Collection of a lifetime

Bill Gross got into stamp collecting after his mother spent years buying and stocking up sheets of stamps. She was setting them aside, hoping that, one day, they’d fetch enough money so she could send her son to college.

His mother’s stamps turned out to be worth less than the pennies she paid for them. But her boy did go on to college, only to become a billionaire bond trader.

Gross, a Laguna Beach resident and founder of the Newport Beach-based Pacific Investment Management Company (PIMCO), now owns some of the rarest U.S. stamps. He has just donated $8 million to the Smithsonian’s National Postal Museum in Washington D.C. for the creation of a 12,000-square-foot exhibit space. It is to be called the William H. Gross Stamp Gallery.

He’s also lending the museum three items from his prized collection of philatelic objects. These items are a 10-cent George Washington stamp, dated July 2, 1847, a cover from the Pony Express mail service, and a bloc of four 1918 “Inverted Jenny” stamps.

Gross laments that, as with Beethoven’s symphonies, there’s an only finite number of the rarest U.S. stamps. He has a complete set.

“That’s the problem with stamps, once you fill in all the spaces, there’s not really any place to go,” Gross said.

“There’s nothing more to do in terms of the collecting aspect. That’s just the way it goes,” he said. “I faced the same problem with classical music 20 years ago when I recognized at some point, I would hear all that Mozart and Beethoven had created and that would be it. It’s not like Jay-Z or whoever creating something new. Nothing new is being created.”

Now, through his monetary gift and loan of his prized items to the Smithsonian, Gross hopes to share his love of stamps with others.

A valuable mistake

Gross’ collection is so valuable that, at auction, the bond fund manager bought a block of Inverted Jennies — similar to the block of Jennys he is lending to the museum — for $2.97 million.

The stamps are called Inverted Jennys because they bear the upside down image of a bi-plane, which resulted from a printing error. Only 100 of these prized stamps are known to have survived. A block, such as the four Jennys, is even rarer.

“Mistakes are great for collectors because they are very valuable,” Allen Kane, director of the National Postal Museum, said in a phone interview from Washington. “Once you have a block of four, it’s amazingly rare.”

The 19th century envelope that Gross is lending came from a Pony Express rider’s bag recovered in the desert two years after some hostile American Indians intercepted the mail carrier and scalped him. “I had thought these three particular pieces would really attract people to the museum, even people who don’t really care about stamps,” Gross said.

Gross completed his collection of U.S. postage stamps dating to the 1800s with his acquisition of a Benjamin Franklin Z-Grill 1-cent stamp. The 1868 stamp is one of two known to exist. The New York Public Library owns the other, which is on loan to the National Postal Museum.

Gross swapped a block of four Inverted Jenny stamps with noted philatelist Donald Sundman for the Z-Grill stamp. When a FedEx package arrived at Gross’ home containing the prized Z-Grill, his wife, philanthropist Sue Gross, intercepted the box and its precious contents and decided to have a little fun.

A skilled painter, Sue Gross made up a quick replica of the Z-Grill, only she replaced the words “One Cent” at the bottom of the stamp with “One Peso.” She then placed the fake back into the FedEx box and waited for her husband to arrive home.

“I took one look at it and said ‘This isn’t my stamp,’” Gross said, recalling his eagerness to open the package. Sue Gross’ counterfeit Z-Grill now sits alongside Gross’ genuine one in his stamp collection.

“Purer stamp collectors would be up and arms about it I suppose,” he said.

No golden egg

He also recalled how his mother would go to the post office to buy the latest sheet of 3-cent commemorative issues, hoarding them as a means to finance his college education.

“It’s kind of like the ‘Jack and the Bean Stalk’ story,” Gross said. “One day, she said ‘Bill, take these stamps and convert them into the golden egg.’”

So a young Gross took the stamps to a stamp dealer, who informed him that they were worth less than what has mother had paid for them. “I took them back home, dejected,” Gross said. “My mother was near broken because this had been her lifelong dream.”

Gross ended up going to college with the help of scholarships. But he wanted to find out where his mother went wrong with her investment.

“It was a way to validate her original intentions and prove she had been right. She just bought the wrong stamps,” Gross said.