Saturday, October 07, 2006


1892 U.S. land auction marketed by extensive foldout brochure
By Robert A. Doyle, CAI, ISA, CES, CAGA

50th President of the National Auctioneers Association
Principal Auctioneer/Appraiser Absolute Auction & Realty, Inc.


Robert A. Doyle

CAI, ISA, CES, CAGA

It is my opinion that the auction method of marketing was the key to the successful expansion and economic development of America. The entrepreneurial spirit of early settlers coupled with the auction method of marketing allowed for fair and rapid growth and development of territories, states, counties, cities and villages.

One example of such planned and rapid growth can be glimpsed by studying an original 1892 folded auction brochure that is titled “Sale of Lots in the Hot Springs Reservation.” Further, “Good Opportunity to Invest, Auction of City Lots at Hot Springs, Ark., By The U.S. Government April 12 th 1892 at 10 O'clock A.M. and continuing from day to day thereafter.”

The 4” x 9” folded brochure opens to 27 x 28, being double sided. One side is a plat map of the entire city with shaded parcels indicating the 326 city lots that would be sold at absolute auction, no minimum or reserve. The other side has 18 panels providing a tremendous amount of information on the city, surrounding area, improvements, statistics, infrastructure, history, auction terms, benefits to investing and more. The information provided would rival any due diligence package produced by today's professional real estate Auctioneers.

The brochure has only one advertisement. The single panel promotes the “ Iron Mountain Route ” trains that run daily from St. Louis to Hot Springs . The advertisement boasts “Solid Trains of Free Reclining Chair Cars and Pullman Buffet Sleeping Cars.” The ad refers to Hot Springs as “The Sanitarium Pleasure Resort of a Continent.”

The map side of the document is titled “Map of the Hot Springs Reservation in the State of Arkansas as surveyed and laid out according to act of Congress approved March 3 rd 1877 . The map was completed in December of 1879. The scale of the map was 100 feet per inch. The bottom border of the map has large lettering “Unsold Lots Colored” and “Map of Government Property of Hot Springs to be Sold at Auction, April 12, 18 92 .”

Each of the 18 panels of the brochure provides significant information for the potential investors. Overall, they provide much more information then would typically be presented today. For instance one panel reveals the acreage of each of the surrounding mountains, another panel provides a chart of the “Analyses of the Waters of the Hot Springs of Arkansas” with the breakdown by percentages of the various minerals in each of the known and named Springs. Information is provided on “Government Improvements,” “Reservation Improvements” and “General Improvements.”

Further, the brochure provides information on the curative value of the waters, the names of all the bath houses and numbers of tubs in each, the numbers and names of hotels, churches, schools, banks, business houses, water works, street railway, roads and more.

The terms for the Auction were simple, “Each lot will be sold separately. The purchase money must be paid at the time the lot is knocked down to purchaser, or the lot may be reoffered then or thereafter. For cause deemed sufficient by the officers acting for the Government at the sale, approved by the Secretary of the Interior, the sale may be discontinued or adjourned to another date.” Note: The Secretary of the Interior had the authority to direct a sale of any and all land that was not deemed restricted. The brochure states The Superintendent, who has been appointed by the Secretary of the Interior to safeguard and manage the Reservation, in his report for 1891 says, ‘I would respectfully recommend that an appraisement and public sale of a portion of the unsold lots be ordered for March or April of 1892.”

Reason for the auction
The main reason to conduct the auction was to raise capital for further government improvements. “The Government has already expended a large amount in the improvement of the Hot Springs Reservation (Not to be confused with an Indian Reservation), has added much to its beauty and greatly increased its usefulness as a sanitarium and pleasure resort. Much has been done, but there is much still to be completed. When, however, the government work is accomplished and private capital has kept pace, which it will do, there will be one of the grandest resorts here, both for pleasure and health, during the entire year, that the world knows.”

According to a contemporary Hot Springs website, “Congress established Hot Springs Reservation on April 20, 18 32 to protect hot springs flowing from the southwestern slope of Hot Springs Mountain . This makes it the oldest park currently in the National Park System, 40 years older than Yellowstone National Park . People have used the hot spring water in therapeutic baths for more than 200 years to treat rheumatism and other ailments. The reservation eventually developed into a well-known resort nicknamed "The American Spa" because it attracted not only the wealthy but also indigent health seekers from around the world. Today the park protects eight historic bathhouses with the former luxurious Fordyce Bathhouse housing the park visitor center.

The entire "Bathhouse Row" area is a National Historic Landmark District that contains the grandest collection of bathhouses of its kind in North America . By protecting the 47 hot springs and their watershed, the National Park Service continues to provide visitors with historic leisure activities such as hiking, picnicking, and scenic drives. Hot Springs Reservation became Hot Springs National Park by a Congressional name change on March 4, 19 21 .”

Obviously the 1892 Government Land Auction of city lots was a success. This brochure is proof that the auction method of marketing was the best mechanism to bridge governmental planning with the private, entrepreneurial spirit, resulting in expeditious growth and development.

This is a great example of the free enterprise system at work. In 1892 the federal government trusted the auction method of marketing. It sold 326 city lots without minimum or reserve to acquire working capital to be used for additional improvements. Further, the federal government believed in the free enterprise system and in its citizens. A mix of planned growth and the free enterprise system has had positive results.

The year round population of Hot Springs in 1892 was estimated at approximately 12,000, which grew to 36,566 by 2003.

The auction method of marketing real estate is still working well today in Hot Springs , AR. But, don't take my word for it, check out upcoming real estate auctions by going to www.auctioneers.org and searching for auctions in Hot Springs , AR. You may have missed the 1892 auction, but it's not too late to get your bid card in the air for a contemporary property.

2006-03-11

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