A provides a survey of Scott prices for a sampling of dollar stamps from 1961 to 2002. Schedule B provides a survey of prices, also from 1961 to 2002, for a sampling of stamps from the classic period.
High-value Dollar Stamps (Schedule A)
It is astonishing to look back to the 1960s and 1970s and see the strength of the upward trend that took place in the values of the modern dollar stamps. Their catalogue values doubled between 1961 and 1971 and then tripled between 1971 and 1978. They then doubled again in value between 1978 and 1983 before levelling off. We remember well the exciting markets in the late 1970s when "investors" were accumulating dollar stamps in large numbers. The market was purely speculative, as there was in fact no shortage of supply. Investment houses were putting together "stamp portfolios" and marketing them as investments with great potential. In many cases, these portfolios contained stamps of ordinary quality and little rarity as their owners subsequently discovered to their dismay.
In the early 1980s, the monetary authorities in the U.S. and Canada raised interest rates to levels not seen in our lifetimes in an attempt to curb inflation and get some control over the economy. This had the result, amongst other things, of ending the speculation in collectibles such as art, coins, antiques and, of course, stamps. The effects were profound. The prices for Canada's high value stamps, such as those shown in Schedule A, came crashing down. The $1 Parliament (Scott 159) which peaked at $425 in 1983 fell to $125 by 1991 after a series of declines. The $1 Chaplain (Scott 227) which peaked at $125 in 1983 fell to $32. Investors were stunned and any attempt to sell their accumulations of stamps into the soft market of the day brought a weak response. Even today, 15 years later, there is little demand for these dollar issues, with the exception of the $1 Parliament.
Stamps of the Classic Period (Schedule B )
It is a bit surprising to see how similar the trends were with respect to the stamps of the classic period. As with the dollar stamps, the 1960s and 1970s saw noticeable appreciation in the value of the early classic material. Their catalogue values tripled between 1961 and 1971 and then doubled between 1971 and 1978. They then doubled again between 1978 and 1983 before levelling off as per details in Schedule B. However they were not subject to the same degree of speculation as the later dollar stamps for the obvious reason that they were much rarer and not readily available. Their value did eventually come down a few years after the dollar stamps. It was during the years 1987 - 1991 that they finally got hit. In one year, the 3-cent Beaver (Scott 1) fell from $675 to $350. The $5 dollar Jubilee (Scott 65) fell from a high of $1750 in 1983 to $800 in 1991.
Scott No. 1
Scott No. 65
Scott No. 23
Scott No. 100
Little happened to these issues for the next seven years and then, in 1998, a strong upward surge in prices started. The 3-cent Beaver (Scott 1) jumped from its low of $350 to $800, the 1 cent Large Queen (Scott 23) from $400 to $800 and the 7 cent Quebec Tercentenary (Scott 100) from $27 to $100. Thus there was a very different experience in the more recent years with these older stamps. They recovered their values strongly while the more modern dollar values have languished.
Those who went through those years in the 1980s when the stamp prices crashed will not forget that experience for a long time.
©2002, Canadian Stamp Auctions Ltd., Montréal, Québec, Canada