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Photogravure etchings by Peter Miller・ フォトグラビュール (銅版画技法)・日本語

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Investing in Art: A Checklist of What to Watch For, and Watch Out For

The paradox of investing in art is that its value is mostly intangible, yet it is also a physical object subject to wear and tear, traded like oil or currency futures, and priced according to the dictates of fashion. While certain objective standards affect prices, experienced investors understand that these have little or nothing to do with artistic merit.

The art market has ruined many more investors than it has enriched, perhaps none moreso than people who paid too much for brand-name art in the mistaken belief that it was a safe haven. During the asset inflation of the 1980s, Japanese buyers spent more than $8.7 billion on art ("Art Bought During Boom Leaves Japan After Crash," New York Times, August 15, 1999) and those are only the official trade figures. A Van Gogh and a Renoir bought for $161 million by Ryoei Saito, then president of Daishowa Paper, were later quietly disposed of by his creditors, Fuji Bank, for prices at least one-third less. Swiss dealer Ernst Beyeler bought back many other works, after the inevitable bursting of the Japanese asset bubble, for about one-third of what he had sold them for. His $40 million profit went into construction of a fine private museum in Switzerland

In 2006, Edward Steichen's 1904 landscape The Pond -- Midnight sold at auction for $2.9 million, a new record for photography. Soon after that, two photographs by Alfred Steiglitz sold for more than one million dollars each. Curiously, these works came onto the market as duplicates of those already in the Metropolitan Museum's collection after receiving a gift of the Gilman Paper Company Collection. The auction prices suggest comparison with unique or limited-edition artwork, yet a photographic negative can produce unlimited numbers of photographs. These prices will very likely bring additional photographs from well-preserved negatives onto the market, diluting the value of the buyers' investments. The buyers, whose identities are unknown, may have failed to consider the fact that they were acquiring one instance of a potentially unlimited edition. As investments, in other words, the only way they can be profitable is if they are re-sold before more duplicates appear, and while their glorious provenance is remembered.

A more balanced approach is to enjoy the artwork for its visual appeal while taking reasonable precautions to avoid downside risk. The art market values objective, verifiable factors more effectively than it does the intangibles, such as artistic merit, though it responds over time to changing assessments of the intangibles. In this guide, we consider the basic components of value (which are separate from artistic merit) and their implications for investment in art. These are: Authenticity, Condition, Rarity, Provenance, Familiarity, Importance, and Technique.

Authenticity

Is it the real thing? Reams of scholarship have gone into identifying and attributing works of art. In a print, careful study of the kinds of paper available to the artist, watermarks, plate wear, changes to the composition during a sequence of ‘states’ each with its own limited edition, printing style, and many other factors are used to judge who actually made it. Workshop practices in times and places which valued originality less than we do today also play a part in evaluating authenticity, as it was often customary for masters to sign works actually made by their students or employees. Attributions change: New evidence can transform a priceless Old Master print into a knock-off by an unknown apprentice. Workshop practices in Japan, particularly with ukiyo-e (woodblock prints) entailed such an elaborate division of labor that tracing how they were actually produced can take more time than it took to produce them. Contemporary Western art dealers have staged a determined effort to legitimize prints of unclear authenticity, by proposing a continuum of the artist's 'involvement' in the production of a 'matrix' which others use to generate the final product. This of course obscures, or rather denies by omission, the value of the artist-made print, where the person who signs the print is in fact responsible for all aspects of its design, creation, and printing. That 'restrikes,' or prints from etching plates run off after the artist's death, are of far less value than those printed by the artist demonstrates this fact.

Auction catalogs are typically compiled in haste by people who must research, document, and describe a large number of items. They are an excellent source of misattributions with profit potential for the knowledgeable investor. A print wrongly attributed to a lesser artist or a later century may be purchased for less than its true value and, if the investor’s judgment is provably correct, kept as a trophy or sold at a much higher price.

At the same time, art auctions are very much a 'buyer-beware' situation. Statements in auction catalogues should be regarded merely as opinions, and the actual connection between a work offered for sale and the artist to whom it is attributed is often tenuous. The hedging language employed to support that connection while retaining deniability is ingenious in the extreme: 'Attributed to' = probably; 'Studio of' = executed by a student or apprentice in the artist's studio; 'Circle of' = executed by someone influenced by the artist during the artist's lifetime; 'Follower of' = similar to 'circle of' except the influence is indirect; 'Manner of' = a style related to that of the artist, but executed after the artist's death; 'After' = a copy of a work by the artist. The wisest course is not to rely on the descriptions in auction catalogues, but rather to develop one's own standards for judging the authenticity of works considered for purchase. (S W Hayter's excellent advice on how to look at prints will be of use in this effort.)

Price-fixing collusion by the two major auction houses, Sotheby's and Christie's, defrauded art investors of hundreds of millions of dollars. Long before such practices had been exposed, it was business-as-usual to 'run up the auction record,' that is, contrive a series of false sales purporting to indicate rapid upward price momentum, as a means of luring new unsuspecting buyers. The method is similar to stock market manipulations by the major stockbrokers. In the art world, however, there is not even the pretense of accounting, the market is entirely unregulated, and there is no effective recourse in the event of misrepresentation. The investor is very much on his own to perform appropriate 'due diligence.'

Condition

Prints that have been stored in humid or acid environments acquire stains from molds and fungus spores that proliferate in damp places. These stains are extremely difficult to remove. Adhesives, acid-filled framing materials, and other poor conservation practices are other common sources of value-degrading flaws in prints. (For a guide to print framing and conservation practice, and sources of archival storage boxes and related materials, see Collecting.) The most common flaws are:

Foxing and water stain. The small brownish stains known as foxing probably come from molds and fungi, which are most abundant in high-humidity environments. Standard cleaning treatments are ineffective or harmful; these stains must be treated by paper conservation specialists.

Mat burn. Chemicals leaching out of mat-board made from pulp or other acidic materials cause stains around the window borders of mats.

Glue stains. Brush-like glue stains can be detected along the borders of prints affixed to mats by incompetent framers.

Insect damage. Silverfish are attracted to the sizing in paper, not the cellulose itself. These and other insects leave visible tracks in paper.

Printing crease. In old intaglio prints, before etching presses were exactly calibrated, paper buckling caused uneven inking. This flaw was especially prevalent in large-format prints, visible as white lines where plate and paper did not come into full contact.

Exposure to light fades all photographs and digital prints. Color dyes fade more quickly than black-and-white, and all prints such as (ukiyo-e) made with dyes show visible fading after a few years. Prints made with pigments rather than dyes do not fade, and ink made of carbon black is permanent. For some artists and collectors, however, flawlessness is not necessarily always a virtue. Perhaps the most famous example is Rauschenberg's prints from a cracked lithographic stone, which became iconic (and therefore expensive) symbols of the role of chance in art-making. Other artists deface their works with scratches, abrasions, creases, and other marks, apparently to highlight their hand-made quality or perhaps to confound the appraisers. Assuming one can distinguish intentional defacement from value-destroying damage, it remains true that a damaged print is sold for less in the art market than one in flawless condition.

Defects provide profit opportunity if the cost of the item plus the cost of competent restoration is much less than the current market value of the item in fine condition. With prints or any work of art, this requires a keen eye for defects that depress the purchase price, but which can be remedied by an expert restorer. Investors often bring a restorer with them to inspect prints on offer and estimate restoration cost. The most skillful restorers cover their tracks so well that they intentionally leave minor defects, to divert attention from the major ones they repaired. Clumsy restoration, such as bleaching to remove foxing stains, or using water on water-soluble dyes, can leave the print in worse condition than it started. Expert restoration involves chemical analysis of stains and papers, precise matching of treatments to defects, and where the original papers in Old Master prints are simply no longer available, artificial aging of the replaced paper. Ideally all of these matters should be disclosed to buyers, though independent investigation is advisable.

Among some collectors of antiquities, flaws and defects are regarded as ‘the patina of age’ and come to be considered positive aesthetic characteristics in themselves, not merely a guarantee of ancientry. And so the faded, cracked oil paintings, the old Chinese ink paintings on silk which are barely visible beneath centuries of dust and oxidation, are accepted and even valued in their decrepit state despite the fact that they looked a great deal brighter when originally made. Fear of clumsy restoration may be responsible for the failure to attempt it. The antique trade also fosters a lot of superstition about the value of advanced age, and as long as this superstition persists, such signs of age as do not completely obliterate the work will continue to be valued.

Rarity

One-of-a-kind Old Master artwork of unquestioned authenticity and in perfect condition commands the highest prices. Prints exist in multiples, and the price of each print is generally commensurate with the size of the edition. Prints from a limited edition, all other things being equal, are worth more than those from an unlimited edition. The limits are imposed by plate wear, which occurs at a different rate with each type of print. Intaglio (etchings, aquatints, mezzotints, drypoints, photogravures) editions are the smallest because the copperplate is soft and subject to abrasion from repeated wiping of ink. Among intaglio prints, the delicate burr of a drypoint disappears after 20 impressions at most, while the others can sustain more impressions, depending on how deeply etched. Steelfacing can extend the number of printable impressions, but at the cost of some loss of plate tone and subtlety. True intaglio prints show a distinctive platemark from the pressure of the etching press on paper and plate. Lithographic stones and plates, and silk-screens, can produce editions in the hundreds, and woodblocks are sturdy enough for thousands of impressions. Digital prints, giclées, and posters are physically unlimited, though edition size may be artificially limited to support a price desired by the publisher. Their current proliferation seeks to challenge accepted notions of scarcity, asserting that value is somehow not diluted by the numbers produced. This is about as credible as the notion that stock-option proliferation doesn't dilute the value of pre-existing shares in a company. Speculation notwithstanding, the laws of supply and demand have not been repealed. Truly limited editions -- limited by physical constraints of the materials -- will always be more valuable than mass-produced copies.

Relative scarcity changes over time; the investment opportunity consists of buying when works are plentiful and holding them until they become rare. This ‘buy-and-hold’ approach to contemporary art is actually easier than it seems. It does not require waiting an entire lifetime to realize scarcity-value. While the art market, rather ghoulishly, anticipates the deaths of prominent artists and prices their work accordingly, in fact it is more rewarding to look at one oeuvre as encompassing several lifetimes. Artists grow and develop new understandings, techniques, and themes as they mature, and in many cases they never return to an earlier style. Some keep their youthful exuberance till the end, and some don’t. Some do their most profound work in youth or middle age, then spend the rest of their lives in mannered imitation of those successes. Others reach a peak of performance after a lifetime of effort. For some collectors, earlier work holds the key to later work, and acquires value as part of the whole story. Close study of the trajectory of an artist’s life and work will often reveal unexpected scarcities, periods of past accomplishment that, sadly, will never be recovered even though the artist may still be alive.

Because the ‘canon’ of contemporary art is still unsettled, the buy-and-hold strategy requires the investor to cast a wide net, to diversify holdings among a variety of styles, techniques, and cultures.

Provenance.

The provenance of an artwork is simply the history of who owned it. A print from a well-known museum or private collection is worth more in the market than an otherwise equivalent print from an unknown source. The art market presumes that the museum or discerning collector had the means to vet authenticity, condition, and the other elements of value, and the curatorial judgment to know what’s best. Essentially the price contains an insurance premium based on reliance on established authority. Just as new evidence can change attribution (who made the work), new evidence can also change provenance (who owned the work) and hence market value. Tracing provenance can reveal the ups and downs of an artist’s reputation, how the work was perceived and valued during different periods of history, as shown in sales records, probate records, and other transaction documents.

The musty field of provenance studies has been shaken up in recent years by revelations of shady dealings in the antiquities trade. For as long as antiquities have been highly valued, the trade has depended on obscure dealings with treasure hunters and looters of ancient sites, plus networks of dealers capable of moving artwork out of its country of origin. The black-market trade in antiquities is estimated to be worth between two billion and six billion dollars per year, making it the fourth-largest criminal enterprise in the world (after drugs, money-laundering, and weapons). Professional criminal organizations serve as intermediaries between tomb robbers, treasure hunters, various levels of dealers through to sanitization by some of the most venerated institutions in the world. Museums, in seeking to build their collections, have tried to satisfy themselves about authenticity without inquiring into the indiscreet details of recent provenance. Inevitably the antiquities trade attracts counterfeiters and those on the fringe of the restoration business who specialize in making new things look old. The result of all this is that a surprisingly large proportion of the antiquities in museums is of questionable title or authenticity.

These facts typically come to light when rightful owners try to reclaim works of art, or seek restitution for their loss. Major works of art looted by the Nazis from Jewish owners have found their way into many of the famous museums of the world. In many cases the museums have admitted they failed to check the provenance of works offered to them, and paid restitution to the rightful owners. International treaties enable nations whose antiquities have been exported illegally to pursue them as stolen property, and courts in the United States and other destination countries are increasingly sympathetic to these claims. Some museums, including the Metropolitan Museum of New York and the Getty Museum, have repatriated some items in their collections, in return for properly compensated long-term loans of the works for exhibition. Italy, Greece and Turkey have asserted their rights to looted antiquities under current international law. Private investors are equally vulnerable to claims regarding antiquities of undocumented provenance, particularly when they try to sell them.

The removal of art treasures from remote archeological sites to the capitals of Europe and America has been going on since at least the mid-19th-century. In Central Asia, the expeditions of Aurel Stein, Albert von Le Coq, and Paul Pelliot resulted in the discovery and export of huge quantities of Buddhist artifacts from Chinese Turkestan to Britain, Germany, and France (respectively). These treasures, including wall paintings removed from caves, plus manuscripts, sculptures, and block prints, had been buried for centuries under the sands of the Taklamakan and Gobi Deserts. Once flourishing oases of the ancient Silk Road, these sites revealed Hellenic and Indian influences in previously unknown forms of Buddhist art. Manuscripts taken from Dunhuang include the earliest printed book, the Diamond Sutra, printed in 868, centuries before the Gutenberg Bible. Today Chinese authorities assert, with some rightness, that these invaluable works were stolen. Yet this has not deterred other Chinese officials from actively assisting in the continuing sale of cultural artifacts to overseas collectors.

In a China New Digest report of May 23, 2000, this contradiction was highlighted by Hong Kong Legislative Councillor Cheung Man-kwong, who called on the government to intensify its efforts to stop the smuggling of cultural relics."Cheung noted that the smuggling of stolen relics from the mainland is a significant problem, pointing out that there are also many cadres engaged in the smuggling trade. 'It's ridiculous for the government to work hard to recover relics from foreign possession but on the other hand to turn a blind eye to the exodus of these relics,' Cheung added."

Should China manage to sort out a unified approach to its cultural heritage, now dispersed in the museums of 26 countries, the scale of repatriation would be massive. The new assertiveness of countries of origin concerning their cultural heritage suggests that investors will have to be increasingly wary about provenance and obtain written guarantees of clear title, particularly in the field of antiquities.

The United States and Italy signed an agreement ('U.S. Works With Italy on New Rules Regarding Ancient Treasures,' Celestine Bohlen, New York Times, February 28, 2001) shifting the burden of proof to buyers of antiquities. For any archaeological artifact leaving Italy after January 23, 2001, US importers are now required to prove legal ownership. The scope of the agreement covers vases, statuary, wall paintings, armor, jewelry made between the ninth century BC and the fourth century AD, and it includes goods of Italian origin regardless of which country they arrive from. The agreement also gives US Customs agents more authority to challenge suspect antiquities at the border, before they can be sequestered in public or private collections. Italian officials praise the agreement as an important tool in stopping the flow of contraband through the chain of tomb-robbers to antiquities dealers to museums. Archaeologists also deem it important to preserve the physical context of antiquities.

Antiquities dealers and museum curators predictably mourn the end of an era of no-questions-asked purchases. They will neverthless be required to comply with the new rules on verifying provenance prior to purchasing works originating from the countries subject to international agreements. At a minimum, careless curators and collectors will have to repatriate artwork of questionable provenance at a loss, and may also face criminal penalties. American museums, including, significantly, the Getty, had already begun scaling back their purchases of antiquities lacking a clear provenance. The new rules will reduce the scale of the illicit trade in antiquities, and for private collectors the risks and difficulties of proving ownership of suspect artwork will likely not be worth the trouble.

The arguments for leaving valuable artwork in situ have, however, been weakened by the Taliban's destruction of the Bamiyan Buddha statues in Afghanistan in March 2001. It took tanks, rockets, mortar fire, and implanted explosives to get the job done, but now these priceless treasures of world cultural heritage are gone, along with numerous other images of living beings that violated the religious teachings of a mad sect. The few remaining treasures of Afghan art having acquired a great scarcity value, they have followed the well-worn smuggling routes of weapons and drug dealers. The cultural losses inflicted by the Taliban provided arts smugglers and dealers with the justification they sought to bring endangered statues and images out of Afghanistan, into Peshawar, Pakistan enroute to the higher circles of antiquities dealers and collectors.

A consortium of the largest and oldest Western museums issued a statement late in 2002 asserting that they remained the best and safest repositories of 'universal culture.' As against those who would dispossess the likes of the British Museum, the Metropolitan Museum of New York, and the Louvre of their admittedly looted goods, the museums argued that contemporary standards don't apply to the way such artifacts originally came into their collections. And as the examples of Afghanistan and China show all too clearly, such artifacts may indeed be better off in London or New York or Paris than if left to the whims of local warlords or religious or political zealots.

Yet perhaps there is a third way, whereby the 'universal-world' museums and the countries of origin can collaborate on cultural heritage. The International Dunhuang Project (http://idp.bl.uk/ ) is the most successful example of such collaboration that I am aware of. The British Library together with Chinese groups are working together on the many difficult issues of conservation, display, public access, exploration and discovery, and publication of research on the cave paintings of Dunhuang. Like similar joint efforts in the field of nature conservancy, the International Dunhuang Project is building local capability and responsibility for cultural heritage. This is the best insurance of survival of the artifacts, and far superior to the 'bank-vault' mentality of the major Western museums. While the controversy of museum antiquities versus in-situ preservation is unlikely to be settled anytime soon, clearly the traditional customs that have bound antiquities collectors to looters are undergoing massive change. It is unlikely that the antiquities collectors' free ride will continue undisturbed for very long.

Familiarity of Subject Matter

People respond to and buy what they are most familiar with. They may have acquired that familiarity through childhood experiences, movies, education or research in an artistic specialty, travel, work, publicity, or various other sources. Subjects that tap into childhood or adolescent memories predictably fuel the nostalgia boom of every generation that comes of art-buying age. Souvenirs of places, even or especially far-off places and times, enable indulgence in fantasy. Works of iconic significance that ‘define who we are’ or embody a recognizable mood or are intimately bound up with a moment of history have special value. In recent years the earliest photographs -- daguerrotypes, salt prints, photogravures -- seem to have acquired such iconic significance. Even the fuzziest of them have become valuable, a value not based on their visual appeal, for the image is often close to invisible. The tendency to buy what is familiar has the important consequence of fragmenting the art market into many local and regional markets. The unfamiliar doesn’t ‘travel well’ at first. American prints are sold mainly in America, British prints in Britain, German prints in Germany, and so forth. Very few artists have achieved such international prominence that their works can be sold and re-sold outside their home markets. In the 1960s, the convergence of Pop Art with mass media images overwhelmed all other sources of familiarity, creating an unprecedented global market for that genre, supporting prices out of all proportion to artistic merit. Whether this globalization will benefit other genres remains to be seen. National borders are clearly becoming less salient, as more and more artists and buyers are becoming familiar with foreign cultures.

 

This cross-border fungibility, and the arbitrage opportunity it presents, is not new. Japanese ukiyo-e publishers understood how to take advantage of different values in different markets as early as the 18th century. From then until mid-20th-century, they sold works for fine-art prices in Europe which were treated domestically as fish-wrap and priced accordingly. Japanese buyers only appreciated these prints after their value had been recognized overseas. Until recently, it was possible to acquire ukiyo-e in Europe for profitable re-sale in Japan. The Japonisme boom was perhaps the first example of an international market in folk art. Picasso later helped popularize African folk art, which enjoyed some vogue in the 1950s and is attempting a comeback with Yoruba sculpture. Inuit art, and to a lesser extent American quilts, Australian aboriginal art, and Tibetan mandalas, are also now acquiring a marketable cachet. The transformation of native handicraft into High Art is not always a sure thing, however, as many buyers of beaded and turquoise artifacts may be aware. But the Japanese story of art unappreciated in its home market has been repeated elsewhere. American connoisseur Peggy Guggenheim and others acquired early abstractionist and expressionist works cheaply in war-torn Europe and brought them successfully to America, to great acclaim. It wasn’t as easy as all that, of course -- it took guts and vision, numerous museum exhibits and critical scholarship, but at the end of the day, Americanized Abstract Expressionism triumphed over the European version of modern art embodied in Surrealism. There are no more bargains to be had in Abstract Expressionist works.

Importance

At the pinnacle of importance in architecture are World Heritage sites, places such as the Acropolis, Jerusalem, Mont St-Michel, Stonehenge, the Taj Mahal, the temples of Kyoto, Angkor Wat, Machu Picchu, etc., universally acknowledged as embodiments of the highest cultural achievements of humanity. These would seem to be unchangeable, though actually Angkor Wat is a relatively recent addition to the list, and Machu Picchu was 'discovered’ (by non-residents) only in 1911. In the graphic arts, a few works have achieved such iconic status -- Rembrandt’s Night Watch, daVinci’s Mona Lisa, Fan K’uan’s Traveling Among Streams and Mountains, Monet’s Water Lilies are examples. In the more specialized world of prints, Importance is composed of Influence, Technical Innovation, and designation as the Exemplar of a Style. An artist who influenced later artists is Important. Such influences are sometimes hard to pin down, requiring much research on questions of who saw what when. Technical innovation such as aquatint, chiaroscuro, and Pointillism, confers Importance, as do revolutions in style such as Impressionism, Cubism, and Abstract Expressionism. Works representing an identifiable style or art movement acquire a significance greater than they might have on their own. Agenda-driven art tries to borrow Importance from current events -- a dubious strategy, since headlines happen every day, while truly great art is still a rare occurrence. Investors who are prepared for today’s political art to be relegated to the ranks of the forgotten are least likely to be disappointed.

Technique.

Works requiring the use of an extremely difficult or demanding technique may possess additional value on account of their rarity. But technical wizardry in the absence of aesthetic appeal usually does not bring a high price. Durer’s engravings are superb technical accomplishments requiring months of labor, but their artistry goes well beyond technique. The history of printmaking reveals constant competition between intrinsically rare special techniques and easier-to-produce (and therefore cheaper) reproductions. The value of the special technique then hinges on a difference in quality, such as subtle tonal gradation, precision of line, depth of color, and an overall hand-made look. At times, however, the industrial, mass-produced look has a superior cachet, as in the past vogue for Benday dots, xerography, and and faded or garish color. Digital prints made with high-quality home printers are becoming increasingly affordable to produce, a trend which will inevitably be reflected in their price. As digital prints proliferate, their market prices will converge toward the cost of their materials. Original, hand-made prints have some sort of distinguishing mark or signature look that cannot be reproduced en masse. Ultimately the value of technique is based on how well-integrated it is with artistic expression.

Size

Size is often used to assert value, as if occupying a large portion of vertical real estate were inherently valuable. It is not the works themselves, however, but the space they take up that is scarce, for such vast spaces are found only in the largest museums, public buildings, and corporate headquarters. Whatever is placed there has at least a temporary value by virtue of the politics that brought it to such an exalted position. Thus the content of the work itself -- design, form, color, subject matter, depth, artistic merit -- becomes a secondary consideration in such settings. Photographs have staked their claims to this space, some three-meter-wide examples having sold at auction for $270,000 in March 2001 ('Racing for Dollars, Photography Pulls Abreast of Painting,' Richard B Woodward, New York Times, March 25, 2001). That's $5,000 per square foot. Many doubt that such prices are sustainable, asking, like the New York Times, 'What will happen to price expectations when, as some conservators and dealers predict, the color in some of these high-priced prints starts to fade?' The trend may fade even before the color does.

Superior technique provides an exception to the perception that larger works are more valuable than smaller ones: Persian miniatures, medieval books of hours, and intricately carved Japanese sword guards are gems far more valuable than contemporaneous works many times their size. While there are occasionally speculative gains to be made in works of gigantic scale, the market for them is necessarily thin and volatile, and the downside risk commensurately large.

Duccio MadonnaIn June 2005, The Metropolitan Museum of New York paid $45 million to $50 million for the painting Madonna and Child by the early Renaissance Sienese master Duccio di Buoninsegna. At only 11" x 8" (28 x 20 cm), this painting may be the most valuable object per square inch on the planet. It is certainly exquisite, and its small size provides convincing evidence that value does not inhere in size. Painted in 1300, the Duccio Madonna and Child offers perhaps the first spontaneous gesture in Western art, as the infant brushes aside his mother's veil. A human dimension is also unveiled as Western art begins to free itself from centuries of Byzantine rigidity.


Scams

If the elements of value mentioned above (authenticity, condition, rarity, and so forth) were all that determined prices, investors could afford to ignore market manipulations designed to inflate prices. Unfortunately, such information is concealed precisely to prevent unwary buyers from realizing how artificially high a current price might be. Controversy occasionally brings such practices to light. The Brooklyn Museum's aptly named 'Sensation' exhibit featured excretory works of British 'artists' from the holdings of Charles Saatchi. Sponsorship of the exhibit, in the amount of $160,000, was provided by ... Charles Saatchi. In 1998, the same exhibit at the Royal Academy in London led to sales of $2.7 million through Christie's, the auction house. The Brooklyn Museum tried to keep the Saatchi payment secret, though when it was revealed in court filings, the Museum director disclaimed any tie-in to the exhibit. Christie's 'donated' $50,000 to the Brooklyn Museum, receiving free unlimited access to the Museum for the entertainment of its private clients during the exhibit. That this might boost the prices of works by these 'artists' sold by Christie's at the same time was never a consideration, according to Museum officials. The Brooklyn Museum also solicited 'donations' of at least $10,000 each from dealers representing the 'artists' whose works were exhibited. The rock singer David Bowie sought and received permission to show the exhibit on his website, which sells art, clothing, and memberships in his fan club. It happened this was shortly after he had contributed $75,000 in support of the exhibit. Traffic at his website tripled. This payment was also kept secret, and when disclosed, the tie-in was again denied. In fact, however, Museum officials assisted one collector (Saatchi) and affiliated dealers in manipulating the art market to boost prices and sales in their favor. All other collectors who were approached for contributions refused, pointing out that they had no interest in lining another collector's pockets. ('Exhibit Was Heavily Financed by Those With Much to Gain,' by David Barstow, The New York Times October 31, 1999; "Far more than has been previously disclosed, the 'Sensation' exhibition at the Brooklyn Museum of Art has been financed by companies and individuals with a direct commercial interest in the works of the young British artists in the show, according to court documents and interviews with people involved in the exhibition. [Museum officials] raised hundreds of thousands of dollars from those who stood to profit most from the exhibition of contemporary art, a practice that other museum executives say was practically unheard of and ethically problematic." )

Other scams to artifically inflate prices involve the building of an auction record. Dealers offer certain works to their clients as good investments, then stage sales at auction houses where associates 'purchase' the works for progressively higher prices. The anonymity of auction bidding makes this possible; buyers often have legitimate reasons for not disclosing their identities. The published hammer prices at a series of auctions provides apparent justification for an inflated price, fooling buyers into believing their investment will grow at the same rate. Of course, once the sales campaign is over, the price drops to its former level. Dealers and auction houses move on to the next hype-du-jour.

The best dealers supply not merely an exhibit space and sales staff, but expert knowledge that combines aesthetic and commercial understanding of value. For example, knowledgeable dealers can help identify 'house bids,' overpayment by unsophisticated buyers, and publicity, all of which tend to inflate prices at auction. They can then relate the price record to the fundamentals such as authenticity, condition, rarity, to arrive at a reasonable value.

Giving and Receiving at the Same Time

The tax laws of the United States make it possible to donate appreciated works of art to cultural and educational organizations, and deduct part of the appreciated amount from tax otherwise payable. For example, a print purchased for $500 and reliabily appraised to have a market value of $3,000 entitles the donor to deduct part (the exact percentage depending on year of purchase) of the $2,500 gain from current tax. Though such donations, tax on gains in one business can be offset by charitable donations of appreciated artwork without any cash outlay. The ability of museums to accept such donations provides a substantial convenience to collectors, who would otherwise be subject to the vagaries of auctions.



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Original photogravure etchings seen at this site are available by clicking the order button on any full-screen image page, or from these fine print dealers:

Galleries

Baltimore: Conrad R Graeber Fine Art, Box 264, Riderwood, Md, U.S.A., tel +1-410-377-6713
Cleveland: Verne Gallery, 2207 Murray Hill Road, Cleveland, Ohio 44106, U.S.A., tel +1-216-231-8866
San Francisco: Japonesque, 824 Montgomery Street, SF, Ca, U.S.A., tel +1-415 391-8860
Paris: Le Voleur d'images, 9 rue de Saint-Simon Paris 7e, France, tel +33.1.45.51.07.77
Netherlands: Eric van den Ing, Saru Gallery, tel: +31(0)6-2246-4074.
Moscow: Lumiere Brothers Center, 119072, Москва, Болотная набережная д.3 стр.1 (Red October, Bolotnaya emb 3 b. 1, Moscow, Russia, 119072), tel +7-968-451-4019
Vladivostok: Arka Gallery, 5 Svetlanskaya St, Vladivostok, Russia, tel +7-4232-410-526
Yokohama, Japan: 吉田町画廊、〒231-0041 横浜市中区吉田町5-14, ;JR関内駅北口より徒歩7分; Tel 045-252-7240; Yoshidamachi Gallery, Yokohama Naka-ku Yoshidamachi 5-14


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