AUCTIONS AND AUCTIONEERS. An auction (Lat. auctio, increase) is a proceeding at which people are invited to compete for the purchase of property by successive offers of ad vancing sums. The advantages of conducting a sale in this way are obvious, and we naturally find that auctions are of great antiquity. Herodotus describes a custom which prevailed in Babylonian villages of disposing of the maidens in marriage by delivering them to the highest bidders in an assembly annually held for the purpose (Book i. 196) . So also among the Romans the quaestor sold military booty and captives in war by auction—sub haste— the spear being the symbol of quiritarian ownership. The familiar ity of such proceedings is forcibly suggested by the conduct of the Praetorian Guard when Sulpicianus was treating for the imperial dignity after the murder of Pertinax. Apprehending that they would not obtain a sufficient price by private contract, the Praetorians proclaimed from their ramparts that the Roman world was to be disposed of by public auction to the best bidder. Thereupon Julian proceeded to the foot of the ramparts and outbid his competitor (Gibbon, vol. i. ch. v.) . Though, however, auctions were undoubtedly common among the Romans both in public and private transactions, the rules whereby they were governed are by no means clearly enunciated in the Corpus luris Civilis.
In England the method of conducting auctions has varied. In some places it has been usual to set up an inch of lighted candle, the person making the last bid before the fall of the wick becom ing the purchaser. By an act of William III. (1698), this method of sale was prescribed for goods and merchandise imported from the East Indies. Lord Eldon speaks of "candle-stick biddings," where the several bidders did not know what the others had offered. A "dumb bidding" was the name given to a proceeding at which a price was put by the owner under a candlestick with a stipulation that no bidding should avail if not equal to it. In a "Dutch auction" property is offered at a certain price and then successively at lower prices until one is accepted.
According to the practice now usual in England, a proposed auction is duly advertised, and a printed catalogue in the case of chattels, or particulars of sale in the case of land, together with conditions of sale, are circulated, Sometimes, in sales of goods, the conditions are merely suspended in the auction room. At the appointed time and place, the auctioneer, standing on a desk or rostrum, "puts up" the several lots in turn by inviting biddings from the company present. He announces the acceptance of the last bid by a tap with his hammer and so "knocks down" the lot to the person who has made it. Sometimes property is offered on lease to the highest bidder. "Roup" is the Scottish term for an auction. A bid in itself is only an offer, and may accordingly be retracted at any time before its acceptance by the fall of the hammer or otherwise. Puffing is unlawful. Unless a right to bid is expressly reserved on behalf of the vendor, he must neither bid himself nor employ anyone else to bid. When a right to bid has been expressly reserved, the seller or any one person (but no more) on his behalf may bid at the auction. If it is simply announced that the sale is to be subject to a reserved or upset price, no bidding by or on behalf of the seller is permissible: it is only lawful to declare by some appropriate terms that the property is withdrawn. Where a sale is expressed to be without reserve, or where an upset price has been reached, the auctioneer must, after the lapse of a reasonable interval, accept the bid of the highest bona fide bidder. By not doing so he would render the vendor liable in damages. The auctioneer must not make a pretence of receiving bids which are not in fact made, as it would be fraudulent to run up the price by such an artifice. A "knock out" is a combination of persons to prevent competition between themselves at an auction by an arrangement that only one of their number shall bid, and that anything obtained by him shall be afterwards disposed of privately among themselves. With a view to the suppression of such "rings," the Auctions (Bidding Agreements) act, 1927, was passed by the British parliament.
A "mock auction" is a proceeding at which persons conspire by artifice to make it appear, contrary to the fact, that a bona fide sale is being conducted, and so attempt to induce the public to purchase articles at prices far above their value. Those who invite the public to enter the room where the supposed auction is proceeding, or otherwise endeavour to attract bidders, are called "barkers." A conspiracy to defraud in this way is an indictable offence.
The Auctioneer's Licence.—By a charter of Henry VII., confirmed by Charles I., the business of selling by auction was confined to an officer called an outroper, and all other persons were prohibited from selling goods or merchandise by public claim or outcry (see Henry Blackstone's Reports, vol. ii. p. 557). The only qualification now required by an auctioneer is a licence on which a duty of £ 1 o has to be paid, and which must be renewed before the 5th of July in each year. A liability to a penalty of f 1 oo is incurred by acting as an auctioneer without being duly licensed. An auctioneer is bound under a penalty of £20 to see that his full name and address, together with a copy of the Auctions (Bidding Agreements) act, 1927, are displayed before the commencement of an auction and during its continuance in the place where he conducts it. He is the agent of the vendor only, except in so far that, after he has knocked down a lot to the highest bidder, he has authority to affix the name of the latter to a memorandum of the transaction. so as to render the contract of sale enforceable where written evidence is necessary. An auctioneer does not by merely announcing that a sale of certain articles will take place, render himself liable to those who, in con sequence, attend at the time and place advertised, if the sale is not in fact proceeded with, provided he acts in good faith. One of the chief risks run by an auctioneer is that of being held liable for the conversion of goods which he has sold upon the instructions of a person whom he believed to be the owner, but who in fact had no right to dispose of them.
The number of auctioneers' licences issued during the year ended March 31, 1937 was 7,033. A central organization with head quarters in Lincoln's Inn Fields, London, the Auctioneers' and Estate Agents' Institute of the United Kingdom, was founded in 1886. The Incorporated Society of Auctioneers and Landed Prop erty Agents was founded later. (H. H.) In the United States the same general principles underlie the control of auctions as in Great Britain. Specifically, they are regu lated by states. A survey conducted by the Better Business Bu reau of Milwaukee, Wis. (1924) in 52 principal cities illustrates this. Eleven did not permit auctions after 6 P.M., the rest closed them from 6 to 12 P.M. ; some required no license fee, a few de manded a percentage, others a fixed amount for a specified time, i.e., Tacoma, Wash., $1,000 a year, $50 a day. A majority per mitted more than one jewelry auction in a given store the same year, and allowed auctions to run any number of successive days; a few fixed 3o, Pittsburgh, Pa., 7-10 days as the limit. About 5o% demanded from short, indefinite periods to 1 year of residence from merchants of jewelry auctions. Control of fraud and switch ing varied from requiring bonds or stock permits, imposing fines or revoking licenses to applying false pretences laws or merely "watching." Several cities demanded $2,500 bonds to ensure auctioneer's good faith, some $zoo annual license fee, others twice the amount sold. Street auctions are limited or barred entirely. Some cities enforce transient merchant laws ; others have drafted ordinances. The Mastick-Goodrich law of New York was passed in 1927 to regulate auctions. Efforts against fraud have centred especially on jewellery sales, the greatest breeders of fake and mock auctions.