0.9 Chapter seven: retrenchment and the struggle for survival, 19  (Page 3/20)

Negotiations between the library and the Society bogged down. As a non­profit institution with a fiduciary responsibility to protect assets held in public trust, the New York Public Library had to approach the loan with extreme caution. Dis­cussions were at an impasse on several points, including the total amount of col­lateral required (NYPL wanted 300 percent, or $4.5 million), how much of the collateral would have to be formally deaccessioned at the closing (NYPL wanted 50 percent), and whether the loan would be provided as a line of credit (NYPL's preference) or cash up front. At this point, Wendell Garrett, a member of the Society's board and a senior vice president of Sotheby's, suggested that perhaps Sotheby's would be willing to loan the Society the money under more flexible terms. Negotiations that the Society and the NYPL had been unable to com­plete in nearly a month were completed in two-and-a-half days. Sotheby's agreed to loan the Society $1.5 million for a period of one year. It required 200 percent ($3 million) of the loan amount in collateral and was willing to provide the Soci­ety with the full amount in cash at the closing. Although the Sotheby's deal was agreed to by all parties in mid December, it was decided that it would not be announced publicly until after the Society's January board meeting.

Everyone was aware that this unusual liaison between an auction house and a museum would be controversial. The Society explained that the Sotheby's loan was "an extraordinary goodwill gesture to a troubled institution that has been get­ting very little support from the traditional sources."

Despite efforts to make the situation palatable, museum administrators were critical of both the loan and even the basic concept of putting collections up as collateral for a loan. Robert MacDonald, director of the Museum of the City of New York and a past president of the American Association of Museums, said, "The museum has jeopardized its soul. Losing a collection like this that relates to the city of New York would be a major tragedy." He added that use of a museum's collection to raise money would be "contrary to long-held ethical standards unless the money was used for new acquisitions." Steven Miller, director of the Western Reserve Historical Society in Cleveland, said: "The collection is a pub­lic trust. You don't turn it over to the development office."