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Lot # 742: 1919 NY Yankees $300,000 Loan Analysis Copy Letter for the Sale of Babe Ruth’s Contract (ex-Barry Halper Collection)

Starting Bid: $1,000.00

Bids: 10 (Bid History)

Time Left: Auction closed
Lot / Auction Closed

This lot is closed. Bidding is not allowed.

Item was in Auction "2023 Summer Classic",
which ran from 7/16/2023 7:00 PM to
8/5/2023 10:00 PM

Important four-page file-copy letter, dated December 4, 1919, concerning a $300,000 loan by the New York Yankees to Boston Red Sox owner Harry Frazee, which was central to the eventual sale of Babe Ruth's contract just three weeks later. 

As one can see by this letter, which was prepared for Yankees owners Col. Jacob Ruppert and T. L. Huston, the negotiations for the sale of Ruth's contract took place not only months prior to the consummation of the deal on December 26, 1919, but under a tight veil of secrecy. Harry Frazee sold Ruth's contract for $100,000 ($25,000 payable up front, with the remainder in the form of three $25,000 promissory notes, due annually over the next three years), which was a large sum of money, but not nearly enough to pay off his debts. To close the deal, he insisted on the Yankees extending him a $300,000 loan. The Yankees, naturally, required collateral for the loan, and the only thing Frazee could offer was Fenway Park. The problem, however, was that it was unclear to both parties if Frazee had complete ownership of Fenway Park at the time. 

This letter, written by the law firm Fitch & Grant (the corporate attorney for the New York Yankees), provides a detailed analysis regarding the ownership  of Fenway Park. As reported here, Frazee's ownership status was uncertain, and the firm advises "that it seems to us unwise for Col. Ruppert to advance $300,000 merely upon the assignment to him of whatever interest Mr. Lannin now has in the shares." However, the firm does believe that the matter can be satisfactorily achieved with more research, adding "We think a careful investigation of the books and records of the Red Sox Company should be first made. Mr. Thomas J. Barry, counsel for the Red Sox Company and Mr. Frazee, has undertaken to have these books and records sent to New York." 

As we know today, the issues  addressed in this letter were all resolved and the Yankees did make the loan to Frazee. What makes this letter especially interesting is that there was no mention at all about why the Yankees were even considering loaning Frazee the money. Because of Ruth's status at the time, and the media frenzy that would have ensued should news of the possible sale of his contract leak out, all the negotiations between the Yankees and Red Sox were conducted in the strictest of secrecy, with only the owners aware of the deal. 

Each page of the file-copy letter (8.5x11"), written on onion skin and not signed, displays two horizontal folds, with the last two pages displaying several small handwritten pencil notes in the border areas. 

This letter, along with nearly every other surviving document relating to the sale of Babe Ruth to the New York Yankees, originates from the estate of Ed Barrow, who was manager of the Boston Red Sox at the time of the transaction, and soon after became the longtime business manager/general manager of the New York Yankees. Many years after Barrow's death, legendary collector Barry Halper purchased Barrow's entire business archive from the Barrow family, which included dozens of documents relating to Boston's historic sale of Ruth. (Barry Halper's collection is considered by many to have been the finest private baseball-memorabilia collection ever assembled.) In 1999, Halper sold nearly his entire collection at auction through Sotheby's in New York (the collection was so vast that it took over a week of twice-daily live auctions and three months of weekly internet sales to liquidate it). Lot 560 in the live-auction portion of the sale featured a large collection of documents relating to the sale of Ruth, from which this letter, as well as every other "sale of Ruth" document featured in this and our previous auction, originates.

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