Postal Notes
and
Postal Note Stamps
The following is a quote from Scott 1997 Specialized Catalogue of U.S. Stamps:
Postal notes were issued to supplement the regular money order service. They were a means of sending amounts under $1. One or two postal note stamps, totaling 1¢ to 99¢, were affixed to United States Postal Notes and cancelled by the clerk. The stamps were on the second of three parts, the one retained by the post office redeeming the Postal Note. They were discontinued March 31, 1951.
Scott also says:
Postal note stamps exist on postal note cards with first day cancellation.
Here is a postal note in the amount of $.01 from a recent offering on eBay by undercov which illustrates a first day of use of the 1¢ postal note stamp properly affixed to a postal note card:


First Day of Use -- March 1, 1945
U.S. Postal Note stamp PN1

As you may see, the postal note was inspired, in part, by the growth of the punched card processing business as well as the accounting processes used in the Post Office to keep track of money orders. Note the classic admonition: DO NOT FOLD, MUTILATE OR SPINDLE.  The handstamp cancellation reads DETROIT, MICH HAMTRAMCK RD M. O. B.

At the time, money orders were viewed as securities and were subject to careful accounting. The Post Office feared the loss of money order books which could be written at the maximum amounts ($200) and cashed anywhere by the thief. One of the features of money orders was that there were columns of numbers on the left side of the money order which were torn using a tool so that a maximum value -- for example "not more than $6" -- could be established for the money order to prevent fraudulent increases in the value of the money order. Money orders were filled out by hand by the issuing clerk. The clerk also filled out a stub similar to a check stub which was the post office record of the money order. The accounting process was similar to checkbook balancing. This was very labor intensive for money orders.

The postal note was viewed as a way to reduce the handling cost of small money orders. Stamps would be issued to do most of the accounting at issue and a card would be prepared for the user to be given the payee. There are three parts to the card. The right hand portion was retained by the purchaser and permitted him to have a paper record of the card. The next portion of the card was where the postal note stamps were placed and cancelled. This portion of the card was used as a counter to balance the drawers of the paying postal clerks. (Postal notes could only be redeemed at a Post Office.) The remaining portion of the card was used for the addressee's name and address. It was also punched to permit mechanical processing.

Richard Freiberg, in his column, "U.S. Revenues" in Linn's Stamp News of June 11, 1994, described Postal Notes as follows:

Postal notes were similar to money orders, except that postal notes were redeemable up to two months from date of issue, but they could not be transferred by endorsement, and they were available only at first- and second-class post offices.
Postal note stamps were issued in denominations from 1¢ to 9¢ and 10¢ to 90¢ which permitted making a postal note in any denomination up to 99¢ (the limit) by using only 2 stamps.

The fee for the postal notes was 5¢ in addition to the amount of the stamps. This rate was increased to 8¢ on January 1, 1949.

The Postal note stamps were printed exactly like the definitive stamps of the period. Two rotary press plates with 400 subjects in 4 panes of 100 were prepared for each denomination. The stamps were perforated 11x10½.

The late George W. Linn, the publisher of Linn's was a student of the issue and identified different printing and paper varieties. His collection was acquired by John W. Watts who wrote about postal notes in the American Revenuer and Modern Postal History Journal.
 

Afterword

Thanks to Jim Hawkins who offered this as eBay item #120459606 closing 06/27/99 and generously agreed to permit its use in this piece and to pennystamps whose enthusiasm for 1¢ items inspired the research.

Copyright 1999, James Watson