Soon after joining the Customs Service in the mid-Thirties, Pipino was assigned as an under clerk to the diamond office. As he watched the flow of gems arrive from abroad and as he listened to the discussions of their good and bad points, he became fascinated with the trade in precious stones.
Pipino began to read all he could about gems in New York City’s libraries. He learned much from the Customs Bureau’s own experts and each day’s work was an education in itself. At night he attended Columbia University to take courses on gems and gemology, and often he talked to some of the country’s leading experts, learning from them.
Pipino advanced to the post of assistant appraiser during the war years, and then in 1949 he was appointed chief examiner. In the handling of so impressive a fortune in jewels, one might expect to find him in the elegant surroundings of a Tiffany showroom. But in Pipino’s rather drab-looking workshop, the gems are spread irreverently on a battered table for examination. Around the room are laboratory aids commonly used by gemologists—the diamondscope, a binocular microscope with a special attachment for controlling light source; a dichroscope which reveals color variances in stones; a refractometer for measuring light rays; equipment to test the hardness of stone; and the most-used instrument of all, a ten-power microscope.
Ninety-five per cent of all the diamonds coming into the United States pass through the port of New York and are brought to Pipino’s office for examination. Most of them come from Europe, South Africa, Israel or Brazil. They are weighed and their value is appraised. If there is no discrepancy between the weights and the values listed on the importer’s invoices, the gems are released to Customs brokers for delivery to the persons or firms to which they were shipped.
In this small room also are made the examinations of the modern gold and platinum jewelry and all the antique jewelry. The cut and polished diamonds are subject to a 10 per cent duty. Rough diamonds arrive duty-free. Diamonds which have been incorporated into industrial tools or processed for industrial use are dutiable at 15 per cent of their value. There is no duty required on antique jewelry.
Antwerp is the largest diamond-cutting center in the world, and has been for many years. Most of the cutting of small diamonds is done by the Antwerp craftsmen, although in recent years Israel has developed into an important diamond-cutting center.
The birth of the Israeli diamond industry was part of the chain reaction of the Nazi invasion of the Lowlands in World War II. Many of the best diamond cutters in Europe were Jews. When the invasion came, they fled from Belgium and from Holland. As Hitler’s persecution of the Jews became more and more oppressive, reaching further and further, they scattered across the world to places of asylum. Many of these wanderers later went to the new state of Israel and with their skills they founded an industry that has been growing steadily in importance.
Diamonds—like gold—are sensitive to economic and political instability. There is a constant shifting of these treasures about the world, seeking havens of safety or places of the greatest profits.
Leroy Pipino and his associates didn’t even have to read the newspaper headlines back in 1938–1939 to know that trouble was brewing in Europe. They could read the warnings in the increasing volume of diamonds and other precious stones which were being imported into the United States. The flight of jewelry from Europe was a measure of the fears of millions of people.
Most of the jewels arriving in New York at that time were carried by refugees fleeing before the threat of the Nazis. Families brought with them their treasured and often priceless heirlooms. Many had converted their property and life savings to the currency of diamonds.