Fine Art, The Finest Investment

Combining Business with pleasure: The Financial Rewards of Connoisseurship

Newspaper Editors seldom allot front-page space to art—and more's the pity. But art made headlines throughout the world not long ago, when the great Erickson collection of old masters was sold at auction in New York City. Among the 24 paintings that had been collected by the late advertising magnate Alfred W. Erickson, and that had been ordered sold by the executors of his widow's estate, were: one major and two lesser Rembrandts, a Fragonard, a Crivelli, and works by Holbein the Younger, Vandyke, Cranach the Elder and Terborch.

The major Rembrandt, Aristotle Contemplating the Bust of Homer, and Fragonard's La Liseuse were exceptionally choice items over which any collector's or museum curator's mouth would water. It was generally conceded that the paintings would fetch record prices, and for weeks before the sale the entire art world buzzed with speculation about the sums likely to be involved and who the highest bidders would be. Top presale estimates were $1,800,000 for the Rembrandt and $350,000 for the Fragonard.

Actually, the amounts bid and paid at the auction were far greater than those predicted by even the most educated estimators. Aristotle Contemplating the Bust of Homer, the only important Rembrandt not then in a museum, was purchased by New York's Metropolitan Museum of Art, which paid a resounding $2,300,000 for it. This price was the highest ever paid for a single painting, twice the previous record $1,166,400 Andrew Mellon paid the Soviet Government in 1931 to get Raphael's Alba Madonna out of the U. S. S. R. and into the National Gallery in Washington.

Fragonard's La Liseuse brought $875,000 and was purchased for the National Gallery. This represented the second highest price paid for a picture at an art auction since 1959, when Rubens' Adoration of the Magi was sold for $770,000. Incidentally, I attended that sale, going to $560,000 before dropping out of the bidding.

The point of all this is simply that the art market is booming, and that fine art is a fine—and possibly the finest—investment in more ways than one. But then, art has long been a fine investment.

Alfred Erickson purchased Aristotle Contemplating the Bust of Homer from Duveen Brothers in 1928, when he paid $750,000 for it. During the depths of the Depression, he sold it back to the Duveens for $500,000 and then, in 1936, bought it again for $590,000. Simple arithmetic shows that he paid a total of $840,000 for the picture—and that the difference between this over-all purchase price and the most recent sale price is $1,460,000.

True, on the face of it, it appears that Erickson took a one-third loss between the time he first bought the painting and sold it back to Duveens'. But this must be viewed in light of the general economic conditions prevailing at the respective times involved. Alfred Erickson first bought in 1928, a peak-prosperity year. He sold when the Depression was approaching its lowest lows.

To obtain a proper perspective, it is necessary to remember what happened to business and all forms of investment during corresponding periods. Stocks plummeted, even such bluest of blue chips as U. S.. Steel, which fell from a peak 261-3/4 to 21-1/4. In 1932, U.S. industry was operating at well below 50 percent of the maximum levels it had reached before the 1929 crash. Wages paid out in 1932 were 60 percent less than in 1929; dividends paid by companies still able to pay dividends were 57 percent less. Considered against this background, Erickson's temporary 33-1/3-percent loss on his painting would seem strong verification, indeed, of my contention that art is a fine investment.

Don't misunderstand me. Being a collector myself, I would be the last person in the world to suggest that Alfred W. Erickson bought—or that any serious collector buys—works of art for the purpose of realizing a financial profit on their subsequent sale. I'm only too well aware that art collectors are just that, and not art dealers.

Aline B. Saarinen, analyzing the motives of great American art collectors, writes: "Their overpowering common denominator is this: For each of them, the collecting of art was a primary means of expression."

Jacques Lipchitz, the sculptor, who owns one of the world's finest collections of primitive art, says, "Collecting is for learning about the human being and the way he feels and expresses himself, and about the material he uses to express himself and the way he uses the material."

I find nothing exceptionable in these opinions, but my own views go a step or two further. Like most serious collectors, I by no means consider the works of art I own as inanimate ornamental possessions. To me, they are vital embodiments of their creators. They mirror the hopes and frustrations of those who created them—and the times and places in which they were created.

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Although the artists may be long dead, and even the civilizations in which they worked long since disintegrated, their art lives on.

The interest and pleasure an individual takes in his collection does not stem from the monetary value of the works of art he owns. They derive from the enduring beauty of the art and from a realization of the validity and permanence of the fundamental values that art represents. The collector takes pleasure in the beauty of art, and he never really ceases to be stimulated by it.

The 16th Century Italian poet Federico da Porto admitted he was "stupefied and overwhelmed" by what he saw when he visited the magnificent collection of the Venetian statesman-historian Marino Sanudo. Da Porto's poem marking the visit indicates that collectors of the 1500s were no different from those of today—and that he, himself, was infected by the sense of exhilaration and gratification that Sanudo obviously possessed in no less measure than do his modern-day collector counterparts. Wrote Da Porto:

Then up the stairs you lead us, and we find

A spacious corridor before us spread, As if it were another ocean full Of rarest things; the wall invisible With glorious pictures hid—no blank appears,

But various figures, men of every guise;

A thousand unaccustomed scenes we see.

Here Spain, there Greece, and here the apparel fair

Of France.

It is of such stuff that collections—and collectors—are made. The collector marvels at the wonders of the art he owns—and he displays his possessions proudly, sharing their beauty with others. Certainly, his principal concern is not with the pecuniary value of his works of art—although collectors will often stretch and even wreck their budgets to obtain an object they desire.

Nonetheless, it remains an undeniable fact that fine art is a fine investment. The dollars-and-cents values of paintings, sculptures, tapestries, fine antique furniture and virtually all forms of art have shown a marked tendency to rise—and even soar—over the years. Much of this, of course, is due to the increased—and still increasing—awareness that art represents basic values that are not only lasting, but that become more valid as time goes on. Thus, there is competition to secure works of art—and thus their monetary value, the price people are willing to pay for them, rises.

The trend has not been limited to art of any particular school, style, period or medium. A few examples taken at random should suffice to illustrate the manner in which the money values of art have spiraled.

In 1885, the Victoria and Albert Museum of London bought more than 1000 drawings by the 18th Century Italian master Giovanni Battista Tiepolo. Although Tiepolo's breath-taking frescoes adorned the Labia Palace in Venice, the Kaiseraal of the Prince-Bishop's House in Wurzburg, Germany, the throne room of Spain's King Charles III and dozens of other great homes, churches and public buildings, his drawings were not then in vogue. The Victoria and Albert Museum paid about ten cents apiece for them. Today, each drawing would bring at least $1500—if the museum wanted to sell them, which, of course, it has no intention of doing.

The 19th Century English master Joseph M. W. Turner produced many fine water-color paintings during his long and successful career. In the 1940s, these sold for between $500 and $1000 apiece. At the present time, a large Turner water color will fetch anywhere up to $25,000.

Paul Gauguin's Te Tiai Nei Au I Te Rata—"I Await the Letter"—is said to have once sold for less than $50. At an auction in 1959, the painting realized more than $300,000. In that same year, one of Braque's early works—which had once been sold at auction for $15—was eagerly snapped up by the Queensland Art Gallery at a price of $155,000. Also in 1959, an illuminated manuscript prepared under the direction of Matthew Paris at St. Albans Abbey about 1250 A.D. sold for $190,000—as against the $115,000 paid for a comparable manuscript not very long before.

Such a list could be extended almost indefinitely and expanded to include practically every medium, period and school of art, from prehistoric figurines to contemporary works by abstract expressionists, action painters and representatives of the welding-torch school of sculpture—and most certainly such things as tapestries, carpets and fine antique furniture.

I have seen the money value of the works of art I've purchased increase and even multiply several times during the years since I acquired them.

In 1938, I purchased the historic and almost legendary Ardebil Persian carpet, which had been made on the royal looms of Tabriz in 1535. Moslem Persians had considered this fabulous, 11-by-24-foot carpet so beautiful that they had said it was "too good for Christian eyes to gaze upon." But "Christian eyes" had often "gazed upon" the Ardebil carpet and had marveled at what they saw.

"It is worth all the pictures ever painted," the American artist James Whistler declared after seeing the Ardebil. The carpet, a symphony of glowing colors executed with unsurpassed artistry and fantastic in its detail, is generally acknowledged to be one of the two finest carpets in the Western world.

The Ardebil sold for $27,000 in 1910. Nine years later, it was purchased by the famous art expert—dealer Lord Duveen, who paid $57,000 for it. I bought the carpet from Lord Duveen in 1938, paying him $68,000. I subsequently received many offers for the Ardebil, including one of $250,000 from Egypt's then-King Farouk. I declined his offer along with all the others. In 1958, the Los Angeles County Museum—to which I had donated the carpet—placed its value at $1,000,000, almost 40 times the price for which it had been sold in 1910 and nearly 15 times what I had paid for it.

In the same year that I bought the Ardebil carpet, I also acquired the fine Rembrandt portrait of Marten Looten, which the great Dutch master had painted in 1632. I paid $65,000 for the picture and considered it a bargain, for I had been quite prepared to go as high as $100,000 to obtain it.

The market value of the painting increased fantastically through the years. How much it would fetch at a sale today is a purely academic question, for the portrait was also donated to the Los Angeles County Museum. However, the record $2,300,000 paid for Rembrandt's Aristotle Contemplating the Bust of Homer would seem to indicate that Marten Looten would bring a price many times greater than what I paid for it.

(Editor's Note: In addition to the million-dollar Ardebil carpet and Rembrandt's Marten Looten, J. Paul Getty has donated other extremely valuable pieces of fine art to the Los Angeles County Museum. Incidentally, he derived no tax benefits for himself by making the gifts to the institution.

(He still has a multimillion-dollar collection, but even a large part of this has gone into the J. Paul Getty Foundation. The collection includes Boucher tapestries, rare carpets and a collection of French 18th Century furniture which Sir James Mann, director of the Wallace Collection and an outstanding authority on the subject, has judged to be finer than the one owned by the Louvre. There are also Fourth and Fifth Century, B.C., Greek marbles—including some of the famed Elgin marbles—terra cottas, bronzes, Roman portraits and sculptures and the renowned Lansdowne Hercules. Among the paintings are works by Titian, Lotto, Tintoretto, Rubens, Gainsborough and other masters.

(All the items are sumptuously housed and displayed in Getty's own magnificent Ranch-Museum on the Pacific Coast Highway in Malibu, California. The museum is open to the public without charge.)

But one does not have to buy the works of acknowledged old masters to obtain fine works of art—or, for that matter, to make excellent investments.

For example, the Spanish artist Joaquin Sorolla y Bastida lived from 1863 to 1923. In 1933, I attended an art sale in New York City, saw some of his work and thought it excellent. I bought ten of Sorolla y Bastida's paintings for a total of well under $10,000. By 1938, the world had begun to really appreciate the artist's talent, and the ten paintings had risen in value to a total of $40,000. Today, Joaquin Sorolla y Bastida is ranked among the top 20 Spanish painters of all time—and I hesitate to guess what the ten paintings I bought in 1933 would bring if placed on sale.

Nor is it even necessary to spend thousands—or even many hundreds—of dollars to start and build an art collection that will almost certainly increase in value in years to come. There are—and always have been—many opportunities to obtain real bargains in art.

I might add that, in some remote corner of every art collector's heart, there always lurks a secret hope of making a discovery, of picking up a painting at a bargain price and then learning it is really the long-lost work of some great master. This does happen on occasion. I know, for it happened to me.

About 25 years ago, I attended an art sale at Sotheby's in London. Among the objects on sale was a rather battered Italian painting of a madonna—a work, the Sotheby experts declared, produced by some unknown artist. Although the madonna was badly begrimed and in a poor state of preservation, I liked the picture; it was, I thought, reminiscent of Raphael. I bought it—for $112.

Only last year, I decided to have the painting cleaned. The job was entrusted to the famous firm of restorers, Thomas Agnew & Sons. Representatives of the firm soon called me excitedly. The painting was, indeed, the work of Raphael, they said—and this was quickly authenticated by such leading art experts as Alfred Scharf. The painting I purchased for $112 has proved to be Raphael's Madonna di Loreto, painted in 1510. Its real value: upwards of a million dollars!

I'll grant there isn't much likelihood that the average art buyer will pick up a $300,000 Gauguin, a $155,000 Braque or even a $1500 Tiepolo for pennies in a corner junk shop. On the other hand, such remarkable finds as a London art critic's recent discovery in a Dublin shed of five soot-blackened canvases which proved to be important Guardi figure compositions serve to keep all art buyers' hopes high.

Certainly, it is often possible to buy good, reasonably priced works by lesser artists, particularly in out-of-the-way art stores, antique shops, and even secondhand bookstores, which are frequently excellent places to pick up prints and etchings. Then, of course, one can shop very advantageously for the works of talented young artists who have not yet arrived, but who show promise. It should hardly be necessary to point out that an artist does not yet have to be established for his work to be good and have lasting value.

Even people with very slender budgets can acquire works of art that will prove excellent investments in beauty, pleasure—and also in the financial sense. I know many individuals who have paid modest prices for works of art and have then seen the market value of their purchases spiral upward.

The experiences of a journalist friend of mine provide a trenchant four-in-one example of what an individual with a little common sense and taste can do. This journalist travels extensively to New York, London, Paris and Venice. By no means an art expert and far from rich, he likes to browse—and occasionally buy—in art, antique and secondhand bookstores. His tastes run quite a gamut; he buys things that please him and satisfy him aesthetically, regardless of whether they are ancient or ultramodern. But he shops carefully—and the collection for which he paid about $2000 over the last six years already has a market value of at least $8000.

Typical of his successful investments are these four purchases, each made in a different one of the four cities he visits regularly: Six years ago, he bought three water colors by a young Greenwich Village artist, paying a total of $140 for all three. They now have a sale value of $125 apiece. During 1957, my friend was in London, where he found a set of six small, neatly framed 19th Century gouaches which he bought for 17 guineas—$51—and for which he was recently offered $250. In 1958, while visiting Paris, he purchased eight early 19th Century prints for the equivalent of $24; two years later, an American dealer offered $150 for the set. Only last year in Venice, my journalist friend saw—and liked—two paintings by the young Italian artist Fioravante Seibezzi and bought them for 30,000 lire—about $50—apiece. Shortly thereafter, Seibezzi had a one-man show that drew critical raves, and the market value of the paintings jumped 300 percent—and is still going up.

My friend has rejected all offers for his acquisitions. Although he is convinced their market values will continue to rise, this is not his reason for refusing to sell. He has the instincts of the true art-loving collector.

"I bought them because I wanted to own them," he explains. "I like them all far too much to sell them for any price anyone is likely to offer."

This astute art investor's experiences serve to underscore the fact that many tourists and people who travel on business often overlook chances to invest wisely in fine art during their travels.

They have a habit of shopping for gaudy and frequently costly souvenirs that have little or no value. They fail to realize they could acquire objects of considerable beauty—and of considerable and permanent value—without expending any more effort or money than they spend in buying the trivial.

One man I know served in Japan and Korea with the United States Army. Mildly interested in Oriental art, he used some of his off-duty time looking for a few good pieces to take home. Shunning the main-street stores and tourist-trap bazaars, he poked about in out-of-the-way shops and market places. Spending a total of less than $300, he acquired several pieces for which a San Francisco dealer later offered him $1500.

Another man I know took his wife to Turkey on a holiday in 1956. Instead of buying the tawdry wares traditionally hawked to tourists in many Mediterranean countries, they did their shopping carefully and off the beaten track. They bought some ancient metal castings, figurines and carvings, paying about $650 in all for them. Experts who appraised the items when the couple returned to the United States that same year fixed their immediate sale value at $1400. In the ensuing five years, various factors served to increase this value. By 1961, the art objects for which the couple had paid $650 were worth $2000.

Now, none of these people are art experts. Their knowledge of art is limited to what they have picked up on their own by reading, visiting galleries and exhibitions and browsing in art and antique shops. To them, art collecting is simply a very pleasant extracurricular interest, a hobby if you prefer. They enjoy having objects around them that they consider aesthetically satisfying. They find it makes their lives more pleasurable.

The fundamentals of art collecting are not difficult to master. Obviously, the average person is not financially able to go on a shopping spree for Rembrandts, Fragonards, Gauguins or other paintings that—when and if available—run into the hundreds of thousands or even millions of dollars.

But even the individual who has only a very few hundred dollars to spend can buy good works of art—objects that are of high quality and that will retain or increase their value.

It stands to reason that the safest way to buy art is to employ an expert to do the buying—or to buy only in the most reputable galleries. But, by so doing, one will be paying the peak current market prices. Also, most people do not have the budgets to buy on the scale such purchasing implies—and many people would rather savor the adventure of shopping for works of art on their own.

However he does it, to buy art wisely, an individual must first make up his mind about what mediums and periods please him the most. He should then learn something—the more the better—about them. There are copies and counterfeits galore on the market—and the only way to distinguish between them and the genuine is by knowing which is which. (Reputable dealers will, of course, almost always permit the prospective buyer the right to have a piece authenticated, or will provide authoritative authentication themselves.)

What to buy? This depends on two factors. The first is the individual's taste—and, if he is to buy wisely, it must be assumed that he has fairly good taste. The second factor is the individual's wallet. Whatever the price range he can afford, the art collector must always strive to buy the best he can within that range. One good item is worth a dozen—or even a hundred—bad ones.

On the one hand, the collector must always remember that artistic value does not necessarily follow the value set by the market place, or vice versa. On the other hand, a collector can appreciate art and revel in its beauty, yet he is entirely justified in wanting to invest his money wisely. It is just as foolish to throw good money away on bad art as it is to throw good money away on anything bad—and only a fool would knowingly overpay for whatever he buys.

Then, to determine whether one really likes a work of art enough to buy it, there is no better rule-of-thumb test than that provided by the classic question he should ask himself: "Can I live with it?" The individual who owns a piece—be it a painting, marble bust, French Renaissance escritoire or whatever—will have to look at it often and long. If he believes an object he contemplates buying will continue to please him over a period of time, then—all other things being equal—he should buy it. If not, he should look for something else. "I buy the things I like—and like the things I buy," is the true collector's guiding philosophy.

Once he has made his purchase, it is up to the individual to decide what he wants to do with it. He has two choices: He can hold it until there is a rise in its market value, sell it and pocket his profit. Or he can keep what he has bought and enjoy it, holding onto it no matter how high the market value goes. If he does this, he can be satisfied that he has invested wisely, for he owns something that has lasting artistic value and pays him regular dividends in pleasure even while it unobtrusively continues to increase in monetary value.

Either way, buying fine art can be the finest and most satisfying of all investments. And the sooner one starts investing in art, the sooner he will start to reap all its manifold rewards.