Gems and Jewelry Appraising: Techniques of Professional Practice

204 Pages·1988·9.85 MB·English

by  Anna M. Miller GG

GEMSAND
EWELRY
TECHNIQUES OF
PROFESSIONAL PRACTICE
ANNA M. MILLER, GG, ASA
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Copyright © 1988 by Van Nostrand Reinhold
Softcover reprint ofthe hardcover I st edition 1988
16 15 14 13 12 II 10 9 8 7 6 5
Library of Congress Cataloging-in-Publication Data
Miller. Anna M.
Gems and jewelry appraising: techniques of professional
practice Anna M. Miller.
p. em.
Bibliography: p.
Includes index.
ISBN-13: 978-1-4684-1406-6 e-ISBN-13: 978-1-4684-1404-2
DOl: 10.1007/978-1-4684-1404-2
1. Jewelry-Valuation. 2. New business enterprises
Management.
l. Title.
NK7306.M54 1988
739.27'0723-dcI9 87-25383
CIP
For a complete listing of Chapman & Hall's titles, send your requests to Chapman
& Hall, Dept. BC, 115 Fifth Avenue, New York, NY 10003.
To Joanna, for her help,
friendship, and support
CONTENTS
PREFACE VB CHAPTER 4.
RESEARCH AND ANALYSIS:
ACKNOWLEDGMENTS IX HOW TO ESTIMATE VALUE
Pricing Old-Cut Diamonds 73
CHAPTER 1. Phenomenal Gems 74
THE APPRAISER Fantasy-Cut Gemstones 74
Who Is a Professional Gems and Jewelry Ivory 75
Appraiser? Jet 76
Opening an Appraisal Service 9 Coral 77
Establishing a Professional Image 16 Amber 78
Questions Most Often Asked by Opal 80
Gemologists about Appraising 19 Jade 80
Pearls 81
CHAPTER 2. Bead Necklaces 85
APPRAISAL PROCEDURES AND THE Rare and Collector Gems 86
NATURE OF VALUE Synthetic Gemstones 86
The Purpose of the Appraisal 23
Appraisal Functions 26 CHAPTER 5.
Limiting and Contingency Conditions for JEWELRY FROM ANTIQUITY TO THE
Appraisal Documents 33 MODERN ERA
Handling Insurance Replacements 34 Jewelry Antiquities 93
Antique Jewelry 95
CHAPTER 3. Examining and Evaluating Period Jewelry 102
CONDUCTING THE APPRAISAL Cameos 105
Initial Examination and Take-In 39 Class Rings, Fraternal Jewelry, and
Appraisal Preparations 43 Religious Jewelry 108
Photographing the Jewelry 43 American IndianJewelry 110
Cleaning the Jewelry 45 Ethnic Jewelry 112
Identifying, Measuring, and Weighing European Designer Jewelry 114
Gemstones 46 Jewelry from New-Wave Designers 116
Analyzing Metal Fineness 54 Costume Jewelry 119
Weighing, Measuring, and Noting the
Manufacturer 57 CHAPTER 6.
Trademarks and Hallmarks 60 VALUING WATCHES, COIN JEWELRY,
Conducting Market Research 62 CARVINGS, AND OTHER ARTICLES
Computers and Telecommunications 68 Vintage and Contemporary Wristwatches 121
Comparing Notes with Foreign Colleagues 69 Pocket Watches 126
V
vi CONTENTS
Coin Jewelry 129 The Carat System 173
Erotica 132 Diamond Prices: 1980-1985 174
Carvings 132 Gold and Silver Prices: 1971-1986 175
Hardstone Carvings and Gemstone Weight Estimation Formulas
Sculptures 136 Diamonds 176
Silver Flatware and Holloware 139 Colored Stones 176
Recommended Report Forms
CHAPTER 7. Gem Identification Report 177
LEGAL AND ETHICAL ASPECTS OF Quality Analysis: Colored Stones 178
APPRAISING Quality Analysis: Opals 179
The Appraiser's Role in Gemstone Barter 146 Quality Analysis: Change-of-Color
Survival Techniques for Expert Witnesses 148 Stones 180
Quality Analysis: Pearls 181
CHAPTER 8. Quality Analysis: Cat's Eye and Star
PREPARING THE APPRAISAL Stones 182
DOCUMENT Jewelry Appraisal Update 183
The Appraisal Report 155 Sample IRS Valuation: Donation Appraisal 184
Developing a Professional Brochure 161
GLOSSARY
APPENDIX Metal Finishes 185
Illustrations of Cutting Styles 165 Opal Terms 186
Size-to-Weight Conversion Charts Antique and Period Jewelry Items 186
Standard-Size Cabochon Gems 169
Opal Cabochons 170 BIBLIOGRAPHY 189
Caliber-Cut Gemstones 170
Weight System Conversion Charts SOURCES OF ADDITIONAL
Pennyweight-to-Gram Conversion 172 INFORMATION 192
The Troy System 173
Avoir and Troy Weights 173 INDEX 195
PREFACE
Only a few years ago, if you needed an appraisal of The revolution in the personal property appraisals
gems and jewelry for any reason, you asked your local field (of which jewelry is a part) is a little more than a
jeweler, who hastily scribbled a one-line handwritten decade old. There now exist uniform standards and
note. He or she usually performed the appraisal for procedures for personal property appraisers, classes
free, and did so with reluctance, accommodating you in valuation techniques, and degree programs in the
only because as a customer you held the promise of a valuation sciences.
future sale. The price your jeweler may have assigned Professional jewelry appraisers are on the edge of
to the jewelry was granted without the least regard a new vocation. Banks, insurance companies, and
for market research, legalities, or ethics. In most in governmental agencies have all helped bring about
stances, the estimate was no more than a properly the changes and contribute to the birth of the profes
completed sales receipt. sion; they have realized that they can demand and
Gemologists were usually pushed into the role of get high standards of performance and integrity from
appraiser by their jeweler employers, who were eager jewelry appraisers, as they can from appraisers of real
to gain an advantage over their competitors by adver property.
tising an experienced, well-educated staff. Assured by This book is a guide to becoming a professional
their bosses and gemological instructors that gemo jewelry appraiser, not a textbook on gemology or
logical training constituted a knowledge of appraisal, value theory. Valuation theory is a complex study
gemologists took on this role and muddled through best obtained in structured classes. Similarly, you
the subsequent difficulties. No one ever asked jewel should already have gemological expertise if you plan
ers or gemologists if they knew (or cared) about the to become an appraiser. This book, while recognizing
differences between value and price. that jewelry appraising as a learned profession is in
The first hint that a professional jewelry appraiser its infancy, attempts to enlighten both the new and
might be a distinct entity from a jeweler and separate practicing appraiser in current valuation techniques,
from a gemologist occurred in the 1970s, during research methods, markets, liabilities, and legalities.
which gems and jewelry gained widespread popular The prices and values stated in Gems and Jewelry
ity as investments. Consumers, newly conscious of the Appraising are actual prices compiled from quotes by
effect of grading standards for diamonds and gem wholesale and retail gems and jewelry dealers, an
stones on their price, began to demand precise re tique jewelry dealers, manufacturer's price lists, and
ports with exact figures of "value." While gemologists New York spot commodity prices-precious metals
could identify and grade, and jewelers could keystone and sales realized from auctions. Since the supply and
merchandise to come up with a price, few were qual demand of gems and jewelry vary greatly, sharp dif
ified to go into court to substantiate their "value" ferences in price are likely to occur from one geo
judgments or explain, logically, how it was estimated graphical location to another, based on regional tastes
on a particular item. To make matters worse, no uni and local economy. The prices stated in the text are
versal appraisal standards for jewelry appraisers were therefore to be viewed as guides rather than exact
known or used industry-wide. values.
vu
ACKNOWLEDGMENTS
lowe a debt of gratitude to many people who have methods of valuation. Thanks to contributors of ideas
helped me with this book. Special thanks to Joanna and suggestions from individual members of the
Angel for editorial assistance. Acknowledgments go Gemological Institute of America, the American So
to people who specifically contributed information ciety of Appraisers, the National Association of Jew
and suggestions to the manuscript: David S. Atlas, elry Appraisers, the American Gem Society, the
Pamela J. Abramson, Dona M. Dirlam, Fabio Gra Accredited Gemologists Association, the Appraisers
minga, Lynette Proler, Richard F. Digby, Carol P. Association of America, and the International Society
Elkins, Edward Tripp, Marcia Hucker, Kay and An of Appraisers.
thony Valente, Judith Osmer, Dianna Chatham, Dr. Special thanks to Dr. Charles D. Peavy, ASA; Jo
Richard Rickert, Shelly Kuehn, Lary Kuehn, Therese seph W. Tenhagen, ASA; Fred L. Iusi, ASA; and
Kienstra, Kim Hurlbert, Gail B. Levine, Myra L. ASA Director of Education Arthur Wilson for provid
Waller, Erin Randall, Emyl Jenkins, Gerhard Becker, ing useful critiques of the manuscript.
Denise DeLuca, Joy McGeorge, Silva Salakian, Tan I express my appreciation to Elizabeth Hutchinson
nis Bilkoski, Alfred Brown, Howard Rubin, Patricia for the artwork and to Alfred Lee for providing some
Soucy, Berangere Hannedouche, and Ellen Epstein. illustrations. To John Miller for countless hours spent
Many thanks to the members of the Association of reading the manuscript, thank you.
Women Gemologists who enthusiastically partici Finally, thanks to friend and mentor Sara Levy,
pated in several years' research on appraisers and who was there at the start.
IX
CHAPTER 1
THE APPRAISER
"The whole subject of appraisal of property: it's not an art
and it's not a science; in my opinion, it's a mystery. "
Tax Court judge Carlisle B. Robm·ts
Astoria, Oregon, june 1974
Appraising is a profession that started booming a few Who Is a Professional Gems and Jewelry
years after Judge Roberts pronounced it "a mystery." Appraiser?
The practitioners are a far cry from the old-time
traders and miners-those romantic figures of the
Gold Rush years. The glamor men and women of the At the present time anyone can call oneself a profes
industry today are the gems and jewelry appraisers, sional appraiser. However, self-anointing does not
who understand gemstone treatments and can deter confer expertise. The key is education. A gemologist
mine the country of origin and fair market value of or jeweler who has undergone gemological training,
precious gemstones and metals. holds a degree or special education in valuation sci
For many years, jewelry appraising hardly com ence, and has buying and selling experience either on
manded prestige. "It was more like another hat the a wholesale or retail level, has the basic prerequisites
retail jeweler put on when absolutely necessary," re of an appraiser. Those with a tested, certified ability
members a New York jeweler. "Most people thought to value, identify, and grade gems and precious met
there were a few good ones and the rest were sleazy." als, circa-date jewelry, determine manufacturing
The status and number of jewelry appraisers methods, research, write, and support valuations set
changed dramatically during the late 1970s, the pe forth in a report, have the fundamental skills re
riod of investment gemstones, tax-shelter donations, quired to gain a marketable reputation as profes
and barter deals. The demand for independent jew sional appraiser.
elry appraisers to handle the burgeoning investment Clientele who may be served by this specialized
market as well as the need to establish ethical stan knowledge include diverse groups: jewelry retailers,
dards for appraising were met by a plethora of new wholesalers, collectors, the general public, investors,
appraisal organizations, while creative leadership and insurance agents, insurance claims adjustors, bank
guides encouraging those already involved with per trust officers, attorneys, state and federal agencies
sonal-property valuations spewed forth from estab including the U.S. Customs and the Internal Revenue
lished appraisal societies. Service-auction houses, certified public accoun
Amid the turmoil, the new codes of ethics, the sanc tants, museum curators, pawnshops, and so on. The
tions and the certifications, something exciting hap possibilities are endless.
ened. To this profession in transit, a separate and The evolution of the jeweler or gemologist into an
elite progeny was born: professional gems and jew independent, skilled appraisal specialist worthy of
elry appraisers. These men and women were wise public trust is a welcome step in a trade with a history
enough to obtain state-of-the-art gemological and val of misplaced ethics and misguided integrity. In refus
uation training and aware enough to comprehend ing to be swayed from a strong code of ethics, or sense
that the public's and industry's outcry for reform of moral obligation, appraisers will maintain their po
would probably result in government licensing and a sitions of trust and could act as catalysts to upgrade
new set of appraisal legislation. the credibility of the entire jewelry industry.
2 THE APPRAISER
A Brief History of Appraising lection of gems in the British Museum, through the
It has been said that jewelry answers a deep human acquirement by purchase of a splendid specimen of
need for self-beautification. From the earliest known the Zircon. It cost upwards of 700 £, and is no
jewelry items, which consist of three fish vertebrae larger than a common garden pea. It is one of the
necklaces dating from the late Paleolithic era (25000 finest known. It flashes and glows with a red lustre
to 18000 B.C.) men and women have loved wearing which seems to denote the actual presence of fire
jewelry. Every culture has a history of prizing neck and flame.
laces, rings, bracelets, and other tokens. Most, if not
all, have also treasured earrings. The collection, use, Westropp added that he was in a position to state on
and love of jewelry have been motivated by emotions the best authority that the zircon weighed about three
ranging from blind superstition to monetary security carats.
and social status. An early appraisal report can be found in the work
The first great jewelry and gemstone collectors of the Ratnapariska of Buddhabhatta, written in San
were royalty and the church. Tiley were in lock step skrit and now kept in the Bibliotheque Nationale,
with the first valuation specialists-the tax collectors Paris. This fifth-century manuscript states: "A dia
or assessors. mond weighing 20 tandula is worth 200,000 ru
Like appraisers today, the tax collectors of old pakas."
needed some knowledge of values. Interestingly, Earlier still, the value of a gemstone can be found
texts were available for their use from as early as the in Book 37 of Pliny the Elder's Historia Naturalis, writ
fourth century A.D. In an Indian text, the Artha ten in the second century A.D. He quotes Theophras
Sastra, developed between the fourth and six centu tus (c. 372-c. 287 B.C.) in giving a price for an
ries A.D., a body of rules and standards regulating anthrax (probably a ruby): "A small ring stone used
taxes and other charges were applied to diamonds to sell for forty aurei" (about $205.00). Pliny does not
and precious stones. The text, which has been trans state the price per carat of the gem but he does men
lated as The Estimation and Valuation of Precious Stones, tion the value factors of gems, which seem to be the
reveals an extensive knowledge of the subject that was same as those still held today: beauty, rarity, and de
used for over one thousand years before evolving into mand. In Pliny's time crystal was valuable for goblets,
a genuine technical manual known as the Ratna-Sas and aventurine's price increased with the "greater
tra. This latter text, used by assessors, officials, mer number of stars upon the stone." This sounds a lot
chants, and others, has a detailed list of factors to be like gemstone appraising today, where visual phe
considered in assessing the value of individual gem nomena command a higher valuation.
stones. Some precious jewelry, however, is difficult to place
Mostly, however, the search for information about any value upon. Major-General H.D.W. Sitwell,
valuation methods throughout antiquity turns up Keeper of the Jewel House of the Tower of London,
only inventory lists, although the lists themselves can has declared it impossible and fallacious to affix any
be highly informative and certainly entertaining. One monetary figure to the royal regalia:
example is the 1750 Treasure Inventory of the Haps "It is impossible," he writes, "because the Regalia
burg-Lorraine family of the House of Austria. It really represent three values: (a) as precious stones,
mentions a large holding of jewels, as well as works gold and plate, the value of which might be estimated
of art and such heirlooms of religious significance as by ajeweler; (b) as museum pieces, the value of which
the Agate Bowl, once believed to be the Holy Grail. might be doubtfully assessed by an expert valuer; (c)
To a jeweler and appraiser this inventory is exciting; their traditional value as the Regalia of Great Britain
it can still be viewed, along with much of the listed and the British Commonwealth and Empire, the most
treasure, in the Kunsthistorische Museum in Vienna. important value of all" (SitweII, 1953, viii).
In 1874, H. M. Westropp wrote A Manual of Pre The majority of today's jewelry appraisers, of
cious Stones and Antique Gems, in which he lists the item course, are not faced with the task of appraising
of the Townshend Collection, housed in the South crowns and coronets. Most see a lot of cluster rings,
Kensington Museum, London, and the British Mu straight line bracelets, wedding sets, and pearl
seum's Blacas and Devonshire Gems, but does not strands. They are delighted, however, when an espe
give their values. He offers one interesting tidbit cially elegant item from antiquity or elaborately jew
about value, however, in a quote from a September eled object of unknown provenance turns up for
25,1874 issue of the London Times: valuation. It is this kind of variety that the appraisers
enjoy most; the surfacing of a special treasure in an
A valuable addition has just been made to the col- otherwise ordinary collection.
WHO IS A PROFESSIONAL GEMS AND JEWELRY APPRAISER? 3
Qualifications and Equipment affect the market from source to consumer
Much has been written about who is qualified to 6. Knowledge of current wholesale and retail prices
appraise gems and jewelry. Does being a gemologist of gemstones, jewelry, and watches
make you a qualified jewelry appraiser? No, but gem 7. Knowledge of actual sales prices with access to ver
ological training does provide one of the subskills ifiable data
necessary to appraise competently. Does being ajew 8. A complete gemological laboratory, which in
eler, buying and selling goods every day, make a qual cludes the following:
ified appraiser? No, but it provides one of the tools of • Binocular microscope with dark field illumina-
appraising: a necessary knowledge of the market tion
place. • Refractometer
The fact is, many jewelers and gemologists who do • Polariscope
appraisals are ignorant about what an appraisal really • Spectroscope
is: a statement of the value of an article in its common • Dichroscope with calcite lens
and most appropriate market, not its price in anyone • Ultraviolet lights, SW/LW
store in particular. Jewelers set prices; appraisers • Leveridge micromillimeter gauge
analyze prices in relevant markets to define value. • Table gauges
Just what is an appraisal? A definition of the term • Thermal conductivity probe
from the North American Conference of Appraisal • Metal testing kit
Organizations (NACAO) was recently quoted in the • Fiber-optic illuminator
trade publication Modern Jeweler: • Diamond color grading light
• Master grading set of diamond stones, graded
A written statement, independently and impartially by the GIA; five stones minimum with weights
prepared by a qualified appraiser, setting forth an of at least a quarter carat each
opinion of defined value of an adequately de • Photographic equipment that will photograph
scribed property, as of a specific date, supported by on a 1: 1 ratio
the presentation and analysis of relevant market • Specific gravity liquids
information (Federman, 1986,44). • Gold weight scale (dwt. scale or gram scale)
• Diamond balance scale or carat weight scale
The key words here are "qualified appraiser" and • Colored gemstones grading system
"defined value." To determine value requires train • Tweezers
ing and education in long-established appraisal prin • Color filters
ciples, procedures, value theory, and research • Chelsea filter
methods. Furthermore, a knowledge of basic com
munications is necessary for report writing. Clearly It should be clear that appraISIng is a discipline
the appraising of gems and jewelry is outside the separate from gemology, with a recognized education
scope of gemology and requires much more of the and certification program for the appraiser to follow.
gemologist/appraiser than just knowledge of gem As with any professional certification, however, mas
stone identification and grading. Similarly, the jew tery of principles and methods and allegiance to a
eler who appraises needs to know more than the code of ethics are only the start. Education must re
product. Although formal education in gemology main on a continuing basis for the appraiser to keep
and practical trade experience lay the groundwork, up with developing techniques, legal matters, and to
formal appraisal training is necessary to complete the hone professional skills to a fine point.
framework for a professional appraiser.
Several jewelry trade, gemological, and appraisal Gemological and Appraisal Organizations and
groups have considered the qualifications a profes Designations
sional appraiser must have and list the following basic In the early 1980s, only a handful of gemological
requirements: and appraisal associations offered designations of
members. With the recent proliferation of appraisal
1. Formal education in gemology societies, however, the industry has found itself sub
2. Training in principles of valuation merged in an alphabet soup of acronyms. It would be
3. Training in evaluating various manufacturing in the best interest of all concerned if each association
methods and society required stringent testing and/or educa
4. Experience in buying and selling tion of its members, but some do not, the only entry
5. Knowledge of various levels of value and how they requirement being a fee. The following list should