The Fabulous King Farouk Sale of 1954
By Dr. Sol Taylor
The late Abe Kosoff, a veteran coin dealer, attended the sale and wrote in his memoirs a detailed account of the unusual circumstances surrounding the liquidation of one of the most significant collections of United States coins ever assembled. Author Carl N. Lester published an article, "Numismatic 'Gumshoe' On the Trail of King Farouk," which describes in some detail mainly from Kosoff's accounts the peculiar multi-million-dollar sale. In 1954, no coin auction had even approached $1 million.
King Farouk was forced into exile by a military coup in 1952 and left on the Royal Egyptian yacht for Europe where he lived until 1965. As a boy and young man, he enlisted several United States (and possibly European) coin dealers to build a numismatic pyramid bigger and more prestigious than any other.
One of his New York City dealers, Hans Schulman, shipped him collections and rarities acquired during the Great Depression from leading collectors of the era who were facing severe cash shortages. The king had an insatiable appetite and purchased entire collections and top-tier rarities as fast as he could dip into the national treasury.
As his excesses drained the national economy and drew the ire of his military, Farouk was forced to limit his purchases to $10,000. With his ouster in 1952, the Egyptian revolutionary government took over his vast holdings of artworks, antiquities, sculptures, coins and medals and arranged to liquidate them and return the proceeds to the national treasury.
Since no one in the new provisional government was skilled in such sales, they hastily put together a series of numismatic auctions cumulatively known as the "Palace Collection of Egypt." The London firm of Fred Baldwin was contracted to examine the collection and assemble a catalogue for a public sale. Due to various restrictions imposed by Egypt, the examination period was very short and the use of quality photography was limited. The collection was broken down into lots of coins, often mixing rare and common coins in a single lot. The catalogue was assigned to the London firm of Sotheby's. Some 8,500 U.S. gold coins were in the collection, including what was probably the only complete set of Saint Gaudens $20 "double eagle" gold coins.
One lot described by Kosoff which was typical of the lots went somewhat like this" "Lot 333, Forty different $1 gold coins 1849-1889." No grades were given and no mintmarks listed. Such lots often were sold at the value of the most common coin, and as a result, the few active buyers in attendance bought major bargains. Kosoff believed that at the time, the coins were selling for as low as 10 percent of their true market value.
In addition to Kosoff and Schulman, James Randall, Paul Whitlin and Sol Kaplan were among the handful of dealers present for the actual bidding. Due to the remote location of the sale, the lack of promotion, the vague cataloguing and the restrictions imposed by the military, most potential bidders stayed away. At that time there were no mail bids, no telephone bidders and, before computers, no online bidding.
Schulman had a leg up on his fellow dealers, since Farouk had purchased several million dollars worth of coins from him, and by 1952 he owed Schulman some $300,000. When Schulman demanded payment, the new government gave him credit for $300,000 toward his purchases in the Palace sale. Naturally, Schulman was the top bidder, buying back many coins he had sold but never got paid for. He reportedly sold some of these coins to other dealers as he broke down some of the lots he bought.
Most bidders came prepared to spend $100,000 or even more. Rochester railroad magnate and prominent numismatist John J. Pittman allegedly refinanced his home to raise cash to attend this sale. He acquired many items which eventually became one of the finest United States collections.
Gaston DiBello, a wealthy collector from Buffalo, N.Y., acquired several lots of gold coins which eventually became part of his estate, and which was later sold by Bowers and Merena Galleries. These coins made up significant portions of his many award-winning coin exhibits.
Many Farouk pieces found their way into the fabulous collections of Pittman, Harry Bass, Henry Norweb and other notables.
In the 1940s, Farouk acquired the fabulous collection of half eagles ($5 gold coins) from the estate of Col. E.H.R. Green, son of the Wall Street eccentric Hattie Green. The colonel also owned all known 1913 Liberty head nickels at one time. His half eagles showed up in a Bass sale in May 2000 where each set record prices.
Farouk's large collection of United States pattern coins included many pieces of which only one or two were known. For whatever reason, Farouk felt they would be better preserved if coated with varnish or a similar material. Kosoff acquired batches of these rarities in mixed lots described simply as "Lot XXX, Thirty-one different pattern coins dated 1860-1880." These pieces provided the basis for much of the information in the standard catalogue on pattern coins by Judd and Kosoff.
Today, coins that can be attributed to the Palace sale tend to bring higher prices than identical pieces not so attributed. Lester points out one example of an 1854-C half eagle in XF-40 condition that catalogued for $2,700 in 1993 and was sold by Heritage Auction Galleries in Baltimore for $5,720 as coming from the Palace (Farouk) Collection.
The actual catalogue of the King Farouk sale is itself a valuable numismatic item today, despite its lack of quality and depth. Very few exist and at auction could bring hundreds of dollars.
The Egyptian government could have realized perhaps more than 10 times the profit if it had consigned the entire collection to a major New York, London or Zurich firm where more bidders could attend, mail bids and telephone bidders could participate, and with sufficient publicity would bring greater results overall. Kosoff lamented one serious regret: He couldn't raise the cash to buy 20 times what he eventually bought. It is estimated that in today's market, the Farouk collection would easily top $150 million.
For greater details read the book, "Abe Kosoff Remembers" (Sanford J. Durst Numismatic Publications, New York City, 1981).
Dr. Sol Taylor of Sherman Oaks is president of the Society of Lincoln Cent Collectors and author of The Standard Guide to the Lincoln Cent. Click here for ordering information.
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