Art and Antique Frauds

Report Outline
Risks of Fraud in Booming Art Market
Past and Present Trends in Collecting
Protection of Investors in Art Market

Risks of Fraud in Booming Art Market

Alert investors and cultural status seekers have joined forces to create a bullish market for arts and antiques. A recent survey by the Times of London and Sotheby's, a leading British auction house, showed that the value of paintings by six artists of the impressionist school had risen ten times over since 1950–52. During the same period, stock market prices rose only about three and one-half times. Although the impressionists are the stars of the current market, the over-all demand for original paintings and prints, antique furniture, and art objects so far outstrips the supply of genuine articles that traffic in fakes and forgeries of all kinds also is flourishing.

Because more collectors with money come on the art scene every year, the collecting game, once restricted to royalty and aristocracy, has developed into a vast enterprise. Ralph F. Colin, administrative vice president of the Art Dealers Association of America, said a few years ago that he used to know most of the country's major collectors by name but the number now had grown so large that he “couldn't begin to name them.”

The number of art dealers in New York, center of the market in this country as London is in Europe, has risen from fewer than 50 in the 1930s to more than 500 today. Established galleries are opening branches. More than 120 new art museums have been founded within the past 15 years, and such leading museums as the Metropolitan Museum of Art and the Museum of Modern Art in New York are expanding both collections and exhibition space. Museum activity has a great effect on market conditions. It has been pointed out: “The market value of art is as artificial as that of gold or of diamonds. The great public galleries are the Fort Knoxes of art. Their contents …control the price of art outside them just as surely as the value of money is governed by those …hoards of gold.”