Tuesday 8 February 2011

Two Minute Due Diligence

Californian dugup artefact dealer Dave Welsh posted on his blog (4th Feb 2011) a text aiming to enlighten his readers on 'The Logistics of Provenance' ("I wanted to introduce some relevant information into this discussion"). Welsh is concerned to present some details "to illustrate what is feasible regarding the amount of time that can practically be spent evaluating a coin at a show, the cost of certification and its dependence on turnaround time". He tells us:
Yesterday I visited the Long Beach show on a buying expedition. In the course of about two hours I examined several thousand ancient coins and acquired many hundreds of them, all individually displayed in “flips” or 2x2 coin holders. The examination process allocated perhaps two minutes for each coin, including discussing its value with the seller. I expect to sell most of these coins for less than USD $100 each...
He then points out that commercial coin-grading services (a largely American aberration) may charge about $125 per coin for a "walk through" certification (of coin grade). Welsh considers that:
"It would presently be technically and economically feasible to document acquisition of a coin at a cost of between $10.00 and $17.00 per coin in a manner which should satisfy any reasonable provenance requirement, with traceability to its particular date of acquisition. That documentation would add perhaps two to three weeks to the acquisition process".
As an illustration of what he has in mind, Welsh indicates that his own antiquity sales outlet, Classical Coins, "offers a Certificate of Authenticity for coins we sell which I believe should satisfy any reasonable provenance documentation requirement, with traceability to a particular date of acquisition. The charge is $10.00 per coin. The sales spiel for this item on the page indicated reads as follows:
Add to the impact of your ancient coin gift by including a Certificate of Authenticity. This impressive 8.5 x 11 inch certificate is ready for framing or laminating, and attests to the inspection and authentication of this coin by an expert professional numismatist.
I really do not see the point of framing and hanging on the wall a printout detailing due diligence, the documentation should be kept with the collection, not hung on the wall as decoration. Welsh shows a picture of one, and I am sure he will not mind us discussing it here as a contribution to the discussion he started. I show the whole certificate (I assume the reverse is blank) and an enlargement of the "working bit".

This picture is a bit fuzzy in details, but you can see it has a picture of the coin and its weight, and it tells you it was bought from Classical coins on a certain date. But that's about it. The main aim of the certificate seems self-advertisement by the aforementioned "expert professional numismatist" whose shop it is and whose scrawly signature fills the bottom of the page. It also tells us he's a member of the ANA and ACCG (the latter should set alarm bells ringing for those who know what that group stand for). In the middle are two columns, on the left are the references to the typology according to standard numismatic works (though the abbreviations are not expanded upon - in a document of record intended to travel with the coin into subsequent collections in subsequent centuries they should be). Underneath is a rather simplistic "historical background" (but not to the authenticity and "licitness" of purchase of the coin, but its minting). ALL of this, the photo, the weighing, the blurb about what it is is part of the typical sales spiel. In other words this is what would be on the webpage of the seller already. Putting it up there Welsh estimates takes about twenty minutes a coin. So in a five day week of an eight-hour working day a coin shop employee can in principle put 120 of these descriptions on the website. That is of course largely what the retailing part of being an online coin dealer entails, putting the objects on sale and packaging them in an attractive manner.

With a little not very sophisticated application, the same data can be fed into the relevant boxes of the template for the data to be printed out in the form of an A4 sheet. I really do not see any grounds for charging anyone ten dollars to press the "import" button and getting up out of their chair to take the printed sheet out of the laser printer. That seems to me a coiney rip-off. By the same token then, I really do not accept that this ripoff price should be taken as justification for saying it is not "feasible" to make printouts like this for coins worth less than 80 dollars or whatever.

But let's have a look at this collecting history of Mr Welsh's offered exemplar. Its in the right hand column in the centre of the sheet. Well, the picture on Welsh's website is incredibly fuzzy. I can't make out the top line (it looks like it could be in Cyrillic - Bulgarian?). Then there is something that looks like 'Acquisition date'. Below that seems to be another number. Then there is the date the certificate was made (seems superfluous) then something which seems to give the name of the previous owner "(if known)". The name looks like S. Ahmadinejad. Other artefact sellers at least try to add details like "the Ahmadinejad collection was put together in the 1960s and early 1970s". Whether these stories can be verified is of course another question.

This apparently is what Welsh expects us to consider fulfils "any reasonable provenance requirement". Well, it does not. That coin could have been metal detected at night in 2004 from a south European archaeological site protected by law, smuggled into Munich to a dealer from whom Mr Ahmadinejad bought it online, it could have been shipped to him in the US in a padded envelope declared as containing "metal stampings" and without going through any customs formalities. It could then have been acquired with a whole bunch of Parthian, Bactrian and Greek coins by a Long Beach coin dealer from whom Dave Welsh bought it as part of a bulk buy after looking at it for about two minutes, including haggling about the price. There is nothing on the "certificate of authenticity" like this to show that a given coin was otherwise obtained. This is clearly not satisfactory. The mere fact that Mr Ahmadinejad had the coin in 2007 really does nothing to assure us it was from a licit source, a more fundamental question is where Mr A. got it from.

What possible kind of due diligence and verification can Welsh be doing in his buying if at his own admission he buys hundreds of coins in a two hour period in such conditions? I really refuse to believe in the efficacy of two minute due diligence.

There is a second point arising from Welsh's discussion of the "feasibility" of producing documentation of origins of the coins he is selling. By a somewhat convoluted line of argument he establishes that "The current value threshold at which the cost of provenance documentation would be accepted by large numbers of collectors is roughly $85.00 per coin". This of course raises the question whether it is the client that should be bearing the costs, or the person making the profits from selling archaeological material, I cannot recall any retailer of electrical goods who makes me pay extra for including a guarantee with my purchase. The problem Welsh seems to be driving at is that:
very large numbers of ancient coins are presently being traded at prices below $85.00 per coin. Classical Coins presently sells large numbers of coins at prices below $50.00 per coin, and I am not including “specials” (multiple coin lots) for which certification is not available. Clearly there is a “value threshold” that must be considered, and any demand that documentation be provided for a transaction to be licit becomes economically unreasonable below that threshold.
Well, first of all all that is being asked is that the purchaser gets a piece of paper outlining the results of the due diligence a dealer has (ostensibly) done before adding a dugup artefact to his stock - i.e., before he can responsibly sell it as legitimately obtained. I do not see why he should be made to pay for it.

More to the point, a moment's thought produces the question, where are these cheaper coins coming from? Mr Welsh's "specials" (I've discussed them several times on this blog) are uncleaned coins, in other words coins which are extremely unlikely to be cabinet toned items from old collections going back to the days of Petrarch. These are the very metal detected coins being sold in bulk lots and coming from goodness-knows-where that are the problem we are discussing. Many of these coins are the residues of the picking over of masses of metal artefacts produced by the metal detecting of archaeological sites all over the ancient world (the picking over which separates out the dealers' 80-dollars-or-more coins from the 'can be sold for less than fifty'). Vast numbers of these items entered the US market since c. 1990 from Bulgaria and other countries in the region of the Balkans. These are looted coins, looted and smuggled out of Europe by criminals. These are precisely the coins that should not be on a market which claims to be legitimate. It is this type of coin which, if of licit provenance, needs to have that demonstrated in a verifiable way, and - given the scale of looting and numbers of coins involved - the coins of this type which cannot demonstrate licit provenance should not be on any kind of legitimate market. That is what we need artefacts with documented collecting histories for, not to hang hand-signed 'certificates' decoratively on a wall, not to enhance some "gift" to a budding collector, but to put an end to the no-questions-buying of potentially looted archaeological material.

I think nobody, except cowboy dealers, is interested in something which only produces the superficial impression of a "legitimisation" of the antiquities market. We need a tool which adequately and effectively separates the legitimate market from the illicit one. One which differentiates the dealers in and collectors of items of licit provenance, and those who could not care less whether they are dealing in and collecting illicitly obtained material alongside other items. A scheme which will only document licit provenance for items over a certain threshold value, while the BULK of the items of this type on that market are sold for less than that value, will not clean up the bulk of that market.

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