Part II- Autograph Auctions-Caveat Emptor (Buyer Beware)

"If we turn our back on a fire (problem)and our backside gets singed we will soon learn that we have to sit on the blisters."-------Abraham Lincoln

"They say the acquisitive desire, strong in a magpie and even stronger in a human, is nothing more than a savage instinct, an uncontrolled desire to seize upon a treasure and hoard it away."----Charles Hamilton in Auction Madness*

Charles Hamilton* wrote extensively about dishonesty and collusion in autograph auctions 30 years ago and most of today's collectors are well aware, based on their own experience, that any such auction may be a dicey place to do business. But dishonest auction practices are not restricted to autograph auctions.For example, note the recent reports that certain of the great New York auction houses were convicted for collusion and price fixing in some of their art auctions. Because of these and other widely reported abuses it is a wonder that either various consumer protection groups or the government have not demanded that auctions in general be reformed. For those of you familiar with the argot of flying, many auction bidders might as well be bidding in a Link Trainer (flying blind) because most auctions are not audited to ensure, among other things, that all bids were legitimate and were submitted in competition with other bidders and not after the auction . Most auctions even more than the bourses, then, are in part what remains of the 'Wild West' in American commerce.

Let us turn now the intrinsic problems in of today's autograph auction market (other than ebay auctions).The following are major concerns:

• The results are not audited by an independent auditing firm. Anyone who participates in an auction that has no real transparency does so at their own risk and, in many instances ,at great risk to their money.
• There is evidence that some auction houses buy in a consignment at the minimum bid while disregarding other bids and then they resubmit the item at a later auction to realize a profit to the disadvantage of the original consignor. We have heard this story so many times from clients there must be some merit in it. One client said that when he saw his material FOR WHICH HE HAD RECEIVED RESERVE BIDS MINUS SELLERS PREMIUM reappear at the same auction house in a later auction BUT AT HIGHER RESERVES, he sent his Dad, a retired NYC policeman, to the auction house with evidence in hand where, needless to say, his Dad extracted a settlement.
• One of the most disconcerting auction practices is the 10 or 15 or whatever minute rule that allows open-ended bidding into the wee hours. This is a distinct disadvantage to high bidders and there is ample proof it is a sham and isn't followed in any event. An auction should begin at a stated time and end at a stated time and a bidder should know their status when the auction closes. Bidding at auction should not be an endurance test. This rule is the bane of bidders and opens the auction up to unlimited abuses. We have never seen a justification of this nonsense by any auctioneer.
• Favored clients (big buyers/consignors) have the opportunity to buy after the auction at a dollar more than the high bid recorded during the auction-this actually happened to us in association with a colleague who cannot be identified for obvious reasons. This after auction bidding was common practice at certain private auctions in the past.
• In the New York autograph auctions it is well known that some dealers collude to 'divide up the spoils' agreeing not to bid against one another on certain pieces. This pattern of bidding is well know to the auction houses and they do nothing about it.
• Large dealers collude with certain auction houses to have a piece falsely bid up to a high price and it is recorded as a sales price when no sale occurred. Months later the dealer may offer the piece for sale using the bogus sale price as the benchmark for their new asking price while pointing out to their clients that "a piece just like this sold for X at auction recently".
• The issue of authentication at auctions is a bigger morass than most buyers realize. Some of the auction houses actually have the effrontery to tell you in advance they are relying solely on their 'authenticators' and that , in so many words, just try to get your money back if what you purchased is a forgery or was misrepresented. The following is a recent 'authentication' episode:

{ A very important presidential piece was offered at a major Americana auction. The piece was framed. The LOA was by one of the most well know names in the field. The problem was, this piece had involvement by someone who has been associated with the ability to produce very good 'copies' (a free between-the-lines reader is available from us if needed) of the same president. The 'authenticator' was asked if the item had been examined out of the frame considering the reputation of those involved. The answer was "no". So here you have a top individual in the field authenticating an important historical item that was never properly examined. That violates one of the most important criteria for authenticating an autograph or manuscript i.e. that the item be given a direct examination,not while framed, including an examination under high power and an examination of both sides of the document with transillumination to detect tell tale watermarks. }

And the above reflects just part of the problem with authentication by autograph auctions. The multiple errors and shortcomings of the established authentication services that some auctions use has been dealt with previously on this site --link above.But some of the authenticators at auctions are even less qualified than some of the better known 'authentication services'. For example, there is a collectibles auction house that uses a 20-some year old 'expert' with no bona fides in the field as their 'authenticator". Furthermore, the more gradiose the name under which hese charaltans operate the less likely there is underlying expertise or, as they say in Texas," the bigger the hat the fewer the cattle."

The foregoing may be a less than complete detailing of the snares autographist-bidders may encounter in auctions but at least it is a beginning attempt to put our clients on guard and educate them. Our approach to the problems in this market has been three fold.

First we have attempted to warn and educate our clients.

Second we offer the following practical suggestions:Be certain to read the conditions and terms of any auction before bidding. You will be surprised what you learn.Their terms often contain what Churchill referred to as "terminologocal inexactitudes" so if these conditions are not clear or satisfactory, call the auction house for either a clarification or to effect the change you want with respect to yourself and get the agreement with you in writing.Read the catalog carefully and if there is an item of interest call your dealer and have him or her look at the item and give an opinion as to the likelihood of its authenticity. Also do not hesitate to call the auction house to discuss the item. You maybe surprised at what you find as happened recently when an auctioneer admitted that there was a major authenticity questions about a Presidential White House Card and a very famous Western outlaw item in their auction. Both pieces were auctioned despite that : one brought several thousand dollars.If there is an individual listed as an authenticator, call them and ask them to what extent the item of interest was examined-(cf. episode mentioned previously of the presidential item having been 'authenticated' in the frame).Make certain that you have established the terms under which matters of authenticity will be resolved-and get it in writing. You want auction house that stand behind their merchandise and not behind 'authenticators.'

Third, we have encouraged auction houses to adopt higher standards and to start providing bidders with audited results on their auctions. Here we could use pressure from collectors. There is a good reason some autograph auctions as run by their satrap owners are conducted as they are---that is, BECAUSE CONSUMERS TOLERATE IT and because it is not in the interest of the auction houses to change unless forced to do so. Among the auction houses we have contacted there is only one company, The Written Word Autographs led by Dan Rowe, who have agreed in writing to hold an auction that abides by the stated rules, that begins and ends at the proscribed time and that will provided an independently audited report on the auction. This auction, the second one of which will be held on October 6, 2007 should be supported by everyone interested in raising standards of integrity in this field.

Now, the matter of ebay auctions. Anyone who knows the first thing about this field knows that ebay often is an even more dangerous place to buy autographs than the private auctions. There are no clear statistics as to how many ebay autographs are bogus but the percentage is high. Nonetheless, if you are careful, you occasionally find a legitimate good deal but finding one these days is very time consuming. The dealers you might be willing to buy from anyway and who also sell on ebay do not offer bargains: they know the value of what they have. And fewer and fewer good dealers are selling on ebay because prices have been so weak. One special piece of advice-stay away from ebay PRIVATE AUCTIONS. If you accept that transparency is a problem throughout the auction industry nowhere is it more so than in PRIVATE ebay auctions. There is not a single circumstance under which an item should be bid on in this type of auction-none. If you see PRIVATE AUCTION or sellers with PRIVATE FEEDBACK, paint your backside white and run with the antelopes. Finally, most legitimate dealers ask sellers the source of what they want to sell. Under most circumstances, if that source was ebay, a dealer would not want to buy and later sell such an item.So buyers of ebay autographs often are buried in their acquisitions.

In closing, autograph auction abuses have a long history and, as mentioned previously, were outlined in great detail back in 1981 by Charles Hamilton in his book Auction Madness. In fact he has a glossary at the end of his book that uses different and somewhat more colorful terminology to describe many of the abusive practices outlined herein-or, as he wrote, "what goes on behind the velvet curtain." The book is well worth reading but somewhat discouraging to those who tilt at windmills hoping that the "better angels of our nature" will someday preveail and that the autograph auction market will be conducted with more integrity than it is today in some instances. You read CH's book from 1981 and you realize not much has changed. As an industry, we can do better.

*Reference:Auction Madness by Charles Hamilton, Everet House, New York, NY, 1981. In this book, Hamilton was urging reform but toward the end of his career years later he was accused of the same unethical practices he had decried.