In December of 2010, a time of year when most people wait excitedly for gifts and packages to show up on their doorsteps, Carl Soderstrom remembers anxiously anticipating a very different kind of delivery.
"I kept asking myself how they deliver these things," Soderstrom, 47, says. "Would it show up in a Brink's truck or something?"
The package, which arrived in a carefully packed FedEx box, contained Soderstrom's first foray into his new hobby -- collecting letters signed by sitting presidents. He paid $3,900 for a handwritten letter from President Franklin Roosevelt to Mount Rushmore sculptor Gutzon Borglum. After Soderstrom, who lives in Dallas, got the Roosevelt letter and held a slice of history in his hands, he knew he was hooked. He now owns letters from 36 of the 44 presidents.
Soderstrom spent 14 years building a healthcare management company called PhyServe Physician Services Inc. before selling it about a year ago to Texas Health Resources Inc., a Dallas-based healthcare company. "Before that, I didn't really have the money to play in this little game," says Soderstrom, who now spends his time investing.
The most he's ever paid for a document is the $90,000 he shelled out for a William Henry Harrison letter. The ninth president's letters are valuable because they're so rare -- he died of pneumonia less than a month after taking office.
Soderstrom says he's "picky" about the kinds of letters he invests in -- no thank-you notes, military appointments or letters declining speaking invitations. The documents should contain some kind of meaningful historical context, he says, like the one he owns from Abraham Lincoln, written in July of 1863 after the Union Army won the Battle of Gettysburg. Lincoln wrote the letter to ask for more troops. "I sit and stare at that letter," Soderstrom says. "You just get a glimmer of what it might have been like to be in the shoes of these men. It's just mind-blowing."
Soderstrom's presidential letters fall into a category of patriotic collectibles known as rare historical documents, highlighted recently by two multimillion-dollar auction sales that shattered estimates. Last month, a volume of George Washington's personal copies of the first acts of Congress and other early documents sold for nearly $10 million. The price, which blew the $2 million to $3 million estimate out of the water, set a new record for an American president's documents.
Separately, a copy of the Emancipation Proclamation, estimated to sell for between $1.8 million and $2.4 million, went for $2.085 million at a June 26 auction. The buyer: David Rubenstein, co-founder of the Carlyle Group, who plans to display the document at a public institution in Washington.
While those two auctions, which involved particularly valuable documents of great historical significance, closed for millions of dollars, the market for historical documents is one where investors can still buy valuable pieces at relatively low prices. And experts say it will only continue to grow. "The auction market is thriving," says Devon Gray, the director of fine books and manuscripts at Skinner Inc., a Boston-based auctioneer and appraiser. "Maybe what's happening is more books are being liberated from collections. For people who invested in the past, if it doesn't make sense to hold those assets and they're valuable, then they let go. Now suddenly things are available that were previously unavailable."
Compared to collecting art, documents are a "much, much smaller field," says Seth Kaller, a historical artifact dealer and president of White Plains, N.Y.-based Seth Kaller Inc., the firm that handled the recent Emancipation Proclamation sale with Robert A. Siegel Auction Galleries Inc. in New York. He says it's a good time for new investors to get in the market and purchase items that would have been snatched up in the past. "Somebody new will realize that for the price of an Impressionist painting, you could have a world-class collection of important historic documents that your favorite museum or alma mater would love to have," he says.
Once that happens, it will be "much harder for individuals to compete," Kaller says. "Right now it's just a great opportunity."
That's partly because some of the more prolific collectors have either moved on or passed away. The estate of Richard Dietrich, for example, a collector who died in 2007, sold the George Washington documents auctioned off by Christie's Inc. last month. Chris Coover, a specialist in manuscripts and Americana at Christie's, agrees that the market for documents moves in a cyclical pattern.
"I've seen it very strong," Coover says, referring to the 1970s when collector Philip Sang "caused a frenzy" with his purchases, and a decade later when publisher Malcolm Forbes was building his collection. "It's a narrow-enough market that without those big spenders, it's much less buoyant," Coover says.
Though the current market is lacking some of that buoyancy, the hefty closing prices at the recent presidential auctions could help turn things around. The Washington book's closing price "could make it easier for some people who routinely see eight-figure prices for art realize the importance and value of historic documents," Kaller says.
Like many other collectibles, rare historical documents represent a two-tiered market, according to Kaller. "The things at the top of the market have been achieving record prices," he says, while the low end has suffered in the past 10 years, partially because auction website eBay.com has made rare documents easier to find.
Investment trends and closing prices aside, investors seem to be motivated by a sense of nostalgia and romance. According to Gray, buyers are often drawn toward owning a "tangible and direct" connection with the past. "When you care about history, it's easy to get excited about even just the stories. So when you can hold it in your hands or have a direct connection with someone who you admire in history, it makes it much more real."
Avid collectors are like sports fans -- attracted to the magic of the documents and the stories they tell, Kaller adds. "We all read about Lincoln and have heard about the Emancipation Proclamation, but the idea that you can actually own one, buy one -- there's that connection just like people who love sports collect sports autographs."
For instance, a heated bidding war broke out in the final minutes of the June 22 auction of the Washington book between Mount Vernon Ladies' Association representative Ann Bookout, quick to increase her offers when challenged, and an unnamed bidder across the room, who took a longer time to raise his paddle during the back and forth. He eventually folded, and Bookout's bid of $8.7 million, or $9.83 million after fees, prevailed.
The documents are headed back to their "rightful home," Bookout told reporters after the auction, referring to Washington's Virginia plantation. The book will be displayed in Mount Vernon's new Fred W. Smith National Library for the Study of George Washington when it opens in 2013, she said.
"There are many things that Americans have that we would like to bring home," she says, adding that the recent acquisition at Christie's was the largest purchase made so far.
The book of documents was in the library at Mount Vernon after Washington's death in 1799 but was sold at auction in 1876, according to Christie's. The Heritage Foundation in Deerfield, Mass., then acquired it before Dietrich bought it in a 1964 auction for $27,000, according to Coover.
The Emancipation Proclamation recently purchased by Carlyle's Rubenstein bears signatures of Abraham Lincoln, Secretary of State William Seward and the president's private secretary, John Nicolay. Though the Emancipation Proclamation was originally signed in 1863, this copy was created the following year and then auctioned off at the Philadelphia Great Central Sanitary Fair to raise money for Union troops, according to the press release issued by the auction house. The U.S. Sanitary Commission, an agency that worked to raise money for wounded soldiers and to provide wartime supplies, organized fairs to encourage Northerners to donate time and money to the war effort.
According to the auction house's documents, Lincoln donated the original signed draft of the Emancipation Proclamation for Chicago's Great Northwestern Fair with an accompanying letter explaining his "desire to retain the paper" but noting that "if it shall contribute to the relief or comfort of the soldiers, that will be better." It sold for $3,000 but was later destroyed in the Great Chicago Fire. The copy that sold in late June was previously owned for four decades by a private investor, according to Kaller, who declined to name the person or family.
Another recent auction, focused more on Americana lore than historical documents, brought in more than half a million dollars for about 100 personal items belonging to legendary sharpshooter Annie Oakley. The items, sold on June 10 at Heritage Auctions Inc. in Dallas, included three of Oakley's guns, as well as photographs, letters and promotional items.
Tom Slater, director of Americana auctions at Heritage Auctions, says that, as with the historical document sales, a personal connection drove people to bid on the items.
"There's always been a magic about Annie Oakley -- she was a very cute, spunky, sparkly personality and people related to her," he says. "She's one of those names that has remained familiar to people." Familiar enough that someone was willing to shell out more than $143,000 for one of her shotguns.
Beyond romantic notions of owning a piece of history, buyers also hope their purchases will prove to be good investments, appreciating in value through the years. "There's been consistent long-term appreciation of value if you buy the right material," says Christie's Coover. "If you buy good presidential material, you have little to fear."
Malcolm Forbes' collection brought in nearly $41 million when it was auctioned off between 2002 and 2006, according to Christie's. The collection included a letter from Albert Einstein to Franklin Roosevelt, which Forbes bought in 1986 for $220,000, according to the auction house. It sold for $2.096 million in 2002. Forbes bought a pair of Lincoln's brass opera glasses, carried by the president at Ford's Theatre the night he was shot, for $22,000 in 1979. They sold for $424,000 in a 2002 auction.
Kaller says once investors have held on to items for 10, 20 or 30 years, values go up "exponentially," but he recommends that people never buy documents with money they might need quickly.
Americana Exchange Inc., an online database that tracks auction sales of historical documents, reports that during the past five years, the median auction price peaked in March 2008 at $500. The database calculates median values instead of average ones so that big-ticket sales don't skew the data.
"The market had been flush with cash, and people at the margins were investing big money," says Bruce McKinney, who founded Americana Exchange 10 years ago in San Francisco. "As the stock market declined, we saw a substantial decline in confidence."
The decline bottomed out in April 2011 with a median auction price of $350. "We are in a recovery now, but prices are coming back from a much lower level, and they're coming back slowly," McKinney says.
According to Skinner's Gray, people also invest in collectibles such as antiques and books as a way to diversify. "It's a good way of having a reliable asset in their portfolios, and it's also something that looks nice that you can show to people. It's not quite the same as saying, 'Oh, look at my stocks,' " she says with a laugh.
For Soderstrom, the investment opportunity of his presidential letters is a secondary benefit; he primarily buys them for fun. "I of course have every belief that they're worth what I paid," he says, warning that investors can't turn a quick profit on documents. "If you really want to get your money or more out of it, you would need to hold the document at least five years so that anybody who once saw it and liked it doesn't have the feeling that it's readily available," he says.
He plans to hold his documents until it makes sense to sell. "What I'm striving for is to have a complete collection." Soderstrom says. "But I am certain that over decades they will go up in value. If I got an offer that was significantly above what I paid for one of them, I'd sell. And then I'd just go find another one."
And the search would continue for his next Americana treasure.