Some scholars argue that the very first auction occurred when Joseph of the Many-Colored Coat was sold into slavery by his brothers, however the first generally accepted auctions occurred in Babylon in about 500 B.C. In those times an auction was held annually, and women were sold on condition that they be married. Beautiful maidens engendered lively bidding, but less comely women had to pay a dowry to be accepted and thus the price could be negative.

Ancient Romans also auctioned goods. Those auctions were held in the "atrium auctionarium", and the trading was carried out by four functionaries: the dominus, on whose behalf the property was sold; the argentarius, who organized, regulated, and possibly financed the sale; the praeco, who advertised and promoted the auction as well as conducted the bidding; and the emptor, the highest bidder (recall caveat emptor, let the buyer beware.). It is not known whether the auctions were ascending or descending, but ascending is presumed since auctus means increase. Bidders normally did not call out openly, but rather winked or waved to indicate a bid.

After a military victory a Roman soldier would plant his spear in the ground to mark the location of his spoils. Later he would put these goods up for sale at auctions. The now-rare term, subhastation, meaning a sale by auction, came from the Latin, subhastare (to sell by public auction) which in turn comes from sub (under) and hasta (spear). Subhastare--under the spear. Roman business agents were said to have accompanied warriors into battle to facilitate the expected sales.

The Romans also used the auction to liquidate property. Marcus Aurelius is said to have auctioned off prized heirlooms and furniture (that auction lasted over two months).

One of the most astonishing auctions in history occurred in the year 193 A.D. when no less than the entire Roman Empire was tossed on the block by the Praetorian Guard. First they killed Pertinax, the emperor, and then they announced that the highest bidder could claim the Empire. Didius Julianus outbid all comers and became the emperor for the price of 6,250 drachmas per Guard. Unfortunately, he was beheaded a mere two months later when Septimus Severus conquered Rome. Julianus may have been the first victim of winner's curse or could that have been buyer’s remorse.  Later, the Empire was restored to the people.

Less is understood about the auction as used in other civilizations. It is known that the auction was one of the four money-raising institutions (the others being pawnshops, mutual financing associations, and lotteries) used by Buddhist temples and monasteries, and as early as the seventh century, the possessions of deceased monks were sold on the block.

The earliest reference to the auction as practiced in Great Britain is from an entry in the 1595 Oxford English Dictionary, but nothing more is known until the final years of the seventeenth century. At that time auctions were held in taverns and coffeehouses to sell art. It is likely that such auctions were held daily and that catalogs, announcing the availability of certain merchandise, were printed.

The firm of Sotheby's was established in 1744, and Christie's was founded in 1766.

Terms of sale were largely the same in the eighteenth century as now:

1. Bidder is the buyer. If a dispute arises as to which bid is highest, goods will be put up for sale again.
2. No bidder may advance another's bid by less than six pence when the amount offered is less than one pound, or by less than one shilling when the price is one pound or more.
3. Merchandise for sale is warranted as perfect, and before removing goods from premises, any buyer may accept or reject them.
4. Each buyer must give his name and make a deposit of 5 shillings on each pound sterling (if demanded); no deliveries will be made during the sale.
5. All purchases must be taken away at the buyer's expense, and the amount due shall be paid within three days of purchase.
6. Any would-be buyer unable to attend the sale may have his commission executed by a representative of the auction firm.

One seventeenth century catalog describes a process called "mineing", which was similar to the Dutch auction because the auctioneer started the bidding high and worked down. A lot was claimed when someone yelled, "Mine". There was an interesting twist though. After the bid descended to the point where a bidder claimed an item, the bidding actually resumed but this time in an ascending format. So the bids went down and then back up again.

The auction migrated to America where it was used for high demand items, to liquidate goods and to sell unsalable goods at the end of a season.  Clapboarding, brought from England to cover log homes, was auctioned by ship captains on the beach.  Domestic animals have been sold this way as have tobacco, natural resources, horses, debt, credit, and, of course, slaves.

Copyright © 1996, Agorics, Inc.