Jay Gatsby worshiped good taste in clothes, women, even swimming pools. But, he was gunned down. F. Scott Fitzgerald, author of the Great Gatsby, fulfilled his theme that good taste ain’t enough. Gatsby‘s life was a romantic fallacy. Hemingway responded, “the rich weren’t different from you or me, they just had more money.”
I read Hemingway and Fitzgerald in my late teens, a poor boy from the Bronx, attending City College. My three-piece gray flannel suit got me through college with a white button down shirt, a red knitted tie.
My buddies were painters, artists without galleries, living and working in $40-a-month walk ups, lower East Side of Manhattan.
Early fifties, New York was the art capital of the world for the Abstract Expressionism movement taking prominence. I’m talking about Mark Rothko, Jackson Pollock, Willem de Kooning. Later, Francis Bacon, and Roy Lichtenstein.
The going rate for their canvases was around $1,200. But, who could come up with such money then? David Rockefeller and Peggy Guggenheim. I bought pieces from my friends at the going rate, $300 apiece. You paid out $25 a month for a year.
Betty Parsons begged me to buy a couple of Rothko’s majestic canvases of color field work. But, just back from the Korean War, I stood penniless and unemployable-no skills. Rockefeller and Peggy were taken in hand by Alfred Barr, head of MOMA. When you’re in Venice visit, Peggy’s museum filled with Jackson Pollock's drip paintings.
In the sixties, then renting space in David Rockefeller’s building, 1 Chase Manhattan Plaza, I had his permission to stroll through his floor there and view his collection. His staff giggled over such “crazy” paintings, which later registered in the 9 figures range.
Early sixties, I had graduated to Wall Street as a player. My speed was $1,200 for a canvas and it bought a lot. Decades later, when I looked at Sotheby’s replacement value estimates, I noted my pieces bought 50 to 60 years ago for peanuts like Soulages. Frank Auerbach. Georg Baselitz. Marc Chagall, Philip Guston, Hans Hoffman, Alex Katz, Anselm Kiefer, Joan Mitchell, Ed Rusha, and Frank Stella had gone to the moon.
For collectors smart enough to tap into the Impressionist movement early 1860’s, the world said this was crazy, worthless junk. It took 40 years for Impressionism to catch on, largely because U.S. tycoons were told to buy this work. They listened to their dealers: Paul Durand-Ruel and later Joseph Duveen. New collectors unlocked the Old Masters too, held by the French and English aristocracy. End of the 19th century, huge surpluses in grain inventories drove down prices and led to disinvestment for Old Masters.
If you need a reference point on how low art prices do plumb, go back to the fifties and take in this table on prices at a 1959 auction by Sotheby’s. Peak price was a Picasso at $55,000 Modigliani fetched $12,000. Gerald Reitlinger then plunged ahead, predicting a return to pictorial realism. (Tell that to Andy Warhol and company).
During the Great Depression, in 1931, at the London auctions, few paintings exceeded 1,400 guineas, the lowest number since the 1870s. Frans Hals “Smuggler” made £3, 600.
Art after the Great Crash turned dull until after our troops invaded Italy in 1943. Feelings of guilt over splurging for canvases ended after our troops secured Omaha Beach.
The best story on “bargain basement” purchases belongs to me. Early seventies, one day, Mary Boone telephoned to say I had to come downtown to see the work of a hop-headed kid just off the streets and subways where he was chalking up subway cars. I subwayed down to see half dozen of the kid’s paintings, huge, multicolored geometrics. “We’ve had him holed up here, painting 14 hours a day,” Mary said. They’re $2,500 apiece. I looked and dismissed such work that 45 years or so later auctioned for $100 million.
“Yes, Mary,” I said. “They’re promising,” but my sole interest is the new wave of German painters, Kiefer, Baselitz, Immendorf. In 1973 this work sold under $100,000 and eventually the low millions.
Think of it! I could’ve checked out of The Street. No more stodgy annual reports to read or music sheets from analysts, economists and corporate headmen. In mitigation, years later I did buy Basquiat’s work.
Postwar, the art market had rested, dormant until 1952, when Abstract Expressionism swept into the Big Apple. Stocks then yielded more than bonds, a phenomenon that resurfaced in 2014.
Currently, the stock market looks at least 20% overvalued. It shouldn’t sell above 15 times expected earnings, not 20 times. Reciprocally, the market at times does sell on the cheap. Look at these prices for signature stocks when they’re disdained. Many growth stocks, spring of 1984 sold at no premium. Microsoft sold at a 10% market discount with minimal premiums for Apple, Google, even Coca-Cola. There was belief that gross profit margins would succumb.
But they held up. As for Art, everyone today seems cautious but interested as they should be.
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