First Session -- August 25, 1998

Attendees:

Board of Directors: President John Hotchner; Immediate Past President Randy Neil, Vice Presidents: Dr. Peter P. McCann, Patricia Stilwell Walker, Gordon Morison; Secretary Janet Klug; Treasurer John Apfelbaum, Directors-at-Large: Jeanette Knoll Adams, Lloyd de Vries, Ann Triggle, Wayne Youngblood.

Staff: Executive Director Robert E. Lamb, Attorney David Flood, Director of Shows & Exhibitions Ken Martin, Controller Scott Frazier, Director of Library Services Gini Horn, Director of Sales Tom Horn, and Editor Bill Welch.

Guests: Lois & Bob de Violini, Nanette Hotchner, Keith Stupel, Rob Haeseler.

Call to Order:

The meeting of the American Philatelic Society's Board of Directors was called to order by President John Hotchner at 8:05 p.m. in the Camino Real meeting room of the Westin Hotel in Santa Clara, California. President Hotchner welcomed Board Members, Staff and guests and asked the guests to introduce themselves indicating that the Board was always delighted to have visitors to its meetings.

President Hotchner introduced Keith Stupel, who unveiled the brand new Champion of Champion Award, a large silver bowl with the names of each previous Champion of Champion Award winner engraved on an individual disk on the base of the bowl. Mr. Stupel donated the trophy to the American Philatelic Society, and it will be retained and displayed at the American Philatelic Building in State College, Pennsylvania.

MOTION: A vote of thanks to Keith Stupel for producing and donating the Champion of Champion Award to the American Philatelic Society. Moved by Triggle. Seconded by Walker. Passed unanimously.

Announcements: President Hotchner thanked the staff for introducing several of the initiatives that appear on the agenda and noted that we have items on the agenda from our newest Board members. We have people active and thinking.

President Hotchner introduced cards of thanks he has been sending to members at the rate of 100 per month on a random basis. The cards thank members for joining and staying in the Society and invite them to voice their concerns. Response has been favorable.

MOTION: Hotchner requested a motion to suspend the rules to allow the agenda to be taken out of order. Moved by Neil. Seconded by Walker. Passed unanimously.

Society Attorney's Report:

Flood:  Since the last Board meeting, the Society Attorney's Office has been instrumental in the following areas:

1. Preparation of Washington 2006 Agreement.

2. Review of various documents and materials relating to the Oregon member's gift.

3. Supervision of Ivy Suit which was dismissed by the Federal District Court.

4. Consultation and advice to Complaint Manager.

5. Conferences and advice to the Executive Director.

6. Society Attorney has rendered various opinions to the Board of Vice Presidents, Board of Directors, and Executive Director relating to general Society business, agreements, complaints of members, expulsions, appeals and matters of a similar nature.

The reason the Oregon member's gift was noted is because it is an unusual gift involving annuities that the Society is to own and then reap the benefits later. It is an unusual way to give a gift but does reflect more benefit monetarily.

Neil asked for details of the Ivy suit.

Flood: It concerned a gentleman in Arkansas who was charged with assault and battery. Unfortunately our office picked up that he was charged with a felony instead of a misdemeanor and brought suit against the Society in Federal Court. Fortunately we had changed the bylaw that requires all suits be brought to court in Center County in Pennsylvania according to Pennsylvania law. Mr. Ivy was most cooperative with the judge and stated he had not read the bylaws and that the suit should have been filed in Center County. Our insurance company paid.

Executive Director's Report:

Lamb: The health of the Society continues to be good. At the Houston meeting our membership was slightly higher on January 1 than it was the year before. Although the growth was small it was a positive sign. On March 31 we purged our membership of people who have not paid dues from the previous year. This year our membership dropped 396 below what it was last year. While that is a relatively small percentage it will mean we have to work harder to have the membership in positive numbers for 1998. The membership picture is further clouded in that we are bucking a trend. Every year after an international exhibition we tend to acquire fewer members than we did the year before. We will be very lucky if we are able to show growth this year. Nevertheless we have campaigns and promotions planned and some are underway.

The Society is financially healthy. Our Treasurer has overseen our assets ably. This Board is being asked to approve the largest budget in the Society's history. For the last three years our budget has been in the black even though we generally project a deficit at this time of the year.

We received several substantial gifts. Horace Harrison gave the Library a charitable remaindered trust for $91,000 and several weeks ago added another $75,000 to that. Harrison has been very generous to the Library over the years. Flood mentioned a member in Oregon who donated a life insurance policy. We do not have the member's permission to publicize this yet. On Friday evening we will receive a check for $100,000 from Tim and Robin Devaney from the estate of Leo August. The August brothers have been important benefactors to the Society. We've also gotten some very nice stamp collections donated to the Society. Last month we received one from John Wybenga of Alexandria, Virginia that belonged to his mother, Maria Wybenga. We intend to use this to promote stamp collecting to young people. Probably the most interesting gift we have received was donated to us by the Tonga & Tin Can Mail Study Circle. It is an original tin can used in the mail service. It has been really popular with visitors and there will be a spread about it in the magazine in October. It is a wonderful thing to see when you come to the Society.

Last year at STAMPSHOW the Board voted to change insurance plans. We have experienced some rocky spots in the course of the conversion, but from the Society's point of view these have been dealt with in turn. At this time we have about 5,000 members and the plan continues to grow at a regular pace. The insurance income projected in this budget is $75,000. It is the same amount put into the budget last year. We welcome this as a revenue source and it is a very important part of our strategy to increase non-dues income sources. This has been very successful.

Neil inquired if the Insurance Committee was going to report on the progress of the Insurance Plan.

Hotchner indicated that once there was something to evaluate the Committee would produce a report.

Neil asked if we would get a report from Wood on the income. Do we just trust him to pay the percentage he owes?

Lamb: No, we get a monthly report. That is one of the good things about this plan is that we receive a monthly report.

Neil asked if the Board could see the report.

Lamb: We hadn't planned to distribute this to the Board.

Neil indicated he did not want to see the report himself, but there were figures Neil questioned. The Board should see these figures, but Neil did not want to see the figures. Neil stated that it was promised to the Board that 100% of the insureds would transfer to the new program. If these are facts the Board should see them.

Hotchner agreed the Board should see a status report on where we are with the change over to the new insurance program and the statistics that underlie that with one or two exceptions.

Adams noted that 5,000 people were covered in the new plan and asked how many were covered under the old plan.

Lamb: We were never quite sure because we did not get those reports but the last payment we received was for just under 14,000 insureds under the old plan.

Apfelbaum: What level of reporting do we have necessity to come to us? As things stand now we don't receive a list of those who participate in the Sales Circuits.

Neil: This was written about so extensively that the Board should be privy to every step of this process so that this board can answer adequately any question that is raised now or in the future.

Apfelbaum: The 5,000 insureds we have already were within Apfelbaum's expectations. Getting a third within a year is pretty impressive.

Klug: Lamb reported we had 396 members fewer after the March cutoff. How many of these non-renewals can we attribute to the insurance changeover?

Lamb: It's hard to tell. There are many factors for non-renewal. We checked to see what percentage of these people had insurance compared with the number who dropped last year. Last year we had 226 fewer than the year before when we did the March purge. What we are seeing is more volatility in our membership than we have had before. It is not statistically great, but we are seeing a lower percentage of renewals.

Apfelbaum: It is not statistically significant.

Lamb: It is less than a half a percent, which is not statistically significant. It is only significant when looking at long-term trends in the Society. There are a number of factors in this. One is a decreasing participation in all philatelic activities. Linn's has dropped below 63,000 in its subscriptions. We've taken some hits from the press coverage. We knew from the beginning that a small number of people belonged to the Society only for the insurance it provided. We predicted the best estimate we could make at the time, that perhaps 100 members out of 56,000 would not renew because we had changed insurance plans.

Hotchner asked how many people have written in to voice their dissatisfaction?

Lamb answered about a dozen.

Apfelbaum was prepared to accept a drop of 3,000 members because of the insurance changeover, so if the number is 100 or 300, we can project that over five years to figure out how many we will lose because of the plan.

Lamb said it is not a large number. Other factors contribute to the loss of the members.

Klug asserted the loss may not be a statistically significant number but it is a very significant number when you try to recruit 100 or 200 new members. It is tough to do. Once you've lost somebody it is difficult to get them back again.

Lamb: That's true, but we recruit 3,000 - 4,000 each year.

Apfelbaum: As Tom Alexander said last year, if the reason members belong to the Society is for the insurance program that's okay, but we really need to think we offer people more than just the insurance program.

Hotchner: Asked Lamb to put together a written report on the subject which will be distributed to the Board. There has to be some indication in that report what contractually we can share with other people and what can only be characterized.

Walker asked to be placed officially on record as not wishing to receive a copy of this report.

Neil: While on the subject of insurance, Neil wished to know if there would be a time when the Society would drop the disclaimer from the Collectibles Insurance Agency (CIA) advertisement that states the plan is not endorsed by the APS.

Apfelbaum asked for clarification.

Lamb said there is a statement in the CIA advertisement in American Philatelist that this is not the APS endorsed plan. That was done because there was in the beginning and still is a lot of confusion about the insurance plan. Part of the confusion is because some of the literature that goes out from the CIA plan still says APS Insurance Plan on it.

Neil asked if the disclaimer was going to be permanent feature that Lamb, as Executive Director, wants in there? Is this a matter of policy by the Board? It is not legitimate to impose a specific line the publication itself puts in someone's ad. Is it on the rate card?

Hotchner said Neil had gone from a legitimate question to defending an advertisement and stated this was not Neil's place to do so.

Neil stated he was defending the ad from the standpoint of the position of the Society that it is something that is not rightfully done.

Flood: The Society has the right to place rules and regulations on the use of American Philatelist. Neil should discuss his concerns with the Board in Executive Session and be careful of pushing his client's interest at this point.

Hotchner: The issue has been raised and that is enough at the moment.

Youngblood:  Technically these things don't have to be on the rate card. Since it is the APS and the APS endorses one plan, the APS doesn't even have to accept the advertising. The APS can accept or reject advertising for whatever reason and doesn't even have to speak to the advertiser about it.

Apfelbaum: Suggested the Society should not accept the advertisements at all. If someone tries to market a service directly opposed to the service you are trying to market it is crazy to take the competitor's ads. A for profit publication would not do this.

de Vries:  There is no requirement by any print media except possibly government-owned print media to accept advertising. It is only broadcast media that has to present opposing viewpoints. If CIA is indeed sending out literature that states it is the APS endorsed plan then de Vries supports the continuing of the disclaimer.

Hotchner said in the the literature CIA says it was the former APS plan.

de Vries: If it says "former" then after a year the disclaimer should be dropped.

Lamb: The forms actually say APS Insurance Plan and are signed by a young lady as the APS Plan Manager. CIA is saying that this is a copyrighted name and they have the right to use it.

de Vries: That's another issue besides the advertising. It has been a year and most people who care about the insurance plan have gotten the message. It is important for the Wood advertisement to stress it is the APS endorsed plan.

Hotchner asked Lamb to reevaluate the advertisements and advise the Board what he intends to do.

Lamb: There were 84 participants in Summer Seminar this year, a record number. We were especially pleased for the turnout for the First Day Cover course. That was filled.

The book publishing has been revived. We have sold enough of Spurious Stamps that any further sales are all profit. We have covered our costs. We do not intend to reprint the book when it is sold out. We did a quick book on Earliest Known Usages that we are selling for $4 to members and $5 to non-members. It contains all the earliest known usages for the first 500 U.S. stamps. It was offered not as a money maker but as a service to members.

The Expertizing Service is running slightly behind last year, but we are still looking at the second best year in history. We found that about 20% of the stamps we get in are either altered or faked so this means that we are providing a valuable service to protect the collector against fraudulent stamps.

Welch will talk about the American Philatelist in depth, but advertising revenue will surpass any previous year.

The Sales Division inventories have exceeded $13 million and the annual sales are running about $2.6 million. The Sales Division people deserve a lot of credit for the added workload with less staff than they have had before.

We have restructured the Specialty Sales Department. We have gotten rid of the expensive inventory items. We found we had a wide range of specialty items and the inventory ate us up. We are mostly doing consignment sales and have reduced our inventory significantly. The program has increased in profitability.

On the question of Specialty Sales, President Hotchner has looked at ways we can serve all collectors. As part of this program we have tried to offer philatelic products that were not otherwise available. As you all know we have had both the watermark fluid and preservation liquid that protects covers from acid deterioration tested. The results are not back yet. We are discussing commercial arrangements that are very different for the Society. The test results will be in between now and Orlando. In fact, they should be in very soon. We will have to make decisions soon what relationship we will have with the manufacturer. We have several options. One is that if the tests are unsatisfactory we will have no relationship with the manufacture. If the tests are satisfactory, we can either endorse the product and others will go about the business of selling it; or we can use the APS logo as a sort of Good Housekeeping seal to say we have tested the products and we would endorse it. We would then be entitled to a percentage of sales -- a royalty. The amount of the royalty would not be great. There are some advantages and disadvantages. Lamb asked the Board to empower Flood, Hotchner, and Lamb to make the decision on how to best proceed.

Hotchner: This is so important that this does need to go to a vote. Hotchner asked Lamb to send a brief to the Board before asking for a phone vote.

Lamb indicated he was cooling to the idea of a "Good Housekeeping" seal and the royalty. The royalty won't be big money to us and there are some liabilities that come with it. What we are trying to do is a service to the hobby and not a money-maker to the Society and we should present it that way.

Apfelbaum inquired how the hinges were coming.

Lamb: We haven't pressed the hinges issue because the company we have been dealing with is much bigger, more bureaucratic, and we have not been able to establish the kind of relationship we have with this small company in Pittsburgh producing the watermark fluid. We continue to have discussions with them. The company says it can make hinges and has the materials to do so in stock, but that the stamp collecting market is too small and they want us to do other things in conjunction with producing hinges such as promoting their other products. That would be much more complicated issue. I hope I hope we can discuss this further in Orlando.

Youngblood: We should decide before we even get into any discussion if we should endorse a product. The Board may decide that is not appropriate.

Triggle: Wanted to see the report from the Salm Foundation on the watermark fluid rather than a synopsis.

Flood: One of the provisions in the agreement to the watermark company was that they carry product liability insurance with us shown as an additional insured to protect ourselves in the future from liability.

de Vries asked if the company was planning to sell the product themselves or were they developing it on the Society's behalf for us to produce or find someone to produce.

Lamb: This is a manufacturing firm who will produce it and wholesale it. They don't want to get into retail sales and we don't want to get into retail sales because we aren't set up for it. We'd like to get a few cases so we can respond to inquiries from members. They can promote it better than we can. If we endorse the product we would get a royalty from anything a dealer would sell. Nobody knows the size of this market. If we went to a royalty it would be a sliding scale. The first $25,000 of sales there would be no royalty.

Apfelbaum: The main impetus was to provide a service. It is a desire on the part of the Board to make people's collecting easier and better. That was the main goal, to develop safe, affordable products and getting them on the market.

Klug: When we first began discussing this issue it was with the idea that we would be developing products that were unique to the hobby. A peelable hinge is unique to the hobby because there are no peelable hinges on the market today. The preservation spray is a unique product for philately. Watermark fluid is not unique. There are a number of fluids available to collectors. What makes this fluid different from the others?

Lamb: The fluids that are out there are either environmentally unfriendly or carcinogenic. It is unhealthy for people to use them.

Klug inquired if this was a safe fluid.

Lamb responded that it was. It was better at watermarking because the effective time could be modulated and a collector could see the design of the watermark for a longer period of time.

McCann: Felt it was important for the Board to see a full report from the Salm Foundation on the tests of both the watermark fluid and the preservation spray.

Lamb said the watermark spray would be demonstrated at the Luff Luncheon and that the Board could have a demonstration as well.

Flood had used the product and it works great. It is so safe that a collector could drink it if he wanted to.

Hotchner: Triggle and McCann are scientists and would like to see the report. Any other Board member who would like to see the report should be able to. Hotchner also wanted a snyopsis of the entire issue done and given to the Board prior to the voting on the subject.

de Vries asked what the difference was between endorsing and the seal of approval.

Lamb: If it is a good product that we don't have any financial interest in we can simply tell collectors it is a good product. It doesn't say APS anywhere on the label.

Hotchner: It involves what gets said in advertising and this issue is complicated enough that we have to leave this to people who can figure it out and send us their recommendations later.

Lamb: You won't get a report soon on this issue. It will take time to figure out the details. Also, the analysis of the data may take some time. We may have to have people help us analyze the results so that we know exactly what we have.

Youngblood wanted to know whether we wished to endorse a product or not. We should decide that independently of whatever reports are forthcoming. There are a number of competing products on the market. There are concerns about consistent quality control. There are all kinds of issues involved in deciding whether we should endorse a product.

Hotchner: That is why we need a cover sheet to the report to address these issues that are quite separate from the Salm report. Anyone who would like to contact Lamb and discuss these issues is encouraged to do so. We don't have enough information at this point about the specifics of the particular products to make that decision now.

Youngblood reiterated that it had nothing to do with specific products. We should decide if it will be our policy to endorse a product.

Apfelbaum: Youngblood's issue is more fundamental involving whether we want to work behind the scene to encourage development of a product.

Hotchner asked for a straw vote for those who were opposed to a "Good Housekeeping" seal of approval absent any further information we may get. Youngblood opposed the seal of approval concept. Adams, Apfelbaum, de Vries, Klug, McCann, Morison, Neil, Triggle, and Walker approved the concept. It was the sense of the board the seal of approval endorsement was acceptable.

Lamb: Jeanette Adams suggested we put the palmares for all World Series of Philately Shows on our website. Since this information did not previously exist electronically, we have asked all WSP shows to provide us this information in electronic form. Our first show, the National Topical Show, went on the site two weeks ago and others will go up as they become available.

McCann: We already get that information. We don't have to ask the shows to provide it to us.

Lamb: We have asked for it in electronic form. It is hoped this will add incentive to shows to provide this information to us on time and electronically.

de Vries: There is now a blank spot for the upcoming shows where those awards will be listed. It may be an incentive if a show's area stays blank too long after the show is over it will be obvious that someone has not provided the information required.

Lamb: The installation of our membership system has gone so smoothly that people on the outside were unaware of the effort that has gone on within the building. We had people working long hours to make sure we had a good mailing list for the mailing of the August American Philatelist. So far it has gone remarkably smoothly, but that is not to say there is no more work to be done. The real test will be in two months when the dues goes out.

Lamb indicated he had hoped to be able to give the final report on PACIFIC 97 and that we would never have to discuss it again. Unfortunately it will have to wait for at least one more Board meeting. PACIFIC 97 has been selling off their remaining assets, principally 600 A-frames. Jim Bowman said last week they were down to about 50 and they were selling quickly. They also have a few other assets with no particular value. The Board of PACIFIC 97 will meet Friday evening here at STAMPSHOW to decide how to deal with the last remaining assets. Lamb expected a report to be forthcoming.

Youngbood: We are approaching nearly a year and a half out from PACIFIC 97. Is the delay really asset driven?

Lamb: Yes, it is asset driven. At one point they talked about giving us these frames and disappearing. Lamb suggested they sell the frames and give us the money because we didn't want to get into the frame selling business at State College.

Hotchner: We are on record as to asking for a final report. I have requested this of Steve Schumann and have no reason to believe they will not produce a final report.

Triggle inquired if the remaining assets were Congress Books and how many of these did PACIFIC 97 still have.

Lamb: The large quantity of Congress Books is part of the problem. One dealer bought what he thought was the remainder of the Congress Books to sell himself. If more books are dumped on the market in addition it will becreate problems. That is one of the ticklish issues left to deal with.

Lois Evans de Violini: The Congress Books are really not part of the asset problem. The only assets we are trying to get rid of are the A-frames.

de Vries: As a non-profit California corporation aren't PACIFIC 97 Board meetings supposed to be open?

Lamb: Didn't know. You would have to raise that issue with PACIFIC 97.

Hotchner suggested de Vries check with Schumann or Bowman.

Evans de Violini: This really isn't an official meeting. It is a meeting with the lawyer to close things up.

Hotchner suggested de Vries inquire with Schumann or Bowman if the meeting was to be open.

Youngblood: We went on record asking for a timely report. These last remaining assets really don't affect overall the financial picture of PACIFIC 97 to any significant degree.

Hotchner: But they can't say in their report they are finished.

Apfelbaum: They can say where they are.

Evans de Violini: The problem is you can't close the corporation until the assets are settled.

Lamb: Since our last meeting we have nominated Bud Sellers to be president of the FIP with his consent, and we have nominated Charles Peterson to be a director of the FIP. We have sent letters signed by Hotchner to all of the federations asking for support and we have sent letters to all the commissioners and jurors slated to be at Milan soliciting their votes for Sellers and Peterson.

Hotchner: The letter asks for support for both of them but takes into account those members who find it unusual and unprecedented for one country to nominate two officers. The letter simply states that we would like support for both our candidates because we think they are both outstanding, but if the representative can only vote for one American we hope they will cast their vote for Sellers who is the senior person in the United States. Peterson was aware of this.

Triggle asked if the U.S. delegates would exercise our prerogative to vote for both.

Hotchner: Certainly.

Lamb: This is the 30th anniversary of the Library and we are planning a birthday party for the Library on Saturday, October 10. It should be fun day. We have invited the entire membership to come and bring a present for the Library. We have asked they let us know if they plan to attend so we have a cake that is big enough. Lamb hoped all the Board members would attend. You are all most welcome.

MOTION: To accept the Executive Director's report. Moved by Klug. Seconded by Morison. Passed unanimously.

MOTION: To accept the Society Attorney's report. Moved by Walker. Seconded by Neil. Passed unanimously.

Editor's Report  

Welch: We have a happy problem in that we are selling too much advertising. We are now in routine violation of this Board's edict of many years ago that we not have more than 40% advertising in American Philatelist. Either we turn the ads away, go up some pages, or change the policy.

Hotchner: What percentage are we at now?

Welch: We've been at 40%. Three months we have been at 42%, 43%, 46%. That's through October. In October we have 27 full page ads. Europeans are finding us and liking what they see.

Hotchner:  Asked that a proposal be brought to the next Board meeting with the assumption this growth in advertising will continue. We can exceed 40% for a little while and not violate the spirit of what the past Board was aiming at, but on a long term basis we need to deal with this.

de Vries:  At what point do we violate the U.S. Postal Service's regulations?

Welch: We have to get up to 80% advertising. It is not a problem. We have 101 manuscripts in hand. They come in the door as fast as advertising. Increasingly, they come to us as e-mail attachments. The last couple of months we have had articles come to us that way from Bulgaria, the U.K., South Africa, Bosnia.

Youngblood: Do the illustrations come as e-mail attachments as well?

Welch: In one case it has. We are routinely dealing with those sorts of things. (Welch distributed an information packet that is sent to authors in terms of writing the article and technical information.)

Ken Lawrence, after seven years as our U.S. stamps columnist, is stepping down so that he can devote more time to his blockbusters -- bigger and longer articles. Welch said he was looking for a new U.S. stamps columnist.

Triggle: Is it possible to limit the ads to a half page?

Welch: No, because people want to buy full page ads.

Apfelbaum: Our ads are set for a full page size. You just can't take an ad and shrink it.

Adams: Could we look into the pricing at the same time we look into the policy of the advertising percentage? Perhaps advertising in American Philatelist is too reasonable. Pricing is part of the issue.

Apfelbaum: Let's not look a gift horse in the mouth. Two or three years ago we couldn't get people to advertise. It is not too cheap compared to the other media. The European stamp market is very weak right now. They haven't completely gotten out of their recession. The European stamp dealers want to sell to the American market because our dollar is very strong.

Hotchner asked this issue be dealt with in Welch's report. We need to think about raising advertising rates. Welch may recommend not to do it but it should be covered in the report.

Welch: We typically raise display advertising rates every other year and classifieds every three years. We think it is a miracle that a monthly magazine has any classified ads at all. We try not to crank those up really high.

Starting in September we will have a new Internet columnist. Michael Mills will write a monthly column about visiting Internet sites and he does it in an interesting, sprightly, fun way. On the 7th of each month this column will be posted to our website.

MOTION: That the Editor's Report be accepted. Moved by McCann. Seconded by Youngblood. Passed unanimously.

Apfelbaum: Revenues for the American Philatelist are up 40% and direct expenses to the AP are up 20%. When this Board was asked two years ago to look at the issue of color in the AP the question existed whether it would pay or not. Lamb indicated we were looking for non - dues increases to grow our revenue and this is one way we have been able to do that. Anytime you have a monetary problem there are two ways to solve the problem. One is to cut expenses the other is to grow the revenue. The fact we have 27 full page ads is an extraordinarily good sign. The magazine is reaching people and it is pulling. Advertisers are the quickest people to vote with their feet.

Future Shows:  

Martin: On Americas 99 we have proceeded to send out invitations to the dealers several weeks ago. I really need direction from the Board or Committee or somebody with regard to the exhibits. We have had a provisional prospectus/ entry form out for six or eight months that said it was going to be an international show with FIAF patronage and FIP support. That is no longer the case. We need to advise all the entrants of the changes. Are we going to go ahead and judge on international basis even if it is only a national show? We originally envisioned a five frame minimum, eight frame maximum. Is this still the case? Do we allow single frame and display class? Do we allow any of the other classes? These are questions that need to be answered very rapidly with the show being only six months away. This also has financial ramifications as well, dependent upon how many jurors there are, on what type of awards that will be given at the show.

Hotchner: Jim Mazepa is the chairman of the show. Hotchner referred this to McCann, Mazepa, and Martin to work out the details and report back to the Board.

Martin requested approval from the Board to work out an agreement with Atlantic City to hold STAMPSHOW 2002 there. We have Orlando scheduled for February 1999, Cleveland August 1999, Portland February 2000, Providence August 2000, Tucson in February 2001, Chicago in August 2001. We probably should be in the West Coast in 2002. We are trying to do it in rotation: East, Midwest, West. We looked at sites on the West coast, specifically Los Angeles, but the site would be $20,000 more than the convention center in Atlantic City. Hotel rooms would also be significantly more expensive. Anaheim would be cheaper but there are already other events there: MegaShow and World Stamp Expo 2000. Obviously we are in the San Francisco area now. We'll be in Portland in February 2000. Seattle won't give us space and San Diego won't give us space because we won't block enough rooms. Denver won't give us space, either. That basically eliminates the West coast or a large part of it. We will continue to look at the West Coast for 2003. Seventy-five to 80% of the attendees at our shows come from within a 200 mile radius of the city. Atlantic City is by far the city with the largest population where there are no major shows currently being held. Martin had two concerns. The airport serving Atlantic City is not up to the level serving most other cities. They are under expansion but are only served by one major airline. Martin anticipates this will change by 2002. His other concern is there is no strong structure for a local committee in Atlantic City even though they had a national show 20 years or so ago. Assuming everything turns out, Martin was asking the Board permission to proceed with Atlantic City.

MOTION: That the Board give permission to Martin to proceed negotiations with Atlantic City for STAMPSHOW 2002. Moved by Neil. Seconded by Morison.

Adams: We had discussed earlier about scheduling STAMPSHOW to earlier dates in August if held in Atlantic City.

Martin: The only time we could schedule the show in Atlantic City would be August 12 - 19. The show dates would actually be August 15 - 18. This is a week or two earlier than the traditional weekend before Labor Day date. If we want Atlantic City we have to have those dates.

Adams has had a fair amount of correspondence supporting the idea of an earlier show.

Triggle asked if there was a local committee to assist in producing the show.

Martin: There are clubs there in the Atlantic City area. If you look at the local committee for this Santa Clara show, for example, they are over quite a range of miles and quite a few different clubs. It's different from our national shows that traditionally use only one local club for its committee.

Apfelbaum: It is only 50 miles from Philadelphia.

Martin is looking at the possibility of drawing the local committee from a number of people from different clubs. Some may be 20 or 30 or 50 miles away.

Youngblood: Jeanette Adam's correspondence not withstanding, do we know if there is a collector base who would show up on earlier dates?

Martin: No. A lot of people are on vacation the week before Labor Day, depending on when the school season starts for them. It starts at different times in different parts of the country.

Apfelbaum: A lot of people would go to Atlantic City for vacation and go to the show.

de Vries: The American First Day Cover Society just had Americover in Somerset, New Jersey which doesn't even have the drawing cards Atlantic City has. It's about an hour from Atlantic City, but it still did very well from that New York Metro area and from Philadelphia. Wouldn't the Philadelphia airport be roughly equivalent to the San Francisco airport for this show?

Apfelbaum: No, its further. It's on the other side of Philadelphia.

Hotchner called the question of whether to approve Atlantic City for STAMPSHOW 2002. Passed unanimously.

Martin: Looking ahead to February 2003 is not easy finding sites. Charlotte is reserved for February 2002 but another group that is using other space has taken virtually every hotel room within 5 or 10 miles. Charlotte has offered us space on an alternate date, but that alternate date is the same time as St. Louis Stamp Expo. Martin was unwilling to go against another WSP show. Charlotte is an excellent location, and Martin is trying to get them to find an alternate date that does not conflict with another WSP show. There is nothing definite about that. For February 2003, Martin has been talking with Memphis and Nashville, but neither has been able to come us with space for 2003. We had originally accepted Memphis for 2001 before the Nordia show came about in Tucson. Neither Memphis nor Nashville are available for 2003. Charlotte is a possibility for 2003. Martin has a proposal from Lexington, Kentucky for February 2002. It is a reasonable proposal, but it is not the cheapest. If you look at the population within a hundred or two hundred miles it is actually higher than many other cities. There is about 3-1/2 million. For Atlantic City it is about 25 million, but there are only about 10 convention centers with a 10 million population within a radius like that. Houston is only about 2-1/2 million within a similar range, so it is not that different. There are other possibilities such as Mobile, Alabama which the Board turned down in favor of Portland. Mobile would love to have us come but they have even less population than Lexington. They do have a more attractive location for February right on the Gulf coast. Atlanta has been thought about but there is some sentiment locally that they don't want us to come. Birmingham's local committee also does not want us to come. Virginia Beach and Atlanta are both very close to Charlotte. We can have space large enough for a February show in San Diego but Martin can't get a first option on any space so there is no guarantee.

Adams suggested Martin check Louisville and Las Vegas.

Martin has asked for proposals from Las Vegas but they were unwilling to discuss this because we can't guarantee enough room nights. Louisville could not accommodate us for 2003, although Louisville has a new convention center. Covington, Kentucky in the Cincinnati area does not have large enough convention facilities.

Walker: The local group in New Orleans would be interested in having us.

Martin: New Orleans would love to have us but for a February date they want $1.50 per square foot. In Houston we paid 70c. It is too expensive. Also, if you look at the population you would have greater population in central Kentucky than you would in New Orleans.

Lamb: That is one reason why we are looking at Biloxi and Mobile so that we could reach that New Orleans area without paying the high price.

Youngblood: Why was Mobile not selected? Was there a concern the local committee could not handle the show?

Martin: The local club would love us to come to Mobile. Martin had a little concern about the local committee, but they are enthusiastic and willing to try. It was the concern of the Board when it was presented to them two years ago that the population density was not there.

Triggle asked that Niagara Falls be considered. There is a high population density with Toronto / Hamilton corridor plus you have Detroit coming over.

Hotchner: It would be really risky to hold the February show in Niagara Falls. On any given weekend we could get killed by a snow storm.

Triggle: If we can't consider it for the Winter Show perhaps it could be considered for STAMPSHOW.

Hotchner: This will be referred to Martin for consideration.

de Vries: We've been talking about the vicinity's population density. One of the reasons for the warm locale for the February show was to attract people there for a winter vacation. In this case, New Orleans is still more attractive than Biloxi or Lexington, Kentucky. More people would come from outside the area.

Hotchner called a ten minute break. The Session resumed at 9:45 p.m.

Committee Reports

American First Day Cover Society Discussions:

Hotchner: Ken Lawrence has deputized Gordon Morison to report on the discussions we have been having with the American First Day Cover Society regarding bringing their annual show AMERICOVER into the World Series of Philately group of shows.

Morison: The American First Day Cover Society (AFDCS) sent a letter to APS President John Hotchner setting forth what their Board would like to have approved as an agreement with the APS in order to become a WSP show. That agreement was enacted at the AMERICOVER show in New Jersey. There were really four things of significance in that letter. It stated that Doug Kelsey, Executive Director of the AFDCS, would be available to discuss the agreement but that he was not empowered to make any changes in the agreement. The issues were primarily of intent. The Board was advised it would follow the structure of the agreement the APS had with the American Topical Association with regard to their show. Morison believed that the intent of enlarging their show to more than 100-115 frames was not part plans of the AFDCS. They are also hung up on the number of judges they are required to have. The five that we normally have they would like to restrict to three. The AFDCS argues the judges are only concerned with one aspect of the judging manual when judging their show, therefore they don't need five judges. Obviously, with only 100 frames, which is where they are now, they may not need five judges. Two other issues that are part of the agreement have nothing to do with the show itself. One was the exchange of advertising between American Philatelist and First Days. Each would carry free advertising for the other society, about 56,000 circulation against 3,000 circulation. The second issue was the AFDCS wants to have a booth at STAMPSHOW where it can sell its own first day covers. Morison believed this issue had been resolved and does not know how that relates to AMERICOVER becoming a WSP show. Ken Lawrence has requested the committee working on this agreement be abolished. Morison asked that the agreement be sent to the Executive Director and the Accreditation Committee for further revisions and implementation. Kelsey is here and this should be discussed. Morison would like to see more intent in the letter, that the AFDCS will move their show up to the WSP requirements even if it takes 10 years.

Triggle asked if the AFDCS was reluctant to do this. Is the APS forcing them into bringing their show to WSP standards?

Morison: The AFDCS considers AMERICOVER to be a big show. They have 50 dealers. They also have a Moonlight Bourse of their cachet makers. They have excellent attendance. They want to keep their show in a hotel. They do not want to be driven into the problem Ken Martin has where they have to go to a convention center where it will cost more money and they can't get the space. They are reluctant to add more frames because it may mean a reduction to the number of dealers they can have. The AFDCS benefits from the revenue generated by their show. They don't want to cut back on the revenue.

Triggle: Are we courting them or are they courting us?

Hotchner: We are talking about a non-unified "they". There are factions in AFDCS that want this very badly. There are other people who are not so sure. They are doing a fair amount of talking among themselves. What we have in this proposed document reflects neither side entirely but is an amalgam of what each side would like. This ought to go to the Accreditation Committee for a thorough review of the draft and for whatever comments they wish to provide. Hotchner invited the Board to convey comments to Peter McCann who chairs that committee. AFDCS is looking for us to act at this meeting, but Hotchner did not think we could because of the issues Morison raised, and possibly other issues. This will go to the Committee for further discussion at the Orlando Board Meeting.

Morison: It is very important that we recognize what is in the agreement and what will be. Anything unsaid in the agreement will not take place. If we want AFDCS to get up to a certain number of frames, if it isn't in the agreement as an ultimate goal it will never happen.

McCann: One of the things to take into account is that Hotchner set up a committee composed of Gordon & Mary Morison, McCann, and Ken Lawrence to act as a liaison to look into the possibility to see if the AFDCS was interested in having its show as part of the WSP. The whole idea of this committee was to talk with various people to see if the AFDCS was interested in this possibility. As part of that process they solicited opinions from McCann, Morison, and Lawrence as to what sorts of things based on the current status of the rules for WSP shows the APS would be willing to compromise and implement over a period of time. What happened was they then took our written personal opinions and put it into the proposal. It was McCann's opinion that it is premature for our personal opinions to come back as a formal document for this Board to vote to approve or disapprove. Within the APS structure clearly the Accreditation Committee is the determining committee for recommending what shows should be WSP shows. What Hotchner is suggesting is entirely appropriate and not delaying, but simply is part of the normal process that the Accreditation Committee should look at this and will do it as quickly and timely as possible. We are very interested and want to encourage First Day Cover collecting. McCann credited Ken Lawrence with trying to bring FDC collecting into a larger body of collectors and exhibitors in this country.

Youngblood: The AFDCS seems to have internal division on this issue and they are probably not ready yet anyway.

Society on the Internet

Neil distributed a report and indicated it was food for the Board's thought prior to the Orlando Board meeting. Neil has a timeline and suggested that President Hotchner appoint a committee composed of Hotchner, Lamb, Sente, and Klug to look into this draft proposal and to come up between now and Orlando with an idea of how much the proposal would cost, how it would be implemented, and a timeline for it. In essence the report offers the art of the possible in terms of what the Society can and should be doing with the Internet as a viable commercial and promotional medium for the Society and a very viable method for increasing the Society's revenue in a number of ways. Not everything that will be possible to do is in the report because the Internet and electronic media is moving so fast that there will be things six months from now that will be thought of between now and then. In any case, those who are paying attention to this medium will know it offers great potential into the 21st century because it will represent a huge portion of our nation's and the world's commerce in time. It is a terrific tool for a non-profit corporation. If you have any questions or comments please see any of the committee members. Neil also had suggested the Board consider specific proposals and any revisions the Board cares to make at Orlando and that we pass it at Orlando so we can move ahead with advancing and developing our web presence.

Youngblood: This is an important area for us to get into but the main point seems to be a revenue generating engine. Youngblood didn't see much that was a realistic revenue generator.

Neil: There is a terrific amount of revenue generating power we haven't even begun to explore. The Sales Division alone can move into the Internet in a massive way. Talk to the people at eBay who are here on the floor of our show and find out what commerce in the hobby markets is doing on the Internet. I'm not just talking about selling neckties and souvenirs and books. I'm talking about all sorts of powerful things we can be selling on the Internet and using our web presence as an advertising medium for the hobby and a gateway to philately on the Internet. There are terrific methods for making a web presence for a non-profit organizations such as ours a huge money-maker, from donations to the Tiffany Fund to the expansion of the library.

Hotchner appointed the Committee Neil suggested, with Klug as chair. Comments should go to Klug.

de Vries questioned the use of shopping cart technology mentioned in the proposal and asked if this referred to the sales of ties, buttons, and pins. How much mail order business exists on this?

Scott Frazier: About 50% of our specialty sales are mail order at present. In 1998 $45,000 was our total volume, so it would be about half that for mail sales.

de Vries: Does this mean the APS is now set up for this type of sales?

Lamb: The present structure would not take a big increase, but that is part of what we will have to look at.

de Vries: In the third paragraph Neil states that other philatelic sites are attracting as many hits as the APS site has in total on a monthly basis. Does this refer to the auction sites?

Neil: Yes.

de Vries: Those are different from what we are discussing for the APS site. Those are commercial sites.

Triggle: The focus seems to be more on marketing to get new members or marketing our society in general. One of the charges the Committee had was to look at possibilities of allowing chapters, affiliates, and committees access to the Internet through the APS website. This seems to have rather a small focus.

Apfelbaum: What is Philatelia's Quest?

Neil: That is a special website that is an idea of Frank Sente's. It would create an interactive gaming place to attract kids.

Klug said she had discussed with Neil prior to the release of the report his proposal for an on-line magazine. Klug suggested we already had a print media magazine and thought the effort would be better placed with an on-line newsletter to disseminate some of our press releases and things that are happening within the Society in a more efficient way.

Hotchner: This will be part of Klug's task as Chairman of the implementation committee. The committee will take the theory presented in Neil's report and make it practical. Nothing in the report is presently etched in stone. These are recommendations. Clearly we will not be able to afford to do all these things; especially right away. We need to prioritize what is most important to us.

Additional Committee Reports:  

Triggle presented a report from the Awards Committee. The Awards Chairman asked the Board to consider three choices to have for an award that we as an FIP member would send to various FIP shows. The award we have been sending is decreasing in numbers. We need to put a new one forward. The Awards Committee is suggesting Remington bronzes. Triggle passed around a catalog illustrating the bronzes and asked for time on the agenda to put forth a formal proposal after everyone had seen the bronzes.

Hotchner indicated he would be submitting a letter to the Board from Francesca Rapkin of London 2000 requesting the APS provide an award for that show.

Old Business

Phone Votes:

Lamb: We had three phone votes. The first was on approval of the Minutes from the Houston Board meeting which extended through three weeks in March In the end Lamb believed everyone voted in favor of the Minutes.

Hotchner asked Klug if the votes in favor of the Minutes was unanimous.

Klug replied she did not take the phone votes and did not know how the voting ended up.

MOTION: To approve the Minutes from the Houston Board Meeting. Moved by Apfelbaum. Seconded by Neil. Passed unanimously.

Lamb: There were two votes on April 17. The first was for the authorization to purchase frames from PACIFIC 97. There were two votes against, the remainder voted in favor.

Klug asked that the votes be identified by name.

Lamb replied that de Vries and Klug voted against the purchase of PACIFIC 97 frames, and Adams, Apfelbaum, McCann, Morison, Neil, Triggle, Walker, and Youngblood voted in favor.

MOTION: To approve the phone vote for the purchase of PACIFIC 97 frames. Moved by Apfelbaum. Seconded by Youngblood. Passed unanimously.

Lamb: Also on April 17 there was a phone vote to authorize spending up to $10,000 to test watermark fluid and preservation fluid. That was a contingency in case it cost that much. The vote was unanimous in favor. As it turned out the total cost was $5,500 and the Salm Foundation is prepared to pay us $5,500 to allow them to publish the test results. So the test will effectively not cost us anything.

MOTION: To approve the phone vote that authorized spending up to $10,000 for testing. Moved by Youngblood. Seconded by Adams. Passed unanimously.

By-Laws Amendments

Hotchner asked Attorney David Flood to address the issue that was raised at the last Board meeting on whether we can modify what the prior Board decided with regard to their term limits amendment.

Flood concluded that this Board can take whatever action it desires to change the previous Board's actions. One of the things buttressing my opinion is that requirements of Article 13 of the Bylaws governing time limits advertising the amendment to the membership was not followed.

Apfelbaum asked for clarification of this ruling.

Flood: The question was put to Flood as to whether the current Board could change the action taken by the previous Board relating to bylaws and the election of Directors. Flood concluded that yes, the Board could change the action according to the bylaws because proper procedure had not been implemented by the previous Board.

Apfelbaum: The previous Board's actions has no bearing on us whatsoever, as if it hadn't happened.

Flood concurred.

Hotchner suggested it ought not be treated that way. The previous Board deliberated in good faith and made recommendations in good faith and while there are questions we may have about whether they are good recommendations from this Board we need to treat them with respect.

Klug agreed and said it would be ethically improper for us not to send it to the membership for a vote as the previous Board had intended.

Hotchner concurred and stated that this board could also offer alternatives and make sure both cases were made fully and fairly so that the membership could chose.

Apfelbaum: If the previous board recommended a bylaw amendment which our Counsel has said is null and void why should we put it to a membership vote?

McCann: We as a board voted on it and approved it. It just didn't get on the ballot.

Motion: That this Board accept the term limits bylaws proposal passed by the previous Board to present it to the membership as written as soon as possible, in addition to the current Board's alternative proposal. Moved by Klug. Seconded by Triggle.

Lamb: In draft bylaw number 3 we are now asking the election close at 12:00 noon sixty days prior to the opening of the annual meeting. The purpose is to shorten the election process by 25 days. If we change 60 days to either 56 or 63 days it will be a multiple of seven, which would mean the election would close at noon on a Saturday. It is more convenient to us to have the election close on Saturday and have the election committee come in on Saturday. Otherwise it would be moving around during the week. I would propose 63 days.

Hotchner: It is within the spirit of the bylaws proposal and Hotchner did not sense any objection to that proposal.

McCann: The previous Board passed this resolution by two-thirds majority and it would sit very poorly with the membership if this Board discarded it on a technicality even though Flood says we could.

Apfelbaum didn't like to have to resort to technicalities, but felt it originally was wrongly argued and wrongly decided . Most of the people who were on that Board who are now on this Board agree with that in retrospect. If we made a mistake before there is no reason for us to compound it by continuing it.

Morison asked for clarification on what the technical problem was. Morison understood that it was null and void because the Board never did it. We never put it to a vote. That doesn't mean we didn't do it, it just means that we didn't do a membership vote on it.

Hotchner: Asked for a straw vote as to whether we agree that the prior board's recommendations should be presented to the membership. Agreeing were: Triggle, Morison, McCann, Klug, Adams, de Vries, Neil, Walker. Hotchner then said that the previous Board's bylaws amendment would stay on as part of the motion made by Klug.

Youngblood: In offering this proposal as well as an alternative proposal, would it not then be appropriate to offer a third option, that the bylaws remain as they are now without term limits.

Hotchner asked Flood if we could offer this as a third option.

Flood: Said we could offer this if we wanted.

Klug amended the motion: That this Board accept the term limits bylaws proposal passed by the previous Board to present it to the membership as written as soon as possible, in addition to the current Board's alternative proposal and a third option, that there be no change in the present bylaws with regard to term limits. Triggle seconded.

Apfelbaum: We have to make sure it is adequately explained to the members.

Hotchner: That will be done. Given Apfelbaum's views, Hotchner suggested he might be the person to write an argument in favor of option 2 or 3.

Apfelbaum stated if he was never on the Board again there are plenty of things he could spend his time doing. Apfelbaum was concerned we'd end up in a situation where ultimately we would have Board members who knew nothing about what they were doing because none of them have been around long enough to know anything. Apfelbaum said he had been on the Board two separate times and that for the first two or three years you really don't know what is going on as much as you might think you do. It would be pathetic if we got into a situation where we had Board members like that.

Youngblood: There is probably nobody on the Board who opposes term limits but with option 1 that limits for life we are setting ourselves up for failure.

Lamb: The staff kicked this around a lot at State College and concluded there should be some sort of term limits. We are also attracting younger and younger people to the Board and it seems unfair to ban them forever after two terms.

Apfelbaum: Offering all three options with explanations for the membership is a good way of proceeding.

Klug: When is this going to be done? It has already been delayed many times. Klug admitted that having a ballot bound into American Philatelist is expensive, but could we not have a ballot very soon on the outer mailer?

Lamb: It is sufficiently complicated that it should be part of the regular ballot. If the Board feels strongly, it has the power to put it into effect for the next six months or for the next election administratively and let the membership decide after that. Spending $10,000 for a special election is expensive.

Klug: There are too many options to do this administratively, and Klug was opposed to spending $10,000 for a special election, but suggested if a ballot was printed on the outer mailer it wouldn't cost anything.

Flood: Section 13.3 of the bylaws outlines when elections may be conducted.

Apfelbaum: That means there is a certain date when it must be done.

Flood: That is correct.

Hotchner: Does that allow us to do it with the next regular election?

Flood: Yes. But remember you will have to be very careful how you draft these options because you are likely to confuse the membership. Be very careful of that.

Morison: With regard to option 2 that says a Board member may serve two terms in one office, two in another, and then must sit out for 16 years before returning to office, it shouldn't be 16 years. If we want to do this thing, it should be to sit out for 4 years. That would be more reasonable.

Apfelbaum: Would you feel more comfortable with 12 years?

Morison: Yes. But I would rather not say 12, I would rather say someone would have to be off the Board for 4 years.

Apfelbaum did not believe there was anything wrong with the current bylaws where the members have the right to vote people out of office if they don't want them to be elected any longer and that people can only be in any elective office for two terms. Maybe what we want instead of three choices is two and come at it in a very strong way and have a process that is exclusive or one that is not.

Hotchner asked for a straw vote: Should we have some form of term limits? In favor: Youngblood, Triggle, Klug, de Vries, Morison. Those in favor of no term limits: Neil, Adams, Walker, Apfelbaum. Abstained: McCann. That is not the requisite two-thirds majority.

Apfelbaum: We don't need a two-thirds majority. This was just a straw vote to see how the board feels about term limits. A simple majority will do.

Hotchner was uncomfortable with that.

Apfelbaum and McCann changed their votes just to get term limits on the ballot.

Adams: Since we are all coming from different directions could some of the Board members who feel different ways talk about this and come back with a specific proposal.

Hotchner: Asked that option 2 be considered by a panel consisting of Apfelbaum, Adams, McCann, and Youngblood to get together before the second Board meeting session and come up with a specific proposal.

With regard to the bylaws proposal for Closing, Canvass, and Election we can change to 63 days if no one has any serious problem with that.

It was the sense of the Board that this be supported.

Affiliate Applications  

Hotchner asked for a proposal that the Tanna Tuva Collectors Society, the German Colonies Collectors Group, and the Fakes & Forgeries Study Group be accepted as affiliates of the American Philatelic Society.

MOTION: Moved by Youngblood. Seconded by Neil. Passed unanimously.

End of First Session  

De Vries moved to adjourn. Seconded by Walker. Passed unanimously. Meeting adjourned at 11:05 p.m.

Continue to Second Session