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This is Part 1 of a seven-part series on the vintage guitar market, written in 1991. Prices and other references specific to that time period have not been changed. Please feel free to email me with any comments.
To view the rest of the series...
Part 2: How instruments are priced
Part 3: The role of the collector
Part 4: Fads (including Stratmania)
Part 5: Market dynamics
Part 6: The vintage dealer as trendspotter
Part 7: Instrument sales and musical styles
The Vintage Instrument Market, Part 1: The utility market
When the vintage instrument business makes headlines, it's usually because prices have just skyrocketed (or plummeted) for '50s Stratocasters or a record price has been paid for a pre-war D-45. However, that's only one side of the vintage market - the high-end collectible side. As in any used goods business - automobiles, furniture, guns - there are two distinct reasons to buy a vintage instrument. One is for utility, to play it. The other is to add it to a collection, whether for investment purposes or personal enjoyment. The two reasons are not necessarily exclusive of the other, of course. You may pay a premium price for a collectible Corvette (pre-Stingray), but you may also drive it around town. Similarly, many owners of fine instrument collections, when asked if they actually play these instruments, will answer, "Every one of them." That doesn't mean you take chances with a valuable piece. You wouldn't park your vintage Corvette in a public parking garage every day, and you wouldn't take your mint condition Fender Broadcaster to your nightly gig at the local fightin' and dancin' club either. While the collectible side of the vintage market is the side that keeps dealers in business, the historical base of the market is on the utility side.
When I first started dealing guitars, during the folk music boom of the early '60s, it was the first time in American history when any musicians were interested in vintage fretted instruments. Prior to that they preferred new ones to used ones, and for a good reason-guitar design was evolving so fast that old ones couldn't compete with new ones in the music of the day. The evolution of Martin guitars from between 1925 and 1940 is typical. If you were buying an instrument in those years, this is what you would find:
1925: The new Martin is basically the same guitar your father or grandfather might have bought anytime after 1850. It has 12 frets clear of the neck, a slotted head, a pyramid bridge with a straight-across saddle running perpendicular to the strings, no pickguard, bar-type frets, and an ebony reinforcement rod in the neck. It was designed as a parlor instrument, so it has a small body (000 sizes were available but rare). It's strung with gut strings, so it has light bracing under the top.
Many Martins made in the previous 75 years would be suitable for the type of music you played in 1925, so there may well have been a demand for vintage instruments then. The trouble was, there was no supply. From 1850 to 1897, Martin made an average of only 125 guitars a year. From 1898 (when serial numbers were instituted) through 1920, the average output was only 341 a year. By the end of 1924, after 91 years in business, Martin had made a total of only 22,000 guitars (the same number they sold in one year in 1971), which hardly provided an ample supply of used instruments. This market condition would prevail through the first half of the century so that even if these instruments had not evolved, there were simply not enough of them in existence to provide a supply base large enough to seriously compete with the demand for new instruments.
1930: Your 1925 Martin, only five years old, is somewhat of a relic next to the new OM model. In response to the public demand for steel string guitars, Martins now have heavier top bracing. The OM has a 14-fret neck and a solid peghead with banjo-type tuners. It has the new "belly" bridge with the saddle slightly slanted for better intonation, and it has a small pickguard to protect the top.
1935: If you passed up the OM's innovations in 1930, you don't have much choice in 1935. The 14-fret neck and solid peghead are standard on Martins now. The fret design is new, with a rounded top and a tang into the fingerboard. To better withstand the tension of steel strings, the ebony neck bar has been replaced by a steel T-bar and the top bracing is heavier than it was in 1930. The small, OM-size pickguard is now full-size and standard on all Martin models. And with a compensating saddle slant, your new instrument plays more in tune than the old ones. The new right-angle Grover tuners make your OM's banjo style tuners obsolete. In fact, the OM itself is not just obsolete, it's discontinued.
If you're like a lot of players in 1935, you're looking for a guitar with a bigger sound, and you're going to move up to Martin's new dreadnought "D" sizes, which are larger than the 000-size or the OM. The Martin of 1935 is almost a fully modern instrument. Maybe you won't have to buy a new model in 1940.
1940: The model looks the same as it did in 1935 but it seems to play easier with faster action. That's because the neck is thinner. The bracing has changed again, and it's now a bit lighter with the X-cross moving farther away from the sound hole (a change some, including me, do not think was an improvement). The tuners are enclosed on some instruments now. Essentially the Martin of 1940 is fully evolved and will experience only a few small changes after that.
If your musical tastes ran toward popular or jazz music, and your guitar of choice was a Gibson archtop rather than the Martin flat top, you would still have been in the same situation. Gibsons went through similar structural innovations, although not necessarily in the same years, with truss rods, bridges, f-holes and body sizes, not to mention purely cosmetic changes in finishes and ornamentation.
In general, through the first half of the century, newer guitars were better suited for the music of the day than used ones, and furthermore, there was not a large backlog of used guitars competing with sales of new guitars. That changed by the early '60s. By then, if you wanted to buy an acoustic guitar, you had a viable choice between a new or a used one. There were a good many used guitars around that were suitable for the music of the day, since designs had not changed much in 20 years. (One exception is the Martin D-size, which didn't become plentiful until the '70s.) And since there weren't any vintage dealers yet, a used one was probably a lot cheaper than a new one.
While there has always been a small market of collectors who would buy old guitars either to play old-time music or to display as period pieces, once the supply of used instruments became plentiful enough as well as suitable for the music of the day, the vintage market expanded dramatically, and the vintage business was born. In an ironic side effect, some guitar manufacturers would find themselves with a formidable new competitor-themselves. As the Martin company freely admits today, their strongest competition in the market for new Martins is old Martins.
Electric guitars, which had barely been introduced by World War II, were a few years behind the acoustics in developing a vintage interest, but they followed the same evolutionary pattern. The main electrics of interest before WWII, Gibson's ES 150 and ES-250, had relatively noisy pickups compared to postwar models, and as hollow-body, non-cutaway, single-pickup guitars, they weren't in the same league with the revolutionary new solidbody electrics of the 1950s.
Fender and Gibson led the way in the early '50s. Fender debuted the Broadcaster (soon to be "No-caster" and then Telecaster) in late 1950, the Precision bass in 1951 and the Stratocaster in 1954. Gibson introduced the Les Paul in 1952, with three other Les Paul models soon to join the line. They all evolved quickly, and as the changes in the Les Paul show, there was good always reason to buy a new one. In 1952, the Les Paul Model had a gold-painted top, single-coil P-90 pickups and a "trapeze" bridge-tailpiece designed in a way that made it nearly impossible to dampen the strings with the palm of the hand. By late 1953, the stud-mounted bridge replaced the "trapeze" style. And very late in 1953 the newly introduced Les Paul Custom featured a tune-o-matic bridge and stop tailpiece. The goldtop Les Paul Model was given the same treatment in late 1955. In mid-'57 the P-90s on the goldtop model were replaced by the new double-coil humbucking pickups. In 1958, the gold top was discontinued and a new cherry red sunburst finish was introduced. Jumbo frets were introduced in 1959, and the neck was slimmed down for faster action in 1960. At the end of 1960 the single cutaway Les Paul Standard was discontinued and replaced by the new sharp-pointed double-cutaway body shape of the SG line. Although the SG guitars do not bring as much as the single cutaway Les Pauls in the vintage market today, they did sell very well as new instruments.
Not long after these instruments (both acoustic and electric) reached their evolutionary plateaus, another factor entered the picture-quality, or more specifically, decline in quality. As music took a greater role in our culture, instrument sales naturally increased. In my view, which is shared by many collectors and dealers, quality and quantity tend to be inversely proportional. Manufacturers in the late '60s and '70s found that they could sell virtually anything they cast out on the market, no matter what the quality. For some companies, collectors date the decline in quality to specific points in company history - the sale of Fender to CBS in 1965 or the sale of Gibson to Norlin in 1970 (if not the departure of Ted McCarty from Gibson in 1966). Other companies, like Martin, did not change hands but nevertheless began turning out inferior instruments in the late '60s and '70s (The year 1971 was, not coincidentally, Martin's record production year). In the acoustic market, the general perception is that the decline in quality began as early as the end of World War II. All three companies have successfully reversed that perception of their new instruments today.
Yet another factor has entered, or more accurately re-entered, the vintage market in the '80s. For the first time in at least 20 years, vintage guitars are missing some features that today's guitarists desire. "Old" (it's hard to think of instruments from the 1960s as being old) electrics do not have whammy bars with locking nuts and tuner adjustments at the bridge. They don't have super-sensitive, quiet pickups. They don't have new wiring schemes with choices of split coils, tapped coils, or pickups wired in series, parallel or phased. There is a definite youth market that wants guitars with these innovations, and vintage dealers do not see that part of the guitar-buying market in their stores. Nor are vintage acoustics safe from today's new models. Many new acoustic guitars - both steel- and nylon-stringed - are designed to be plugged into an amplifier or a P.A. system.
Musicians are still demanding a good natural acoustic sound, but now they want it to come through a pickup. In addition, like any performing musicians, acoustic guitarists want their instruments to look good, maybe even to match their outfits. With developments in electronics, natural acoustic properties are less critical than in years past, and the classic acoustic looks are changing in the areas of body shapes and finishes. A typical new acoustic might have an under-bridge pickup, slide controls (treble, bass and volume) on the upper side of the body, a sharp cutaway body and a rich red mahogany finish. It's undeniably more suitable for some modern sounds than its predecessors.