Three and a half hours into the auction at the Westbury Hotel in London earlier this year, Jason Chapman is smoking Old Holborn rolled in liquorice paper. In the inside left pocket of his blazer is the ‘Lake Taupo’. He has been assigned to guard it with his life. The stamp has a caramel brown frame, with ‘New Zealand’ at the top, ‘Postage Revenue’ and ‘4d Four Pence 4d’ at the bottom. In the centre is a circular vignette in blue depicting New Zealand’s central volcanic plateau, Lake Taupo and Mount Ruapehu, with two palm trees in the foreground. It is hard to see the illustration clearly because of two thick black cancellations which almost obliterate it, but this vignette is of some significance – it is upside down.

I feel a little guilty seeing the Lake Taupo for the first time in these surroundings – Jason and I are sitting on a small sofa in the Mount Vernon Room at the Westbury, a few feet from a pool of vomit, left behind by a woman accompanying the Australian Ashes team – when so many enthusiasts waited over half a century to set eyes on a stamp which they must have begun to doubt ever existed. The stamp was discovered in 1931 and in that same year vanished. ‘No one in New Zealand is known to have seen it, let alone possess a copy,’ wrote the philatelist Jim Brodie in an article for the NZ Stamp Collector in 1974. The most important 20th-century New Zealand stamp had gone missing.

I would like to think the story begins on New Zealand’s North Island one day in the late 1890s. One of Wellington’s early stamp designers, J. Gaut, is looking in a southeasterly direction across the blue expanse of Lake Taupo at a large volcanic crater out of which rise the snow-clad peaks of Mount Ruapehu, an active volcano standing just short of 2800 metres. He is perched somewhere on the west bank of the lake a few feet from a pair of palm trees and he captures this remarkable view in strict, stylised lines.

In 1898 the Government Printing Office in Wellington bought two new presses in order to print their own stamps for the first time. Until then, all New Zealand’s stamps were printed in England. Gaut’s design had been intended for the popular 1d stamp in the new issue known as the 1898 Pictorials, but when the plates arrived by steamer from England, it was found that the manufacturers, Waterlow and Sons, had prepared the plates for New Zealand’s first bi-coloured stamp in two sections, one for the outer frame and another for the central circular vignette. This meant that the sheet of Cowan paper on which the stamp was printed had to be passed through the machinery twice; in between, the plates had to be changed, slowing down the process considerably. As a result, the design was instead used for the less popular 4d denomination, intended for registered post. Its manufacturing process, which was an inconvenience to the New Zealand printers, held the key to the accident which created the ‘Lake Taupo’. On one occasion between the years 1902 and 1904 a printer was careless and passed the paper through the press for the second time the wrong way round. There was therefore a sheet of 80 4d Pictorials with their centre inverted – flawed, useless, printer’s waste. Just one was destined for greatness.

It found its way onto a package posted at the Picton Post Office, a few miles north of Blenheim on South Island. The stamp bears two strikes of the Picton cancellation of 21 March 1904, which may have served to disguise its rare quality. Where it went then is a mystery. The package and its address have not survived but perhaps it had the distinction of travelling in one of the last coach and horse mail vans: in 1904 the first combustion engine motor-car service was introduced by the New Zealand Postal Service.

For more than twenty-five years, the fate of the Lake Taupo was unclear. Then, in 1930, Jack Dennet, a farmer and amateur philatelist in Lincolnshire, discovered it in one of his old albums. Times were hard for English agriculture and Dennet was in trouble, having bought stock the previous year which was now depreciating at an alarming rate. Much later, he wrote in Philately magazine about the find:

One evening ... I took down from its shelf my old schoolboy collection of stamps, wondering and hoping that the whole lot might make a couple of pounds. Turning over the pages I came across one which had a solitary stamp mounted in the middle of it. Why it was stuck on a page to itself I had not the faintest idea and I still have not the slightest clue as to how it got there, or from where I got it ... but what was most important, this stamp of mine had its centre completely upside down! That was quite enough to raise my interest. An old Gibbons was turned out but I could find no mention in that catalogue of the variety ‘Centre Inverted’.

Soon afterwards, Dennet engaged the services of Plumride and Co., auctioneers and valuers, who submitted the stamp to the Royal Philatelic Society. On 30 January 1931, Thomas Hall, president of the Society, signed Certificate 14,764 of the Expert Committee, on which was written: ‘This stamp is a variety unchronicled and hitherto unknown to the Expert Committee. Having regard to the lapse of time since this stamp was issued, the Committee hesitates to express a very decided opinion upon the specimen, but after close examination they believe it to be genuine.’ Stanley Gibbons asked him how much he wanted for it.

On 21 March, the magazine Stamp Collecting announced that the Lake Taupo would go to auction, which it did at the end of the month. The auction turned into a contest between Tom Allen and Theodore Champion, two of the greatest dealers and collectors of the day. Allen lost and Champion returned with the stamp to his shop on the rue Drouot in Paris – a mecca for assiduous collectors. Dennet’s farm was saved with the £61 he was paid for the stamp. He later left farming and became the governor of Ford Open Prison.

Once again the stamp went to ground. During the Thirties, the brothers Maurice and Norman Williams, who founded Stamp Review, kept an eye out for any mention of the Lake Taupo in the specialist literature. There was not much to go on, aside from a report in Stamp Collecting giving details of the March 1931 auction, a short paragraph in The Postage Stamps of New Zealand a few years later and the annual entry in the Stanley Gibbons catalogue, which for years inaccurately described the Lake Taupo as being in mint condition.

There is little doubt that the Lake Taupo is unique. It is not valuable simply because it is flawed: the nature of the flaw is also significant. Flawed stamps known as ‘flat prints’, for example, are not considered to be ‘good’ mistakes. (A flat print occurs when the paper does not clear the press completely, and the press judders.) A flaw is more impressive if it is caused by a sheet of stamps passing through the press more than once. Inverted watermarks are exciting, but they can’t be seen very easily. The price and the value of the Lake Taupo are affected by its heavy cancellation. ‘You have to look very closely to see that it is inverted, which is probably why it was undiscovered for so long,’ says the New Zealand stamp collector Allan Berry. Even so, a stamp which may be considered very valuable by virtue of a flaw or because it is rare can lose that value if the experts get its provenance wrong.

The Royal Philatelic Society’s Expert Committee would have examined about eight hundred submissions in 1931; nowadays they handle about four thousand a year and use the specialised equipment of the British Library to discover whether a stamp is genuine. Even watermarks can be faked. A few years ago the Committee examined a British stamp of the 1880s which appeared from nowhere. They turned it down when they discovered it had been ‘skimmed’: someone had sliced the stamp in half and attached the back of one stamp upside down to the front of another.

Jack Dennet did not write about his extraordinary discovery for twenty years or more. When his account was published in Philately in 1955 it served to inflame curiosity about the Lake Taupo but did little to fill in the historical gaps. Since nobody knew where the stamp was, philatelists turned instead to two other questions: what happened to the other stamps on the sheet? Where did Dennet obtain the stamp? Rumours and theories gained currency. In 1971 the mystery was supposedly solved in an article by H.L. Chisholm in Philately from Australia: Mr Dennet had a brother in New Zealand who had posted the stamp on a letter. In the same article it was erroneously claimed that another – unused – inverted Lake Taupo still existed. The mistake arose because a picture of the stamp without the cancellation appeared as the illustration on a stamp printed in Aden. It was assumed that the picture had been copied from an actual stamp, but it is much more likely that it was based on a stamp that didn’t have the flaw and that the inverted centre was imagined.

Theodore Champion, the leading French dealer who acquired the stamp at auction in 1931, seems to have kept it for a while among his own rarities. In 1980 it was revealed that the mysterious Vicomte de Rosny bought the stamp from Champion sometime before the Second World War. The Vicomte was an acclaimed stamp collector, but a shadowy figure who shunned publicity. The Lake Taupo, it is said, was hidden, along with the rest of the Vicomte’s collection, in a Paris cellar during the German occupation. In 1975 Stanley Gibbons revalued the Lake Taupo at £700. This may have been an adjustment for inflation, although it may imply that the stamp was sold privately shortly before.

On 15 October 1980 the Lake Taupo resurfaced. The auctioneers J. Robineau et Cie sold their Lot 391 to the American dealer Robert Lyman of New York State. It is unclear who he was acting for, although Norman Williams believes he was buying on behalf of a syndicate in Canada. The stamp was estimated at 50,000 frs; it sold for 110,000 frs or about £10,500. Two years later it finally returned to New Zealand, lent by a ‘wealthy American’ – most probably the 1980 purchaser – to the national stamp exhibition, Palmpex ’82. During the summer of 1987 Norman Williams contacted Jack Dennet, who by then was less clear than before as to how he came into possession of the stamp, but was quite sure he had no brother or any friends or relatives in New Zealand.

In 1991 Bridger and Kay hosted an auction in Guernsey. The Lake Taupo was Lot 624 and failed to sell in the room, but it’s widely believed that it was bought privately by someone after that sale, and has been in the same hands ever since. The following year Stanley Gibbons re-valued it at £25,000. Dix Noonan Webb claim that the current owner is a descendant of Tom Allen, the original underbidder. It is more likely that the Lake Taupo was bought by a dealer involved with the Bridger and Kay auction and that he has got his fingers burnt: the stamp has kept re-appearing of late but it never sells. On 6 November 1992 it was estimated at 75,000 Swiss francs for the David Feldman Rarities of the World auction in Zurich. On 11 December 1993 it was back in New Zealand again, as Lot 237 at John Mowbray’s Stanley Gibbons auction and again it didn’t sell.

It is not unusual for a stamp to come onto the market at a price higher than it is worth. The vendor is testing the water to see if anyone will bite, but it is extraordinary that the Lake Taupo has appeared in the salerooms more than once with reserves so high that it failed to attract a buyer. Those who have a passion for this kind of thing will be watching it closely – wealthy collectors who specialise in stamps with inverted centres, as well as anyone who collects New Zealand’s 1898 Pictorials. The presence of the Lake Taupo in their collection would almost certainly guarantee one of the much coveted gold medals at an international stamp exhibition – but £50,000 is a high price to pay for a medal.

There is always an expectant whisper followed by a saleroom hush when the star turn is introduced at an auction. James Grist is the auctioneers’ stamp expert at the Westbury Hotel sale. He introduces Lot 770 – the last of the day – over the mahogany lectern: ‘This lot opens in the room at £31,000.’ In no time at all it reached £37,000 – and once more failed to sell.

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