No Biz Like Art Biz

"Art--Great Art that is--can be the most lucrative investment in the world." Thus FORTUNE in its current issue sums up the booming art markets of Paris, London and Manhattan (TIME, Jan. 10 et seq.). In the past decade, favored French impressionists have quadrupled in value and the hottest moderns have increased ten times; old masters are now almost beyond price. In all, sales this year in auction rooms and galleries will reach $65 million. Can the bull market keep up the pace? Says FORTUNE: "The long-range answer seems to be that it can--and probably will." More Per Inch. "Art is not only the symbol of wealth, it is the actuality of wealth," former Metropolitan Art Museum Director Francis Henry Taylor once pointed out. And as an investment, most collectors have found art to be right on a par with the bluest chip stocks. Vermeer's Portrait of a Young Girl, recently on loan to Manhattan's Metropolitan Museum, cost $350,000; judged as real estate, it is worth $1,252 per sq. in. (v. $2.10 per sq. in. for the House of Morgan's Wall Street terrain). A Cezanne that could be bought for about $100 when it was first shown in 1895 today fetches around $113,000. Notes FORTUNE: "General Motors has done a little better than Cezanne, but not so well as Renoir; $100 invested in G.M. stock in 1909 would be worth a total of $115,000 now." Going rate for a first-rate Renoir: $150,000 and up.

"Market confidence" is a big factor in the current art boom, but as in the stock market, the experts have sometimes been caught with their stocks down. Items: John Singer Sargent's watercolors, worth $20,000 in the '205, today can be picked up for around $1,000. Alphonse de Neu-ville's flagwaving scene from the Franco-Prussian war, The. Last Cartridges, whooped up to $40,000 in gold in 1890, was auctioned off six years ago for $11.

Golden Apples. FORTUNE'S optimistic prognosis on the future high price tags on art is based on the fact that over the years, art masterpieces have held their own, better than most stocks and bonds, through wars, inflations and depressions.

Now, with most luxury goods in bountiful supply, art remains one of the few scarce precious commodities. As more and more new bidders, ranging from newly prosperous Europeans to newly rich Texans and Brazilian millionaires, start cutting themselves into art for both prestige and speculation, the supply of currently approved classics is drying up. Older masterpieces have all but disappeared from the market--either by "cold socialization," i.e., being declared "national treasures," or by winding up in art museums.

As one London dealer sadly remarked: "Museums don't die." Prospective collectors who still want to deal themselves in at the big auctions must be willing to pay up to $25.000 for a painting. When the really big collectors decide to show their hands, the price can go over the $100.000 mark, as it did when France's Mme. Jean Walter paid $113.000 to outbid Swiss Gun Manufacturer Emil Buhrle for a Cezanne still life, Pommes et Biscuits, at the 1952 Gabriel Cognacq sale in Paris.

For the average collector, willing to pay from peanuts to $3,000 for a painting he likes, the best bets are the "speculative growth issues," the moderns. Here the buyer pays now, collects later. If he bets wrong, he at least has his wall covered.

If he is right, he can boast to his grand children and take a nice capital gain on his investment.

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