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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 stated.

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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