I love old American sterling silver flatware. I believe it is one of the most underappreciated and undervalued antiques currently available in the marketplace. So you can imagine my delight when I stumbled across a partial set of Gorham sterling flatware selling below scrap value during an outing to a local garage sale last summer.
This was notable by itself, but became even more interesting when I was browsing eBay the other day. I found a set of 6 Gorham sterling silver butter knives in the very same Etruscan pattern that I had purchased at the garage sale. This beautiful set weighed in at a hefty 154 grams (4.95 troy ounces). Unlike a lot of antique cutlery, these butter knives didn’t have stainless steel blades, so all of that weight was solid sterling silver. Better yet, the buy-it-now price was only $82, plus $7.95 shipping and handling.
But before I delve too far into the financial specifics, I want to take a short detour to talk about The Gorham Manufacturing Company and its Etruscan pattern.
Gorham sterling flatware has a stellar reputation among antique silver collectors. The company produced a broad range of designs to appeal to every taste – everything from the simple and staid to the exuberant and fancy. Many of its designs – like Chantilly (1895), Buttercup (1899), Fairfax (1910) and Strasbourg (1897) – are still among today’s most popular silver flatware patterns more than a century after their inception.
Of course, Etruscan (1913) was also one of Gorham’s more popular patterns. It was created by the firm’s celebrated chief designer, the Englishman William C. Codman. From the moment he was hired in 1891 until his retirement in 1914, Mr. Codman was undoubtedly Gorham’s most valuable employee. He contributed 55 flatware patterns to Gorham’s stable over his career (including the firm’s all-time bestseller – Chantilly) and was also the brainchild of its coveted Martelé line of hand-finished hollowware.
The Etruscan pattern’s sleek lines and geometric Greek key motifs foreshadowed the rise of 1920s Art Deco styling. This is in spite of the fact that the Etruscan pattern had been designed in 1913, almost a full decade before the start of the 1920s.
Etruscan was so popular with well-to-do households that it was produced more or less continuously from its creation in 1913 until 1991, when Gorham retired it. Unfortunately, the quality of Gorham sterling flatware declined starting in the early 1970s. This is because the company was acquired by the industrial conglomerate Textron in 1967, which enacted cost-cutting measures. As a result, vintage pre-1970 Gorham sterling flatware is preferred by astute collectors.
Now that we’ve had our brief history lesson, we can get back to the meat of this article.
The set of Gorham sterling flatware I found on eBay really got me thinking about intrinsic value and premium over melt. With the spot price of silver hovering around $14.80 a troy ounce, the Etruscan butter knives I had been eyeing up contained about $68 worth of silver. And the $82 asking price was tantalizingly close to the set’s scrap value.
This got me thinking.
One way to approach antiques that possess intrinsic value, like Gorham sterling flatware, is to calculate the cost over melt value. This is known as the premium, which in this case was 32% ($82 asking price + $7.95 shipping = $89.95 total cost / $68 melt value).
A 32% premium is low…real low….ridiculously low, especially considering that we are talking about a matched set of desirable sterling cutlery that is most likely 50 to 100 years old.
But regardless of how enticing this deal might seem, it is important compare it against what else our $90 could buy us.
One obvious alternative to Gorham sterling flatware is to invest in a plain silver bullion bar. If you shop around, you could find a generic 5 troy ounce bar for maybe $83 (with spot at $14.80 an ounce). Many online bullion dealers have free shipping on order over $100, so assuming you could top-off the order, you would pay no shipping. This works out to a cost per ounce of around $16.60 – a premium of just over 12%.
Now, does paying an extra 20% premium (32% for the sterling butter knives – 12% for the bullion bar) – equivalent to about $3 an ounce – make sense? Is the old Gorham sterling flatware worth the extra expense?
This is where things get interesting. You see, when you buy a bullion bar you are just buying a slug of metal. It will never be worth more than the spot price of silver, provided it isn’t a vintage or poured bullion bar. And the cheap generic silver bar cited in the thought experiment above definitely doesn’t fit into either of those special categories.
But sterling silver flatware is different. Like all antiques, it has optionality – the possibility that it could sell for more than its bullion content to a collector based on its artistic merit, utilitarian application, historical significance or some combination of the trio. In addition, sterling flatware’s value is anchored to the price of silver as well. This means there are two potential ways to profit from antique sterling flatware: through a rising silver price or rising collector demand.
Vintage Gorham Sterling Flatware for Sale on eBay
(This is an affiliate link for which I may be compensated)
The key is to not pay too much for that optionality.
With the Gorham sterling butter knives in the example above, the total cost of the optionality is a piddling $13.74. This is mind-numbingly low. Less than $15 in premium buys you a century of history from an iconic American luxury firm rendered in solid precious metal. I’m comfortable playing the odds on this one.
And if you think a $15 premium is too much to pay, you could always wait for an eBay flash sale, where discounts of between 8% and 15% are available.
In addition, Gorham sterling flatware’s optionality – although puzzlingly cheap at the moment – never lapses or expires. Buy the knives today, throw them in an old drawer and forget about them. In 20 or 30 years, they will still be there, just as precious and beautiful as the day you hid them away. The only difference is that they will have another couple decades of history behind them and perhaps need a good polish.
Oh, and they’ll probably be worth a lot more money than they are now.
Just how much longer can we expect to enjoy such obscenely good deals in the antiques market? How much longer can 100 year old treasures sell for hardly more than the value of their recycled raw materials?
I don’t know the answer to that.
But I do know one thing; I’m buying antiques with both fists. And if you want to diversify away from that insane fraud factory we call a stock market, you’ll buy too.
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