History for Sale

Heritage Auction Galleries made a fortune selling rare coins. Now itís making a mint offering gems from Americaís rich past.

Heritage celebrates its 30th anniversary this year, and it's doubtful many people in Dallas know it exists. It's not that Heritage has tried to remain hidden. It sends out press releases announcing its every auction, even the monthly ones filled with low-dollar items, and receives international press coverage each time it sells something notable; Nic Cage's sale alone in October 2002 garnered some 1,100 mentions in the worldwide media. Ted Pillsbury says he'd never really heard of the company till he was approached by its owners last year, and he lives down the street.

But that's not such a surprise: Its primary business remains a hobby for very rich people who do not screw around with their investments. A Franz Klein may sell for $6.4 million at a Christie's auction, but at least you can hang a painting on your wall and enjoy its beauty and show your friends how good your life is. But just what are you going to do with a 1796 gold piece that looks like it just rolled off the mint? Put it over the fireplace? Yet in January alone, Rohan sold four coins in private sales for a total of $9.4 million. For four coins.

But Heritage, through auctions like the two-day affair on April 14 and 15 and through its monthly and sometimes weekly sales of comics and movie posters, wants to alter your perception of auctions as something rich people do to kill time or a fancy place to get your pockets picked by people attaching arbitrary value to throwaway things. Wear jeans, spend $100 on some Simpsons production sketches or $75 for a signed 1980 Roky Erickson concert poster, load up on snacks and soda. That's Heritage now, which is nothing at all like it was in 1976.

Jim Halperin is responsible for Heritage's expansion to 
pop culture.
Jim Halperin is responsible for Heritage's expansion to pop culture.
Ted Pillsbury's hiring might allow Heritage to finally 
catch Sotheby's and Christie's.
Ted Pillsbury's hiring might allow Heritage to finally catch Sotheby's and Christie's.

Few who work at Heritage today were around when a coin collector named Steve Ivy started the business. Ivy and Halperin were competitors back then--archrivals, say many. They were barely into their teens when they got into the rare coin biz, growing their stacks of old pennies into mounds of big bills. In 1976, Ivy had Heritage out of Dallas and Halperin had New England Rare Coin Galleries in his native Boston, which he started in 1971 as a Harvard University freshman. (Halperin dropped out shortly after.) Barely into their 20s, they were already the top two coin dealers in the world. Greg Rohan, who got into coins when a neighbor gave him a jar of old pennies when he was 8 and living in Seattle, idolized them. He was 15 in 1976, when he met Halperin and Ivy for the first time at a rare coin show in San Francisco.

Ivy, whose son Chris now runs the sports memorabilia auctions, and Halperin's bitter rivalry came to an abrupt end in the early 1980s, after oil man H.L. Hunt's boys Nelson and William Herbert sucked up more than 200 million ounces of silver, half of what was available in the entire world. The Federal Reserve put a stop to their hoarding real quick, and by March 1980, the price of silver, which hit more than $50 an ounce during the silver rush, was cut in half, from about $20 an ounce to $10.

During the silver rush, Rohan says, "coin dealers were making vast sums of money, and since they all started as collectors, what they did with those big profits was buy the coins they loved their whole lives. But when gold and silver prices collapsed, so did the lines of people and the income coin dealers got used to, and where did they turn to pay their bills but sell the coins they had bought. So the coins all came back on the market, and the coin market went way down."

Ivy's business was doing only slightly better than Halperin's, which forced the latter to move to Dallas from Boston in 1983. Halperin says it wasn't easy. "Every decision I make is difficult," he says, with a slight laugh. "I have no idea what sealed the deal. It was the sweep of history. I like Steve and trust him and hope the feeling is mutual, but it wasn't an easy decision. I never had to answer to anybody till then." And Halperin was bringing with him a valuable asset: the foreign offices Heritage still operates today.

But Ivy was risking a lot by bringing in Halperin, who would become the more vocal and visible of the two. As recently as December 2004, Forbes ran a profile on Halperin and referred to him as "the leading rare coin dealer in America--and the most controversial guy in the business" because of his "brushes with postal inspectors, the Federal Trade Commission and coin dealers who have sued him for, among other things, sticking them with inflated prices."

Halperin owned up to Forbes' description; he told writer Christopher Helman he was "definitely a scoundrel at 13," when he began a mail-order advertising business out of the family's Boston home. He took out ads in magazines recruiting folks to pay up and join his "nonexistent sales network," Helman wrote. Postal inspectors didn't take kindly to his teenage scam and forced him to pay back an astounding $100,000. In 1997, a New Orleans dealer sued Heritage, claiming the company was forcing him to buy coins at higher prices than others were paying Heritage--for the exact same merchandise. An arbitration panel ordered Heritage to pay $23 million, though according to Forbes the Louisiana dealer took less.

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