Border guard

by Don Whitehead

Through the postwar years, the United States was the financial magnet drawing jewels from all parts of the world. But as the economies of the European countries improved with the support of American foreign aid programs, the tide began to turn in the 1950s. The purchasing power of the West Germans, British, French and Italians had improved to the point where the flight of jewelry was from the United States to Europe. The time had come when the baubles were more important to the buyers than American dollars.

Despite the ebb and flow of the diamond trade, diamonds remain one of the most tightly controlled commodities in the world. Each diamond-producing country tries to police the production to maintain price stability—since diamonds are an important means of earning dollar exchange.

The Diamond Syndicate, based in London, each month allots the rough diamond material to buyers in Belgium, Holland, Israel and the United States. Each country’s share depends on the Syndicate’s appraisal of what the world market will absorb without disturbing the price structure. The list of dealers permitted to purchase the rough stones remains relatively constant and there is rarely room for new members.

The tight monopoly held by the Syndicate has created a black market supported by dealers who look to sources other than the Syndicate for their merchandise. This market is called, in polite terms, the “open market.” It also is the market of the underworld, operating illicitly and in defiance of the Syndicate controls.

Liberia in recent years has become an important source of diamonds for the “open market.” It is whispered in the diamond trade that all of the diamonds which come from Liberia actually were stolen from the neighboring diamond-producing country of Sierra Leone where the production is controlled by the Syndicate. There are some who claim these diamonds were mined on Liberian soil near the Sierra Leone border.

One enterprising European dealer years ago started a mail-order business with individual diamond miners who would smuggle diamonds from the mines and mail them to him at various post office boxes. From a small beginning, these shipments reached the point where a $50,000 shipment was not uncommon.

This flow of bootleg diamonds has created a problem for Customs. The illicit material cannot be officially acknowledged by the merchants and no record can be made by the cutters in those countries where the production is carefully policed. The result is that these diamonds find their way into the hands of smugglers, who constantly are seeking ways to slip them past Customs without payment of duty.

With the rise in popularity of the marquise and teardrop diamonds, the demand for the emerald-cut diamond has waned. Cutters look for rough material which can be shaped into the marquise, teardrop, or the round diamond. The round stone has never lost its popularity and continued year after year among the fashion leaders. The oval diamond fell from popularity for a period of time but it, also, has staged a comeback.

Determining the value of a gem is often a controversial task for Pipino and his aides, who must study such factors as size, the quality of the cutting, the color of the stones, their cleanliness, and the imperfections left by nature. A diamond may be “ice white” or it may be any shade of yellow from “top silver cape” to “canary” or any one of several hues of brown. The colors may vary with the location of the window through which the light falls on the stone. The imperfections may range from a speck smaller than a fleck of dust to sizable fissures, crystals or carbon spots. It may be slightly off-color or the color may lack a clear definition.

Basically, the value of a diamond is determined by what is known in the trade as the Four Cs—color, cleanliness, cutting and caratage. As far as Pipino is concerned, the most important of all of these is the color, even though color often can be extremely deceptive in certain diamonds. Stones which come from the Premier mine in South Africa have a bluish cast in daylight, but when placed under an artificial light they have a yellowish glow. However, the Customs experts usually can look at a diamond and make an educated guess as to its origin—whether it came from Brazil, South Africa or French Equatorial Africa. Very seldom are these guesses wrong.