7. Promissory notes secured by United States bonds or obligations issued after April 24, 1917 or secured by the pledge of a promissory note which itself is secured by the pledge of such bonds or obligations. Such bonds must have a par value of not less than the amount of such notes to exempt the latter.
Cancellation of Stamps
Any person using or affixing stamps must so deface the same as to render them unfit for further use by writing or stamping his initials and the date thereon with ink, or by cutting and canceling such stamp with a machine or punch, which will affix the initials and date. The cancellation should not so deface the stamp as to prevent its denomination and genuineness from being readily determined.
In addition to the above, stamps of the value of 10 cents or more must have three parallel incisions made by some sharp instrument lengthwise through the stamp after the same has been attached to the document, except where the stamps are cancelled by perforation.
Use of Cancelled Stamps—Refunds
A stamp affixed to an instrument and cancelled cannot lawfully be removed and attached to another instrument. Refund will be made by the collector of internal revenue for amounts paid for stamps used in excess of requirements, or on instruments not actually effective and for which a substitute is prepared and stamped, or on instruments not subject to tax.
[1] Based on Treasury Regulations No. 55.