In an otherwise pointlessly speculative attempt to connect hedge fund practices with the top end of the art market, a spurious connection that retails the mistaken idea that there is no regulation in the auction market (a falsehood that never seems to die), Tom Flynn offers a story of the first auction guarantee. You’ll have to take Mr. Flynn’s word for whether this is actually the first time a guarantee was offered but the story has the ring of truth to it:
In 1956, Sotheby’s were trying to persuade a retired naval officer to consign Poussin’s Adoration of the Shepherds (above) to its London auction block. The vendor, the Norfolk-based aristocrat Jocelyn Beauchamp, eventually allowed Sotheby’s director Vere Pilkington to take the rolled-up canvas back to London.
Shortly afterwards, Beauchamp was approached by a London dealer who offered him £10,000 cash for the picture (the offer was raised to £15,000 a few days later). Furious at the trade’s attempt to scupper their instructions, Sotheby’s chairman Peter Wilson offered Beauchamp a guaranteed sum. That was the first time a guarantee had ever been offered by an auctioneer to a vendor.
The painting, which had once been in the collection of Sir Joshua Reynolds, was eventually sold for £29,000 to London and New York dealer David Koetser. Guarantees (and more recently so-called ‘irrevocable bids’) are now a fixture of Sotheby’s and Christie’s high-ticket auctions but the precise details of the cake-cutting are never divulged.