The E-Sylum:  Volume 3, Number 26, June 25, 2000, Article 2


   Dan Gosling writes: "In the January 9th, 1965 edition of the 
   Canada Coin News on page 31 there is a picture of actress 
   Carroll Baker and a policeman. Her Furs, Jewelry, and Coin 
   Collection had been recovered after a burglary. 

   Further to Mr Kolbe's comments on AUCTION ETIQUETTE 
   in that same paper there is an article on "knock-out" rings. Here 
   is the story, headlined "British Dealers Face Scandal": 
   [I've edited the article a bit to cut its length.  Many thanks to 
   Dan for scanning it in. - Editor] 

   Disclosures of how some antique dealers get rich without 
   dealing has provoked a major reshuffle in their official British 
   organization.  Membership in the British Association of Antique 
   Dealers is supposed to provide a sort of testimonial of reliability 
   to the public who buy and sell.  The president and 13 members 
   of the Association's council have resigned after a public scandal 
   that exposed what one member called "club practices," and 
   others called plain cheating, and illegal at that. 

   It all began with an expose in London's Sunday Times early in 
   November. After five months of detective work, which included 
   sneaking a reporter with tape recorder and radio transmitter into 
   a secret meeting, the paper published details of a profitable game 
   called "knockout" by its players. Names were named,' figures 

   In one case, a small group of dealers shared a 500 per cent profit 
   made through the technique within a few hours. Despite Britain's 
   stringent libel laws, the Sunday Times had so many hard and 
   undisputed facts that nobody seriously tried to make it swallow 
   its words, or defend them in court. 

   The "knock-out" is run by rings of dealers. They get together 
   before an auction and agree among themselves to keep the 
   bidding extremely low on items of special interest.  As soon as 
   the public sale is over, they gather in private for another auction 
   among themselves. The difference between the first purchase 
   price and the highest bid behind closed doors is then shared out 
   among the group participating. 

   In that way, some dealers can make several thousand dollars 
   on a transaction by neither buying nor selling, and everybody 
   involved shares in the bargain except the public.  One 
   documented case of how the "knock-out" works involved a 
   Chippendale commode.  It was knocked down at public 
   auction for $2,100, with the dealers in the ring deliberately not 
   competing with each other. An hour later, secretly, the 
   commode changed hands for $12,180, with the difference 
   divided up among the ring. Within 24 hours the ring winner 
   resold the commode at a further considerable profit to still 
   another dealer, not in on the game but with a wealthy, 
   well-known clientele. Eventually it showed up at the annual 
   Antique Dealers Fair and was valued at about $30,000. The 
   family who sold it got the $ 2,100, minus fees and commissions. 

   The "knock-outs" are organized in such a way as to make rich 
   dealers much richer, but they also make little dealers a little 
   better off.  In fact, there are some people who make their 
   modest living as travelling non-salesmen in the antique business. 
   They turn up at country auctions where they expect the ring to 
   operate, help it by buying up the cheaper lots, or bidding on 
   them just a little, to give the appearance of diversity at the sale. 
   They they hurry to the "knock-out," turn over the acquisitions 
   they never wanted anyway, and go off  with their share of a few 
   dollars for having cooperated. 

   What really brought the scandal to a head in the end was the 
   diffidence of a number of the former leaders of the Association 
   at demands to clean up the trade.  Major Michael Brett, one 
   dealer,  told the Sunday Times, that "I blame the stupid public." 
   The ring system, he said, "is inevitable" so long as sellers fail to 
   have their treasures properly valued." 

  Wayne Homren, Editor

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