Militaria Collectibles Original Period Items

Soviet Order

Soviet Order

JEWELRY OF THE SOVIET UNION

Dmitry Tamoikin

2009

JEWELRY OF THE SOVIET UNION ©

Gold – or, more precisely, gold jewelry – made by the Soviet Union is one of the most promising, yet overlooked, antiquity and collectible markets today. For anyone who wishes to make a highly profitable investment or gain an extremely valuable collection, while spending a relatively small amount of money, Soviet jewelry is a gold mine that must be explored.

Naturally you ask – why? What is so special about jewelry made by a group of countries that denounced the lavish and rich lifestyle which gold so perfectly represents? Well, for starters, it is precisely this paradox, this controversial ideological history, that each unique item of Soviet jewelry possesses – and no other item has or will ever have. I hope this piqued your interest. Let’s start from the beginning.

All Soviet jewelry, especially that made from gold, has everything that collectors and investors desire and demand. First, it has an incredible and controversial history, known world-wide. Second, it has clear provenance. Third, it is rare. Fourth, it is made from valuable materials (gold with precious and semi-precious stones). Fifth, it is of unique design. Sixth, prices are relatively low today, with a quickly narrowing market, meaning higher prices tomorrow. Seventh, it has an easy promotional, marketing and commercial basis (the USSR has been a focus of Hollywood for decades). And finally, eighth, it has no negative aspects or any minuses at all. Actually, Soviet jewelry has even more positives than these eight, but let’s continue…

It’s well known that the market for Soviet Art has been breaking records for the past 16 years straight, with artworks selling for millions of dollars at prominent auction houses like Sotheby’s and Christie’s. The less-established but parallel market for Soviet jewelry has all that potential and more, considering that in many ways it is the same art – but made of gold and precious stones!

A question arises: Why, with all this potential, is Soviet jewelry still priced roughly the same as modern jewelry? Before the answer is given, let me mention that as a buyer I favor the current situation. It allows collectors like me to buy large numbers of items at extremely low prices, and I know for a fact that this will not continue for long. When prices jump – and they inevitably will – I will have more than enough to sit back, relax and let my assets grow. It’s like investing in shares of a newly-found Klondike gold mine right next to the White House. All right, so why are prices so low, and why has no one thought of this before? More importantly, what guaranties and signs are there that prices will not just rise, but rise tremendously?

The answers lie in the countries of origin, all former Soviet republics. Russia is currently undergoing a new phase of open markets, and a very large variety of products, including gold and especially jewelry, is widely available all over the country. Major jewelry manufacturers, such as Tiffany & Co., are now represented in Russia, and their sales exceed all expectations. Moscow has become one of the world’s most expensive cities in which to live. Average Russians have begun to leave poverty behind, and after a long time the middle class has started to spend money. Quite naturally they do not think about investing in the familiar items they have lived with for so long – they are buying the new and modern products that are seen to have style and class. Russia wants to show off; people want and can buy top European brands; and many are fully inclined to sell the old jewelry that has been lying in their drawers for decades, especially with prices for gold rising weekly. To summarize, “Russia does not want old and Soviet, it wants new and preferably Armani.”

A direct result of this mentality is that few people are looking at what is happening to the jewelry that is still left – and people who realize this have already begun quietly collecting everything they can get their hands on. These people are not necessarily Russians. With the help of eBay such small items travel quickly around the globe, mainly to the United States.

Now, to those of you who are familiar with the Russian antiquity market, I’m not saying it is not moving ahead. Far from that! The Russian antiquity market, despite strict and uncomfortable government regulations, has grown tremendously in the past few years. Wealthy Russians all over the world are now buying everything they can get. They are in London, Paris, New York, Hong Kong… rivaling and outbidding top collectors by millions of dollars. But look at what they are buying: Their main focus is anything that was created during the Czarist period or before 1917, while second in favor is the antiquity of Europe. Soviet items do spark big interest, but only when they are of very top class.

This brief Russian market analysis is given to show the reader what a big mistake even the top Russian collectors are making, and it is clearly seen in the course chosen by their counterparts, the European and especially American collectors who have much more experience in the antiquity market. I’m talking about the massive flow of Soviet goods of all types from former territories of the Soviet Union to countries like the United States (#1 buyer), the entire European Union, China (Hong Kong), Japan, Australia, and many others. It seems, and I’m also talking from personal experience on and off eBay, that everyone wants and will buy anything Soviet. When I say everything I mean everything, from the top Soviet technology and extremely rare memorabilia to an average phone plug or bottle cap, things considered and treated as garbage in the former USSR. In fact, so much of this “garbage” is destroyed in the former Soviet territories by average people who simply have no interest in it, or knowledge of its value, that the total might easily equal the GDP of a small country. And Soviet gold gets no better handling, as I’ll explain shortly.

Now, it’s no secret that Russians today are buying at top market prices from Europeans and Americans what they sold them only ten years ago for less than a nickel, because ten years ago they considered it junk… and it turned out to be Faberge. Of course I’m simplifying the matter, but the tendency is the same with items from the Soviet era. Today no one cares about them; tomorrow all will want them. The best part for collectors is that these ten years are coming to an end, and Russians are again not reacting. Well, if you don’t catch a bus you’re forced to take a cab… and the result is the same but you just pay more. I’m writing this as a wake-up call to collectors who wish to take a nearly-empty, comfortable bus. It’s the last one this cheap.

I’ve covered Russia, but what about former USSR members? Well, the situation is identical or worse. Asian counties have traded, sold or melted down much Soviet jewelry (gold) for quick profit, and European, new or upcoming Union members despise the Soviet regime so much that their sound judgment (towards profit!) is clouded by their political and personal views. In any case, former USSR republics tend not to value their historical possessions at all, especially in the Eastern Europe, where, for instance, they don’t buy jewelry with red rubies because red is “naturally” associated with the Soviet regime. One can see the happy faces of European, American and Asian tourists when they buy whatever little Soviet jewelry is left in pawn and jewelry shops at low prices. It is as if they are winning a million. That’s because when they arrive home to Tokyo or Chicago, they actually are.

There are more scary stories of what was and still is done with Soviet gold, and why there is so little of it left after 80 years of massive Soviet jewelry output. This is what happened. After 80 years of total isolationism, Mr. Gorbachev collapsed the Communist Union and more than 400 million ex-Soviet citizens were suddenly free to travel, buy, sell, trade or do whatever came into their minds. Most of the world preferred dollars to rubles, but dollars were very scarce in the USSR, so these millions of people turned to the only other commodity that was accepted by the rest of the world – gold.

Hundreds of tons of Soviet gold in the form of jewelry left the former USSR, going mainly to three countries: Turkey, Poland and China. These were the top trading centers of anything and everything, where “New Russians,” as people from the former USSR were called there, traded their gold possessions for cheap clothing and other goods that they could sell back home for relatively good profit. As it happened, Turkey, Poland, China and the other countries that received this huge influx of Soviet gold were not enthusiastic collectors, which meant that all this gold was melted down into bars and reused – which is still happening to this day. This is clearly seen in today’s gold jewelry market. Jewelers know that while Turkey, for instance, buys modern gold from Russia, most Turkish gold reserves are in the hands of private gold manufactures and their gold, if one could give this element a nationality, is Soviet.

USSR gemstones deserve their own separate article, but I’ll try to cover some of the key points that collectors and investors should know.

The word on the street is that almost all Soviet jewelry has lab-grown stones, and this is true. In the late 1950s the USSR began to use lab-grown stones rather than precious gems in jewelry items. Yet, while the phrase “lab-grown” tends to make people believe such stones are next to worthless or equal to colored glass, these stones are actually very valuable. Again, this is an incredible opportunity to buy USSR jewelry with such stones at more than acceptable prices. Naturally you ask again – why? Why would lab-grown stones be of any interest to me? Well, if we were talking about average modern or vintage lab-grown jewels then I would fully agree that yes, the value of such stones is modest. However, a lab-grown jewel made in the USSR completely changes the picture.

First, what is the most valuable aspect of any precious jewel or metal (apart from platinum, gold, silver, rubies and diamonds, which have physical characteristics that are used in the industrial sectors)? It is of course their rarity. If platinum was as common as steel, you surely would not pay top dollar for a platinum engagement ring. Now, how many lab-grown jewels were created during the entire Soviet regime? A good estimate is that it would be equal to perhaps one year’s output of DeBeers diamonds. Then distribute these USSR stones (in jewelry) all over the globe, destroy, lose or change 80% of them, and the rest leave up for grabs to jewelers (to be disposed of as a by-product of the gold that surrounds the stone), collectors or other buyers – and what remains is what you get today. Soviet lab-grown jewels are unquestionably rare.

The jewels that were left in their original settings and not replaced or reused in modern items are even rarer, because in most cases the gold was melted down for some other use and the stones tossed in a box to be either reused or eventually lost. The original composition is broken, and so is its historical and commercial value.

I have already mentioned the tremendous historical value of all items created by the USSR, and lab-grown jewels are no exception… but let’s talk science. The Soviet Union had vast amounts of natural riches, including an almost unlimited quantity of natural jewels, yet it chose to develop, from nothing – neither Czarist Russia nor the USSR after WWII had the laboratories and technology to grow any kind of jewels on even a modest scale – a whole new industrial sector that quickly established itself as the world leader. In fact, Soviet jewels remain true scientific achievements to this day. In what ways, you ask? Soviet scientists were able to match so perfectly all the physical characteristics of the natural gems that almost no analogues exist to this day, even with modern technology. What is more fascinating is that they not only matched, but actually improved the durability of almost all the gemstones, making them as strong as they were beautiful.

The following rather extreme experiment was personally shown to me by a jeweler. Take the most common Soviet lab-grown stone, usually a ruby; make sure it is Soviet since not many others would pass the test. Light up a blowtorch – yes, a blowtorch – and direct all 1500 degrees of heat onto your beloved stone. Don’t stop there: Heat it until the stone goes through all the color phases and turns bright orange (like melted steel), then heat it a bit more before finally letting it cool. Relax and see what happened to it – absolutely nothing. The jewel not only returns to its original color but its structure doesn’t change at all… you can repeat the test if you like. By comparison, a natural ruby of the highest quality would crack almost instantly.

You may be thinking, why do I care if my stone can withstand a blowtorch? I wish to wear a beautiful item, not bash nails into walls with it. I couldn’t agree more, yet accidents do happen… and if your 7-carat ruby or emerald accidentally falls on a marble floor, the results can be heartbreaking. Thus, physical characteristics do play an important role in the value of precious items, and especially jewels.

Look at gold and silver: They are not prized only for their rarity; half their value comes from their ability to conduct electricity better than almost any other metal on earth. Gold also doesn’t rust or oxidize. Such qualities make these metals invaluable in aerospace and advanced electronic technologies. Diamonds are one of the hardest materials on the planet, with the ability to cut almost any metal or other hard substance, making them highly prized in the industrial sector. Diamonds and rubies are also extensively used in watch and clock mechanisms.

When big companies or industries buy such items, they buy in bulk, lowering the overall availability of these precious materials and keeping market prices high. Soviet jewels have a similar story, only it is collectors and investors who are doing the buying, and the availability is already extremely low. And while hundreds of kilograms of gold and diamonds are excavated daily, Soviet jewels and jewelry are damaged, melted or destroyed daily. Whatever is left we see on the market, available to private collections. For those who have already formed a collection this is a very good situation; for those who haven’t, chances diminish day by day.

Simply put, the potential of Soviet jewelry is very high. Where prices of USSR gold items were previously based purely on the street price of gold (street price of one gram of gold multiplied by the weight of an item), this is beginning to change. Jewelry made by the USSR is finally being valued for its rareness and uniqueness on the market. This change is only in its beginning stage, though, so collectors still have a chance to acquire incredible items for a good price... a situation that simply cannot last for long. Each day fewer and fewer items are available. Regardless of any personal feelings towards the Soviet regime, the historical and cultural importance of jewelry created in that era cannot be denied, and its value is destined to far surpass the simple value of gold.

From personal analysis of eBay gold vendors over this past year, I counted about 14 to 19 constant sellers of Soviet gold on the ENTIRE eBay site, with two to five sellers listing items weekly. Each week only three to nine Soviet gold jewelry items are listed. To compare: For each Soviet gold item listed there are approximately 300 similar non-Soviet items presented on eBay every week. Taking into account the 7,000-plus vendors of all other gold, mostly modern, these 19 sellers could create a virtual monopoly on Soviet gold and simultaneously raise prices to whatever they see fit, giving rise to a Soviet jewelry buying frenzy. Hypothetically, if such a Soviet gold boom happens on eBay it would be bound to spill over into other gold markets as well; so don’t be surprised if you find a Soviet ring with a price tag of $2,000 at your local pawnshop. Prices of $5,000 and even $10,000 for rings, bracelets and other jewelry from the USSR are totally realistic, considering their low availability on the market. The people who own such items will simply be able to dictate whatever prices they see fit.

Of course it won’t happen overnight – although anything can happen – but in the course of one to three years we will definitely see a price jump. It is already happening to some extent, with simple Soviet rings selling for $400-700 US, and this with little interest shown by the general public. It is all bound to change. When specific types of rarities start to become hot collector’s items, gain attention and thus become noticed by investors, their value quickly jumps by five to twenty times or even more. Examples of such events in the antiquity market are endless. One day no one is even looking at an item, then something happens – a prominent collector buys a similar item at a high price, or it is published in a famous catalogue – and suddenly people are clamouring for it. A buying frenzy drives the prices higher and higher. The question is, why wait until that happens? Investing in Soviet gold now is an ideal situation. With the price of gold rising weekly, even buying it simply as gold is a very good investment, but with better possibilities opening down the road. Soviet jewelry is changing from average gold to collectible gold, and price jumps are inevitable.

There are a number of key points to look for when collecting Soviet jewelry, some of which are the same as for any other antiquity.  First, watch for the hallmarks on Soviet gold. The hallmarks for gold are: “375”, “500”, “583”, “750”, “958”. Hallmarks for silver are: “750”, “800”, “875”, “916”, “960”. The rarer gold hallmarks are “750” and “958”, which represent a better quality of gold and were produced in much lesser quantities than the most commonly-used “583” hallmark. “375” and “500” are also uncommon. Although their gold purity is lower, this doesn’t necessarily mean lower value because what they lack in quality of gold they gain in rareness of hallmark, and therefore collectibility.

Incorporated with or separate from the gold purity number there is always a government inspection stamp, which contains information about the location of the manufacturer (city, factory) and a date of creation. There is also often an additional hallmark with the number of the individual jeweler who worked on the item. There may be other marks present, but these three are the most common. It’s important to note that jewelry with natural precious stones had an additional ID number stamped in the gold surface.

The hallmark that represents the government inspection stamp changed through the years, while the gold purity hallmarks remained nearly the same up until the collapse of the USSR. From 1927 to 1959 the government inspection hallmark was a male (worker’s) head with a hat, under which was a hammer (this mark would then have a mark like “583” next to it). From 1959 to 1992 the government inspection hallmark changed to a five-point star with the hammer and sickle inside it. Using this information a collector can quickly determine the age of an item and thus its likely rarity – usually the older an item is the better.

“583” was the most commonly-used type of gold in the Soviet Union, while “585” or 14-karat is most common today. The switch from “583” to “585” was implemented after the Soviet Union collapsed and thus almost no catalogues or books speak of a Soviet “585” hallmark. But there was in fact Soviet jewelry marked with a “585” hallmark (remember this hallmark since it is very rare). Two types of Soviet “585” hallmarks exist, one official – a sailing ship stamped next to the “585” mark, intended for export only, starting from 1989 – and the second unexplained – the Soviet star with hammer and sickle and “585” mark next to it. There is little information on this latter type. One theory is that right after the collapse of the USSR, from 1989 to 1991, chaos in the government structure led to a mix-up in jewelry-making regulations and some manufacturers began using the “585” hallmark. The official order to use the new hallmarks in Russia was made by Boris Yeltsin on October 2, 1992, and was implemented by the end of 1993, at which time the Soviet star was changed to a woman’s head and gold purity was as follows: “375”, “500”, “585”, “750”. This means that up until 1992 there was no official order to use the “585” hallmark for the internal market of the USSR (the “585” gold in 1989, remember, was for export only).

I tested the mix-up theory myself when I decoded a number of gold rings from my personal collection. The first ring I checked was dated 1990, which fits the story, but the next 4 rings were dated back to the 1980s and so totally contradict the collapse theory. This mystery I leave for historians, merely pointing out to collectors that the Soviet “585” hallmark is a very rare item to possess.

Contradictions, irregularities and unknowns in Soviet hallmarking deserve another publication where all the possible and rare combinations and inconsistencies could be discussed. This is a very big subject, but I can clarify the overall issue in one statement: “The more contradictions, irregularities and unknowns present on the jewelry, the more valuable and interesting that jewelry is, period”. This is because USSR hallmarks are fairly well documented, so any kind of irregularities point to new, previously unknown history and tend to be very rare, likely having been produced in very low numbers.

This rule applies to all antiquity. A good example of the “rarity rule” is a 1918 US postage stamp called the “Upside-down Jenny” that was sold for $825,000 US on an internet auction in 2007. In 2005 an “Upside-down Jenny” was sold for $525,000 US, and that same year a block of 4 stamps was sold for $2.7 million US. Such high prices for a simple postage stamp are thanks to a mistake made by the publisher during printing, when the Curtiss JN-4 airplane was depicted upside-down. Only 700 stamps were made with this mistake, and only 100 survived to this day.

In the opinion of many, even simple Soviet earrings without any hallmark inconsistencies should be priced at no less than $5,000 US because there are so few of them left. If these earrings bear a rare hallmark like “585” their value would jump even higher. To some this may sound surreal, and yet these prices have already begun to show on the market.

The second key point to consider is gold-plated jewelry. Let me tell you about a ring that I purchased for what I thought was a good price at the time. At a local antique market I saw this interesting gold ring at a low price. I checked for a hallmark; the lighting was poor and the stamp slightly covered but I clearly saw the Soviet star and a “5” at the end. Thinking it a rare “585” hallmark ring I purchased it and carried on. Only when I got home and inspected the ring more carefully did I find that the hallmark was “875”. The ring was gold-plated silver. And for silver I felt I had overpaid quite a bit. Naturally disappointed, I began researching the issue, finding very little information on Soviet gold-plated silver jewelry. Then I spoke with other collectors and antiquarians and learned that gold-plated silver in jewelry items was rare indeed, and to collectors it is just as valuable as gold. Gold plating on silverware was common, gold plating on silver cigarette cases was widely spread, but gold-plated silver jewelry was produced in much more conservative amounts. There are many gold-plated items, from watches to cufflinks, but most are not plated with real gold and rarely is precious metal plated; thus silver jewelry plated with gold has high historical and commercial value.

If you looked closely at the hallmark numbers I mentioned earlier, you may have noticed an interesting one: hallmark “750” is the same for both silver and gold. If silver with this hallmark was ever gold-plated it would be almost impossible to distinguish silver from gold without scientific expertise. It is unknown if a silver hallmark “750” was ever gold-plated. If it was, it would make a rare and interesting item indeed.

A third key point to watch for is whether the jewelry was made by hand or machine. Much of the USSR jewelry was hand-made, and its value is higher than items made by machine. This issue should be addressed before purchase or by taking the item to an expert jeweler.

A fourth and final point to consider is the combination of metal and other materials. In a number of cases Soviet jewelers combined different types of metals in the work process. For example: red gold with yellow or white; gold with silver or platinum; silver with platinum. It was also very common in Soviet jewelry to combine precious, semi-precious or even non-precious metals and stones together. The USSR established this trend long ago and it was very popular, especially in its own market. Interestingly enough, this is a fashion in jewelry today, where we see leather with gold, wood with platinum, and so on. Today we are returning to what Soviets were wearing 20 to 40 years ago, just with a little touch of modern style. As the saying goes, “The new is the forgotten old.”

Soviet gold will surpass top market brands and become much more valuable because it is an antique made at top quality out of precious metals and stones with an incredible history behind it.

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Tamoikins Museum
www.tamoikinsmuseum.com

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