BusinessWeek Investor: Collecting
Want to Buy a Piece of History?
The Net has made document-collecting easier
What hooked William Steiner was a Sotheby's auction 12 years ago of Albert Einstein letters. The chairman of Dryclean USA, a Miami dry-cleaning gear and franchise company, wound up buying two letters for $2,800 apiece. He has since built an eclectic collection of some 1,500 documents. "I realized I could own things signed by people I regard as the heroes and villains of history," says Steiner. "I just kept getting in deeper and deeper."
Steiner has company. Historical documents have shaken off some of their musty image with the emergence of celebrity collectors such as Bill Gates. And some segments of the market, such as early Americana and Civil War documents, are jumping (table). Steiner, for example, last year sold a July 1, 1776 letter from John Adams about the Declaration of Independence. The sale price: $635,000. Meanwhile, Web auction sites have brought a flood of new material and opened the hobby to a new audience. "Before eBay, most people just didn't know you could buy a letter by someone like Harry Truman for a few hundred dollars," says Chicago collector James Berland.
But the hobby can be fraught with peril. Mechanical pens and the practice of secretaries signing letters mean that signatures on many 20th century documents are not authentic. "We just assume that after 1965, anyone who could afford to use an auto-pen used one," says Kenneth Rendell, a dealer in Boston and author of Forging History: The Detection of Fake Letters & Documents (University of Oklahoma Press, $24.95).
Sports, rock 'n' roll, and Hollywood memorabilia are so rife with fakes that many experts recommend collecting only such documents as contracts, which are relatively easy to verify. And it's far from certain that a document will gain value. For every Jane Austen, whose surge in popularity has caused prices for her letters to spike, there's a William Makepeace Thackeray, whose prices have barely budged since 1900, says Polly Beauwin at leading London dealer Maggs Bros.
How can a novice avoid the pitfalls? The best insurance is to buy from reputable dealers or auction houses such as Sotheby's or Christie's. Top dealers tend to belong to professional groups such as the Professional Autograph Dealers Assn., which publish membership lists and codes of ethics on their Web sites (table). Good dealers also give references and guarantee refunds on items that come into question, even years after a sale.
The next step: Focus. "Pick a subject you love," says Nathan Myhrvold, who's on sabbatical from his post as Microsoft's chief technology officer. A science buff, Myhrvold is delighted with a trove of letters by British paleontologists he recently acquired. They discuss the Piltdown man, a supposed new species of human discovered in 1912 that proved to be a hoax. Collectors' magazines, such as Pen & Quill, can spark ideas. Collectors also peruse dealer catalogs and monitor auction sales. Ernest Hemingway buffs already are salivating over a May 19 Christie's auction in New York of newly uncovered documents by the author.
In the old days, the signature was the most valuable element of many documents--so much so that signatures were regularly excised and the letters thrown away. But these days, value depends heavily on the historical importance of the contents, as shown by the nosebleed price fetched by the Adams letter. Still, you can start a collection on a budget. A less significant Adams document might sell for $4,000. And certain segments of the market, such as documents from World War II, are fairly inexpensive. Claude Harkins, a collector in suburban Kansas City, Mo., thinks World War II soldiers' letters home are a great value because they can be had for $5 to $10 each, and demand for them seems likely to grow. Similar letters from the Civil War go for $200 to $2,000, up from $1 apiece 15 years ago.
The Net is a good place to look for inexpensive documents, in part because dealers use the Web to sell items that aren't worth putting in catalogs. Jim Smith, owner of Remember When Auctions in Wells, Me., recently sold on eBay a short note signed by the late Supreme Court Chief Justice Earl Warren for just $36.
Dealers claim it's not hard to root out fakes if you scrutinize documents carefully. In Forging History, Rendell says crooks tend to make obvious errors. He cites a note purportedly signed by Einstein done on an IBM Selectric, a machine introduced in 1961, six years after the physicist's death. There are less obvious giveaways, too. Machine-made signatures, for example, don't leave an indentation in the paper, as real ones do. Of course, you may not be able to do these checks when buying on the Net. And tons of material of doubtful authenticity have been pouring onto Web sites. So it's best to buy only from the online arms of established dealers and auction houses. Sothebys.com and sothebys.amazon.com guarantee the authenticity of what they sell and offer refunds if a document proves to be a fake. Many prominent dealers also are now doing land-office business on eBay or via their own sites.
Most serious collectors worry far more about finding key items to fill out their collections than they do about fakes. Some search for years for, say, an ultrarare Button Gwinnett to fill out their collections of signers of the Declaration of Independence. For Steiner, the Holy Grail would be a Mozart letter or musical manuscript, now almost impossible to find. But even for those of more modest means, this is one field of collecting where you can say proudly that you're holding a bit of history in your hand.By Thane PetersonReturn to top