Art-backed securities: The Federal Reserve’s Art Collection | The Economist, May 7, 2013
The Federal Reserve’s art collection
“IT IS my urgent desire that the growing partnership between government and the arts continue to be developed to the benefit of both.” These are not the words of a left-wing cultural elitist from New York, but of President Richard Nixon in an intergovernmental memo from 1971. In this memo Nixon demanded that the heads of departments and agencies ask themselves how each “can most vigorously assist the arts and artists” and think on how “arts and artists can be of help to your agency and to its programs.”
One of the most enthusiastic responses to Nixon’s appeal was from Arthur Burns, chairman of the Federal Reserve Board who created the Fed’s Fine Arts Program in 1975. Nearly forty years on, the Fed’s art collection—with over 1,400 paintings, photographs and sculptures spread throughout its three buildings—is one of the best-kept secrets in Washington, DC.
The Fine Arts Program does not use government money to buy art. Instead artworks are amassed through donations, or bought with monies donated for the explicit purpose of buying art. This sets it apart from other governmental art programs (such as the state department’s Art in Embassies program) which rely on appropriated or budgeted funds. Aside from this parsimonious quirk, Stephen Bennett Phillips, the program’s director, suggests it is best to “think of it as a museum.” Indeed, its advisory panel includes the sort of society doyennes, art dealers, lawyers and industrialists that any major museum would be proud of. But who would donate to the Fed when they could donate to, say, the National Gallery of Art down the road? “If you donate to a large museum, probably 99% of the time your work is going to be in storage,” says Mr Phillips. “What we can provide is the opportunity for the works to be seen and appreciated on a daily basis.” It is an opportunity that seems to be increasingly popular.
Since 2007, the year of Mr Phillips’ arrival, the collection has more than doubled in size. This reflects the high-wheeling connections the director brought with him from his former job as a curator at the nearby Phillips Collection, a well-funded private museum. But it also seems, in part, to be a side-effect of the burgeoning art market of the last decade. Since capital-gains tax on the sale of art and collectibles is taxed at a higher rate than that of stocks and bonds, the benefits of donating art and claiming a tax deduction, have never been more attractive. (The Fed does not accept gifts from individuals or organisations that it regulates).
The Fed does not sell any of its art. But like any other museum it loans out its collection and puts on three special exhibitions a year that can be viewed by the public (by appointment only). But Mr Phillips stresses that its main mission is to enrich the working environment at the Fed. Behind the grand classical exterior of the Paul Philippe Cret-designed main building, the Fed is much like any other office—endless white corridors, monolithic brown filing cabinets and rows of photocopiers. So it is something of a delight to find a colourful Robert Rauschenberg assemblage, “Sling-Shots Lit #3” (1985), floating opposite the lifts. With its multiple layers of transparencies depicting an Indian god, a motorcycle engine, a store calendar and soda bottles, it seems to suggest interconnectedness between people, the divine and the material. It is a fitting piece for an institution whose economic proclamations are often treated with holy reverence. Similarly a strip-lit lobby with a worn chartreuse carpet is enlivened by a temporary exhibition of colourful floral micro-photography by Bert G.F. Shankman. Since Mr Phillips’ arrival the Fed’s collection of photography has grown and now includes works by Weegee, Alfred Stieglitz, Robert Frank and William Eggleston.
The main venue for temporary exhibitions is grander. In the two-storey marble atrium, with dual staircases and Art Moderne details, hangs two enormous gems from the collection: Helen Frankenthaler’s colourful abstract, “Three Color Space” (1966), which was donated by Nelson Rockefeller and may be the most valuable artwork in the collection; and Robert Kushner’s “American Tapestry” (2008, pictured above right), which is a diptych of native grass and flowers embellished with gold leaf and mica that emits a restrained but knowing opulence.
The collection is not without humour. Outside the board of governor’s boardroom hangs a small trompe l’oeil painting by Victor Dubreuil entitled “Barrels of Money” (c.1897). Indeed paintings of currency are one of the few cogent themes in what is, by virtue of the program’s acquisition protocols, a remarkably eclectic selection.
And what of the chairman’s own art tastes? Whereas Alan Greenspan and Paul Volcker decorated their offices with traditional landscapes, Ben Bernanke prefers the abstract.“Samarkand Stitches #IV” (1988), a large vibrant textile assemblage of silks by Robert Rauschenberg, hangs above his fireplace. Would Nixon have approved? Probably not. Despite his call to assist the arts he was not in step with them. In a private memo written the year before his art directive, Nixon called modern architecture “decadent”, referred to artworks loaned by the Museum of Modern Art as “little uglies”, and railed against what he termed, “the incredibly atrocious modern art.”