From VoxEU, Sept. 21:
The auction market provides important information regarding prices to a host of players, including buyers, sellers, investors, students of art history, and even economists. Already dominating the high-end public auction system in art, Christie’s and Sotheby’s have recently been making a significant push into private sales. This column examines the potential implications of this move for the art market and whether it may decrease competition.
A recent development for Christie’s and Sotheby’s auction houses has been their significant push into private sales. In 2018, private sales at Sotheby’s increased by 37% to $1 billion, or over 15% of all sales at the auction house, and at Christie’s, private sales increased by 7% to $653.3 million (Schultz 2019). This increase at Sotheby’s is due to a concerted effort to expand revenue streams beyond those of traditional open-outcry auctions.Is this push into private sales by Sotheby’s and Christie’s good for the art market? After all, the auction market provides important information regarding prices that is used by a host of players, including buyers, sellers, investors, students of art history, and even, economists. Furthermore, Sotheby’s and Christie’s, with their dominance of the high-end public auction system in art, are in a unique position to use their understanding of the market and especially connections to customers, both buyers and sellers, as advantages in establishing themselves in private sales.
The importance of the public auction system
Orley Ashenfelter’s seminal 1989 article, “How auctions work for wine and art”, begins with the story of a widow wishing to sell her late husband’s wine. A ‘helpful’ relative offers a very low price for the entire collection, but publicly available prices fetched at auction for identical wines indicate the collection is worth six times the amount offered.Some of the most fascinating stories about auctions involve the surprising ‘discovery’ of a highly valued artwork in an auction where prices were expected to be very low. This kind of story illustrates one way that regular auctions confer information benefits that are typically not captured by the profits of the auctioneer....MUCH MORE
On Duveen, the King of private sales,
From the intro to September 2013's "Duveen: The Greatest Salesman Ever":I've mentioned Joseph Duveen a few times, most recently in the intro to 2011's "Wildenstein: The Art World's Most Powerful Dealer Family".
Today his name came up because of a long form post at Quartz: "High-end art is one of the most manipulated markets in the world" that I'll link to again as tomorrow's weekend read.
Joe Duveen went from being one of thirteen children of a successful Jewish-Dutch importer to being
1st (and last) Baron Duveen, all because of a simple observation:
"Europe has a great deal of art, and America has a great deal of money."On that "Great deal of money", his buy-side clients included J.P. Morgan, Henry Clay Frick, William Randolph Hearst, Henry Huntington, Jules Bache , Andrew Mellon and John D. Rockefeller.
On the sell-side various European Aristos e.g. the seller of the painting below, the landlord known as the Duke of Westminster.
There have been two biographies of Duveen, the first by Behrman is better written but contained errors while the later one by Meryle Secrest is more accurate in the details, partly because she had access to the Getty Museum's hundreds of linear feet of business records and ephemera:
Duveen Brothers Resources
We have been planning to serialize Behrman's six New Yorker articles on Duveen, here's a taste of the first one, from 1951:
The New Yorker
September 29, 1951: 33-61When Joseph Duveen, the most spectacular art dealer of all time, travelled from one to another of his three galleries, in Paris, New York, and London, his business, including a certain amount of his stock in trade, travelled with him. His business was highly personal, and during his absence his establishments dozed. They jumped to attention only upon the kinetic arrival of the Master. Early in life, Duveen—who became Lord Duveen of Millbank before he died in 1939, at the age of sixty-nine—noticed that Europe had plenty of art and America had plenty of money, and his entire astonishing career was the product of that simple observation. Beginning in 1886, when he was seventeen, he was perpetually journeying between Europe, where he stocked up, and America, where he sold. In later years, his annual itinerary was relatively fixed: At the end of May, he would leave New York for London, where he spent June and July; then he would go to Paris for a week or two; from there he would go to Vittel, a health resort in the Vosges Mountains, where he took a three-week cure; from Vittel he would return to Paris for another fortnight; after that, he would go back to London; sometime in September, he would set sail for New York, where he stayed through the winter and early spring.Occasionally, Duveen departed from his routine to help out a valuable customer. If, say, he was in Paris and Andrew Mellon or Jules Bache was coming there, he would considerately remain a bit longer than usual, to assist Mellon or Bache with his education in art. Although, according to some authorities, especially those in his native England, Duveen's knowledge of art was conspicuously exceeded by his enthusiasm for it, he was regarded by most of his wealthy American clients as little less than omniscient. "To the Caliph I may be dirt, but to dirt I am the Caliph!" says Hajj the beggar in Edward Knoblock's "Kismet." Hajj's estimate of his social position approximated Duveen's standing as a scholar. To his major pupils, Duveen extended extracurricular courtesies. He permitted Bache to store supplies of his favorite cigars in the vaults of the Duveen establishments in London and Paris. One day, as Bache was leaving his hotel in Paris for his boat train, he realized that he didn't have enough cigars to last him for the Atlantic crossing. He made a quick detour to Duveen's to replenish. Duveen was not in Paris, and Bache was greeted by Bertram Boggis, then Duveen's chief assistant and today one of the heads of the firm of Duveen Brothers. While Bache was waiting for the cigars to appear, Boggis showed him a Van Dyck and told him Duveen had earmarked it for him. Bache was so entranced with the picture that he bought it on the spot and almost forgot about the cigars; he finally went off to the train with both. There was no charge for storing the cigars, but the Van Dyck cost him two hundred and seventy-five thousand dollars.Probably never before had a merchant brought to such exquisite perfection the large-minded art of casting bread upon the waters. There was almost nothing Duveen wouldn't do for his important clients. Immensely rich Americans, shy and suspicious of casual contacts because of their wealth, often didn't know where to go or what to do with themselves when they were abroad. Duveen provided entrée to the great country homes of the nobility; the coincidence that their noble owners often had ancestral portraits to sell did not deter Duveen. He also wangled hotel accommodations and passage on sold-out ships. He got his clients houses, or he provided architects to build them houses, and then saw to it that the architects planned the interiors with wall space that demanded plenty of pictures. He even selected brides or bridegrooms for some of his clients, and presided over the weddings with avuncular benevolence. These selections had to meet the same refined standard that governed his choice of houses for his clients—a potential receptivity to expensive art....MUCH MORE
We'll
have the second of the six articles next week, in the meantime here's
one of the pictures that passed through Duveen's hands, Gainsborough's Blue Boy:
Which was followed by
*****
One of the paintings that passed through Duveen's hands, The Small Cowper Madonna by Raphael which had come down through the Earls of Cowper until Duveen bought it and then sold it to Peter Widerner.
This was a fairly typical example of Duveen's observation that "Europeans have a lot of art and American's have a lot of money".
Widener ranks as the 27th richest
American of all time while the Cowper clan held the Earldom for seven
generations before it went extinct in 1905. Duveen sold the painting for
a guesstimated $700,000 which was the highest price ever paid of a work
of art (until he sold the Gainsborough in part I of the series)
Here's the painting's provenance at the NGA.
If interested see also:
