There is evidence to suggest that many were manufactured, but were not actually purchased for normal use. As described in an article on the use of American flags in popular fashion:
The modern debate over the ‘correct’ use of the flag in clothing
started in the 1960s. One incident concerning flags and clothing
occurred be- cause of the admission of Alaska and Hawaii into the
Union, rendering 48- and 49-star flags obsolete. Instead of disposing
of the old flags in the correct way, by burning, many of these flags
were bundled up and sold to other countries, to be used in clothing or
as rags. One resourceful manufacturer even used the old flags as
pocket linings in boys’ jackets. In 1964, the Long Island merchant
who was selling these jackets decided to remove the jackets from the
stores after receiving customer complaints. In another incident, the
Treo Company of New York, a manufacturer of ladies’ support garments,
created the ‘Stars ’n Stripes’ panty girdle. The girdle’s design
consisted of red and white stripes and blue stars on a white
background. The Daughters of the American Revolution immediately
launched into an attack, condemning the company and demanding the
instant re- call of the girdles. The Treo Company recalled over 3,000
of the panty girdles, vowing to “...burn the damn things or send them
to some foreign country where our flag isn’t involved.” The incident,
instead of hurting the Treo Company, resulted in the company being
extolled for its quick action in recalling the offending items.
According to collector pages, there are still plenty of old 49-star flags around. As one states:
Although only official for one year, the 49 star flag was made in
large numbers and so is still fairly easy to find on the market.
Unless you find a US Navy made flag, their value is fairly low.
And another:
If you were opening a business or a school in late 1959, you would probably opt for the 50-star design. But there were still quite a few people buying 49-star flags. After all, it was a collectible. It was a historical curiosity. And with a seven-month gap between the admission of Alaska and Hawaii, there were plenty of 49-star flags lying around in warehouses. So people bought them up with the intent of reselling them years later. So many people bought them, in fact, that they’re not really that rare nowadays. A quick search of eBay will turn up dozens of vintage 49-star flags for around twenty bucks. So even though the 49-star American Flag isn’t very well-known, it’s still pretty common.
