Art: The Solid-Gold Muse

(See Cover)

For days beforehand, the single sentence had been heard so often among people in the New York art world that it began to sound a bit like a secret password: “I suppose I’ll be seeing you Wednesday night.” On the night in question last week, the nation’s biggest auction house, Parke-Bernet Galleries, sold off a group of 24 paintings that had been collected by the late advertising executive Alfred William Erickson and his wife Anna. Among the paintings was Rembrandt’s Aristotle Contemplating the Bust of Homer, which bears the unhappy nickname of “The Million-Dollar Rembrandt.” Though there were other spectacular pictures in the collection, Aristotle had been the conversation piece of the art market since Parke-Bernet got the job of auctioning it off.

Rumor, that most efficient of press-agents, had been feverishly busy. It was even said that the Soviet Union was out to get the Rembrandt in order to deliver a crushing blow to Western prestige. Parke-Bernet (pronounced Eer-net) issued about 850 tickets for seats and standing room in the main gallery, but almost twice as many people showed up on the big night, and tickets were selling for $50 on the black market. A queue began forming on the sidewalk more than an hour before the auction was to begin; not only Parke-Bernet’s main gallery, but also three others, equipped with closed-circuit TV, were jammed to overflowing. Everyone from Billy Rose to Paul Mellon, from Perle Mesta to Director James Rorimer of the Metropolitan Museum of Art, was on hand. No art auction in history had aroused more curiosity.

A Disappointing Van Dyck. At 8 p.m., Auctioneer Louis J. Marion, his English as Tammany and his French as fractured as ever, took his place behind his rostrum, admitting that he had seldom been more nervous. As cameras flashed, the sale began with a portrait by the 16th century Dutch painter Jan Mostaert. A portrait by Van Dyck went for a disappointing $27,000, which was $53,000 below the Parke-Bernet estimate. On the other hand, a splendid Princess Sibylle of Cleves, by Lucas Cranach the Elder, was bought by Thomas Agnew & Sons of London for $105,000, about twice the estimate. After the Cranach came the Rembrandt.

The bidding opened at a cool million from “a private individual,” as Marion said. From then on, it leaped at $100,000 a bid until only two competitors were left in the race. The venerable international firm of Rosenberg & Stiebel was representing the Cleveland Museum of Art; James Rorimer was bidding for the Met. The gentleman from Rosenberg & Stiebel did his bidding with a gesture of the hand, Rorimer with cocked thumb reinforced with a wink. After an eternal four minutes, Rorimer winked for the last time. The Rembrandt was his for $2,300,000, the highest known price ever paid for a painting anywhere.

With Wall Street So Close. Flushed and happy, Rorimer announced that “several Trustees and private individuals” had contributed toward making the Met’s victory possible. They had not quite raised all of the money, said he, “but our credit is good.” He recalled that the Rijksmuseum of Amsterdam had once tried to buy the painting, but Mrs. Erickson had said that she wanted to see it in the Met. “I’m a believer in fate,” said Rorimer, “and the picture has come to us, even if the hard way.” And then he added, in a fine tribute to the relationship between money and culture, “It would have been heartbreaking, with Wall Street so close, to have lost out on it.”

The auction was all over in 60 minutes, but those 60 minutes broke most of the major records in the annals of art sales. Parke-Bernet’s sale brought in a larger amount of cold cash—$4,679,250—than any other art auction in modern times. The price of the Rembrandt topped the previous record of $1,166,400 set by Andrew Mellon when he bought Raphael’s Alba Madonna (see color) from the dollar-short Soviet Union in 1931. Beyond all that, the Erickson sale capped New York’s postwar rise to leadership in the art market, challenging London’s long sway.

A Mad & Marvelous Market. Whether in Paris, London or New York, it is a mad and marvelous market. The business of getting art from artist to buyer is a combination of wall-to-wall dignity and out-and-out chicanery, of lofty values and low-down tricks, of delightful esthetics and deplorable ethics. It could not be otherwise. For what is sold ranges from the priceless to the worthless, from the irreplaceable (but occasionally fakable) old master to such comic trivia as a smashed and baled automobile purporting to be a sculpture. The dominant trend in the business is that the most sought-after goods, the works of great artists now dead, end up as gifts to museums and are thus removed from the market even as the art-consuming public grows in proportion to the ever-rising affluence of the U.S. and Europe. As the great masters vanish, the buying public turns to more recent art. The result is rising prices all along the line and unwonted riches for the artist.

The fever to own art is spreading everywhere. It has invaded modern office buildings, where directors solemnly gather in board rooms bedecked with gaudy abstractions that would have made many executives—both with and without discrimination—choke a decade ago. New museums need to be filled; old ones must be kept in the running. As reproductions fall increasingly from favor, every wall in every house cries out for an original painting. Dealers’ scouts prowl the earth for new treasures, and every auction seems to top the last.

Setting Prices. Most art is sold through dealers, who try to keep their prices secret, and it is the auction house that the public must rely on to get an idea of what is being paid for what. The world’s biggest auction house today is Sotheby’s in London, and there is no quicker way to see what has been happening in the art world than to check Sotheby’s recent sales.

It was a Sotheby’s sale in 1958 that most dramatically set the level of the recent market. On the block were seven French paintings from the collection of the late Jakob Goldschmidt of New York; the collection’s Cezannes, Renoirs and Manets established new highs for these artists (see color, center spread) and served notice on museums and collectors that the scarcity of great works of art had now pushed their value to such heights that collectors had better start buying before things got out of hand.

Between October 1958 and July 1959, the gross at Sotheby’s was $16 million, including $770,000 for a Peter Paul Rubens (see opposite page), until last week the highest price ever paid at an auction. A Gauguin Tahitian scene, owned by George Goodyear of Buffalo, fetched $364,000. Cezanne’s Peasant in a Blue Blouse got $406,000; and Gainsborough’s Mr. and Mrs. Robert Andrews brought $364,000, the top price ever paid at an auction for an English painting.

Frans Hals’s Portrait of a Cavalier, which, unknown to the art world, had been residing for more than 100 years in the collection of a Major Warde-Aldam, went for $509,600. This year a new record for Goya was set with the sale of his hapless Duke of Wellington, which thereupon went to London’s National Gallery and was almost immediately stolen. The Montreal collector, L. V. Randall, sold his master drawings for $186,400. Among them was a saint by Hugo van der Goes that brought an astonishing $84,000, making it the most expensive drawing of all time. Last year Sotheby’s sales spiraled to a dizzy $28,834,100 (as compared with Parke-Bernet’s $8.430,306).

Auctions: Theory & Practice. In theory, auctioning a work is the most accurate way to put a price on the priceless; in practice, its major visible flaw is “auction fever,” in which rich amateurs get carried away and bid against one another to force prices up from 25% to 60% more than prudence dictates. But—also in practice—there is more to many an auction than the eye can see, mostly stemming from the fact that art dealers often comprise about three-fourths of the bidders.

To keep the market up for a particular artist, for example, a dealer may place a work on sale, then bid it up himself so that the price for that artist will reach a new plateau. In another dodge, dishonest dealers sometimes hold pre-auction conspiracies among themselves: they buy shares in a work that is scheduled for the block and select one of their number to bid on it while all the rest pledge themselves to remain silent. With the competition thus limited, the selected dealer gets the work at a low price. When he, in turn, sells it at a substantial markup, all the shareholders get a cut of the profit.

Yet, unless they happen to be conspiring to distort competition, dealers are likely to object to the fact that what appears to be free competition in the bidding is not really free at all. It is now standard practice in some auction houses to set a “reserve” on each work up for sale: if the bidding does not go beyond a certain price, the auctioneer simply pretends to accept a final bid and lets the work revert to the seller without his having to pay any commission to the house. Since other potential buyers have no idea of what the reserve is, they are at a tremendous disadvantage; the price has in a sense been rigged against a low price before the sale even begins. Of all the great auction houses, Parke-Bernet probably has the best record in keeping the bidding free, but the competition from abroad could well force it to change its ways. Recently Parke-Bernet began to permit sellers to buy back underbid works without paying a full commission. When it went after the Erickson collection, it had to compete with Sotheby’s guarantee that the auction would bring a certain amount. Parke-Bernet dislikes the whole idea of guarantees; it got the job only by cutting its own commission.

How Dealers Work. Auctions sketch in the main outlines of art’s price picture; it remains for dealers to shade in the details. The best dealers are men and women of experience and taste, heavily relied upon by the richest collectors—the Mellons, Morgans, Huntingtons, Fricks, Wideners and Kresses of the past, and the Rockefellers, Onassises, Fords, Lehmans and Chryslers of the present. History’s most famous dealer was Joseph Duveen, who before his death, in 1939, sold art to many of the major collectors of London, New York and Paris. It is said that Lord Duveen spent a fortune in tipping ships’ stewards to make sure that his deck chair would be put alongside that of the multiest of the multimillionaires on the passenger list. At one time, he is reputed to have had on salary a battalion of butlers who would duly report from the best homes of Britain and America any tips they might pick up on who might be ready to sell another heirloom. Duveen also had a wicked way of dealing with his competitors. Once, when a High Church duke asked him to take a look at a religious painting he was considering from the rival firm of Thomas Agnew & Sons, Duveen blandly said: “Very nice, my dear fellow, very nice. But I suppose you are aware that those cherubs are homo sexual.” As Duveen’s biographer S. N. Behrman tells it, the painting went back to Agnew’s forthwith.

The dealer today is less flamboyant, though in his own way no less dramatic. The dean of all dealers is the erudite Georges Wildenstein, who has never let the spotlight linger on himself for long. In 1956, the rival M. Knoedler & Co. sued the house of Wildenstein, alleging that someone had been tapping the wires of a Knoedler scout. Eventually the whole matter was dropped, and Wildenstein himself was apparently never involved. He would hardly need to use such tactics, for the one irreplaceable asset of his house is himself. A scholar in his own right, Wildenstein not only possesses an unerring eye, but also a memory that seems to have filed away an image of every first-rate painting that ever existed. Shortly before World War II, he bought an early 18th century portrait for about $30 in Paris because he remembered seeing an engraving of it many years before. It turned out that he was the only man in the city who knew that the portrait was by Watteau.

Handling Living Artists. The big houses such as Wildenstein, Duveen, Knoedler and Rosenberg have the experience and the capital to be able to hang on to a purchase for years, if necessary, until the market is ripe for selling. Smaller dealers, who more often handle the works of living artists, either place artists on a kind of salary in return for a certain number of pictures a year—the favored method in Europe—or take work on consignment and sell it for a straight one-third commission. The percentage is not as exorbitant as it sounds, for the business entails hidden costs. Manhattan’s avant-garde Dealer Leo Castelli, for instance, recently arranged a Jasper Johns show in Paris, even though all commissions went to Paris dealers.

“You might say,” explains Castelli, “that I acted in enlightened self-interest.” Such international shows can make prices go up, and eventually Castelli’s profits on Jasper Johns will more than make up for the $15,000 he sacrificed for the Paris show.

New York Dealer Martha Jackson pays Sculptress Louise Nevelson and Spanish Painter Antonio Tapies $20,000 a year in return for U.S. representation of their work. She also has an arrangement with three other galleries in Europe on behalf of a European abstractionist. Each dealer pays him $16,000 for the privilege of maintaining a monopoly on him. His minimum guarantee from the deal: $64,000 a year.

Even the best artists need dealers—and dealers need good art. The dealer always keeps his eye on the obituary columns: the death of a big collector can convulse the market by suddenly making available treasures that have been out of reach for years. The death of an artist can have even more interesting repercussions. Two years ago, Octogenarian Jacques Villon fractured his hip bone, and the rumor quickly spread that he was dying. Within 24 hours, his canvases disappeared from gallery walls all over Paris as dealer after dealer waited for Villon prices to skyrocket. The old man recovered, but as one Right Bank dealer sheepishly says of himself and his colleagues: “We are like a bunch of undertakers, keeping a death watch on the older artists.”

But out of New York’s 300-odd galleries (as compared with about 15 twenty years ago), only about a fourth are impeccable old-line dealers or fair and reliable outlets for living artists. Below—well below—them comes the host of vanity galleries, the new “rental” houses that will exhibit any artist if he pays from $700 to $1,000. They overcharge him for the catalogue, the publicity, the cooking sherry served in lieu of good cocktails at the opening. Some even go so far as to arrange a split with the framers, while others charge a fantastic 60% commission, which is nothing short of usury. These carpetbaggers have not only turned the New York art scene into a hopeless clutter, but they have tainted what should be one of the brightest pages in the history of U.S. art by flooding the market with mediocrity in the hope of a quick profit.

Going, Going—Up. Whether or not he has integrity, every dealer shares in the psychology of the rising market, and has a story to tell about it. About 1955, the year before Jackson Pollock died, Sidney Janis, onetime shirt manufacturer turned top Manhattan dealer, sold a Pollock to a collector for $2,500. “At the time, it was a good price,” says Janis, who almost always gets a good price. Last month the collector sold the painting for $120,000, then phoned to ask whether he might not have been smarter to have held onto it a bit longer. Says Janis acidly: “I told him I thought he had probably made enough on the painting.”

About 20 blocks uptown, in her gallery on Madison Avenue, Dealer Grace Borgenicht reports that in 1952 she bought a Max Ernst for $500, recently saw a similar but inferior Ernst go for $15,000 in London. Sculpture by De Rivera that went for $800 ten years ago would fetch more than 30 times as much today. Dealer Otto Gerson recalls a Cezanne watercolor that was sold for $1,500 before the war, is now worth about 20 times as much. Recently, Leo Castelli sold an oil on paper by Willem de Kooning for $10,000. He had bought it in 1951 for $250.

The Brand-Name Buyers. “People have read about these paintings going up tenfold and twentyfold,” says Grace Borgenicht. “So everybody is out to find the next Jackson Pollock.” Adds her colleague, Richard Sisson: “There is a large group of people who don’t really know anything but will buy anything they think is avant-garde.” “The art market today,” says Dealer Charles Alan, “is terribly unhealthy. People are buying not what they like, but what is fashionable. People are actually buying things because they are expensive. Sidney Janis raised prices enough to attract these people. He found that the brand-name buyers don’t trust anything that is not expensive.”

Paris dealers like to circulate the story of a customer who ordered two Matisses by phone. When the dealer asked whether the client would like to look at the paintings, the voice at the other end thundered, “When I buy 100 shares of Royal Dutch, I don’t go and look at the oil wells.” Manhattan’s Edith Halpert, whose Downtown Gallery deals exclusively with top American art, reports that a Texan once rushed up to her at a party, said he had been hearing great things about American art. and drawled, “Honey, I want you to make me up an American collection.” Other collectors—people who will settle for third-or fourth-rate paintings just so long as they carry the accepted signatures —are known as “stamp collectors” to the trade. A common saying among dealers: “He’s a collector with a very good ear.”

The Van Gogh Syndrome. The U.S. collector has long been a strange mixture of boldness and timidity. Half a century ago, he did not dare to venture beyond the safe and pleasant landscapes of the French Barbizon school. But once jolted, he was willing to take extraordinary risks, and he began buying up the French impressionists more avidly than even the French. Today, he is gambling as never before, not only on abstract art. which has doubled and tripled and quadrupled in price, but on everything from sculpture welded out of junk to paintings made of torn burlap.

U.S. museums—notably Manhattan’s Museum of Modern Art—have conditioned a whole generation to accept the avant-garde without the long period customarily allotted for the gestation of art. They exhibit new artists not only for their achievement, but also because of their promise. There seems to be, says Henry Geldzahler, a curatorial assistant at the Metropolitan Museum of Art, a fear “of passing someone up, of not discovering someone who should be discovered. It’s the Van Gogh syndrome. The museum directors are going to make sure that no ears are cut off in the 1960s.”

Art for Money’s Sake. There is no doubt that the general public today is better informed about art than any public before it. But unhappily, knowledge and taste—or even the desire for status —are not the only reasons for the present buying spree. What bothers most people in the field is that art has become a major form of investment, looked upon by many collectors exactly as a broker looks upon a portfolio of stock. Last week a new tip sheet appeared on the market full of exclamation points, red lettering and screaming capitals that are typical of the new commercialism. HOW TO MAKE SUPER-PROFITS IN THE ART MARKET NOW, it cried. “Your possible rewards are so unlimited that it might be more accurate to say that the risk you take is the risk of becoming RICH!”

U.S. tax laws add another twist to the buying of art. Great works donated to museums can be deducted as charitable contributions, and thus reduce tax bills by sums that may range as high as 91¢ per dollar on the value of the donation. (To get agreement on the value is a touchy negotiation, in which some dealers, siding with rich clients, tend to overappraise works of art, while skeptical Internal Revenue agents fight them down.) Furthermore, a legal loophole lets the donor “give” the work while yet keeping it for his own enjoyment until he dies. The beneficial effect of the law is to make great works gravitate to public museums, where everyone can enjoy them. Nonetheless, Dealer Alexandre Rosenberg, one of Manhattan’s big four (but no kin to the under-bidders on the Rembrandt), estimates that if the Internal Revenue Service ever ended this particular tax dodge, the art market would decline by 50%.

Just before the Parke-Bernet sale, the Manhattan dealer French & Co. put out a handsome brochure to seduce more collectors into this fascinating game with “that other avid collector, Uncle Sam.” French & Co. takes the case of a hypothetical Mr. Martin, a man in the 90% bracket, who bought a $30,000 painting some years ago and now finds it worth $70,000. Should he sell it? No, says French & Co. If he does, he will pay a 25% capital-gains tax on $40,000 and thus make himself a profit of only $30,000. Should he give it away to a museum? No, no, says French & Co. Though he will be able to deduct the entire $70,000 for a saving of $63,000 on his tax, his profit will still be only that saving minus the original cost, or $33,000. But if he sells the painting to a museum for the original $30,000, thus recovering his original investment, he can still deduct $40,000 for a tax saving of $36,000. Clever Mr. Martin’s profit is thus $3,000 more than if he had given the painting away.

Fakes & Fraud. More than ever, the high prices of the art market attract the ingenious faker. One standard way for a dealer to promote an artist is to get a book written about him, but there has been at least one case in which a book contained nothing but fakes, all reproduced in glorious color. No U.S. law protects a buyer who finds himself with a fake, and the legitimate dealers are forced to watch in silence out of fear of being sued for libel. Says a top international dealer: “Millions and millions are spent on fakes by the public each year. In the last few years, a large number of Matisse fakes have appeared, some of which have been traced to a workshop in Japan.” To compound the problem, some museums knowingly try to get rid of their fakes by selling them to the public.

In selling a work, the reputable dealer is, in effect, staking his reputation on his belief that the work is authentic. But the client can seek as many opinions as he wants, and if still not satisfied, he can send his purchase back. The auction houses, on the other hand, while doing their knowledgeable best to avoid selling fakes, offer no guarantee. “Messrs. Sotheby’s make no warranty whatever,” says Sotheby’s conditions of sale. The nearest they come to guaranteeing a work is to use a time-honored code. Sample: a painting that the catalogue declares is by “Peter Paul Rubens” is considered to be genuine. A “P. P. Rubens” is probably a Rubens; a plain “Rubens” is a maybe, while a “School of Rubens” may be anything at all.

Caveat Emptor. Essentially, the ruling force in any economic field is the law of supply and demand, but taste brings a vast imponderable into the art market. It is the public taste that keeps the price of the impressionists going up and up. It was taste that caused one man, at the beginning of the century, to pay 800,000 gold francs (about $1,000,000 in purchasing power today) for a Millet that would not fetch more than $20,000 today. Taste dictated that, in 1890, London’s National Gallery should pay £1,312 for a Tintoretto, while paying eight times as much for Sir Edwin Landseer’s postcardy Monarch of the Glen. Most U.S. artists are currently going up; but Thomas Benton, John Curry and Grant Wood are going down. Taste lavished riches upon Gainsborough and Turner, turned its back on them, is now restoring them to favor.

But beyond supply and demand and the dictates of taste, there has crept into the current art market a get-rich-quick psychology never known before. As far as the old masters are concerned, Duveen’s credo still holds true: “When you pay high for the priceless, you’re getting it cheap.” But for an unwholesomely large slice of the rest of the market, the only fitting motto is: “Let the buyer beware.” In a wry bit of hyperbole, John Walker, director of Washington’s National Gallery, points out the fallacy of regarding purely as investment the ineffable delights of art. If the 1653 purchase price of Aristotle Contemplating the Bust of Homer (an estimated $7,800) had been invested at compound interest of 4% annually, notes Walker, the principal would now amount to about $1,020,000,000 more than the Metropolitan paid for it last week.