How To Buy Diamonds
( Originally Published 1911 )
THE first thing that one should do when he intends to buy diamonds, is to disabuse his mind of the idea that he is about to purchase another form of cur-rent exchange with his greenbacks. Notwithstanding the elaborate advertising they have had as an investment, diamonds are not an investment, in a business sense, for the consumer, but a luxury. They are probably the most economical form of luxury in existence, for they do not wear out as sealskin sacques do, nor go out of fashion as fine clothes do, nor do they have to be fed like horses. They do not require chauffeurs and a good income for up-keep. They can be used as collateral without a search or a lawyer's fee, and will bring nearer cost at a forced sale, on an average, than any other form of wealth, except the stock of corporations in which the directors invest their own money. They raise a man several hundred per cent. in the estimation of the woman to whom he gives them, but their money value seldom rises above the price he paid for them. One wearing diamonds will be more generally recognized as a person of some means than he would by carrying about with him the price of them out of sight in his pocket, but if he thinks they will buy as much money as it took to buy them, he deceives himself.
In one sense they are an investment, for they are productive of larger returns in pleasure than most things. They will continue to pay interest in that way after a hundred fashions have come and gone, and after a hundred possessors have owned them and gone. So, as the principal use 0f money is to get what we want, and pleasure is what we most want, and diamonds will bring pleasure for an indefinite period, the man who advertizes them as a good investment may be right after all.
In order to buy diamonds well, one must have a good knowledge of the stones and values, or good judgment in selecting a dealer and faith in him. It is owing to the lack of these in the transactions of the general public, that so much poor material is marketed at unreason-ably high prices, and that so much distrust exists.
It is a fact that many dealers take advantage of the general ignorance about values to get as much as possible for a stone, quite regardless of its value. It is also true that some, in order to make the sale, will represent the stone to be better than it is. Slightly imperfect stones are called perfect. Badly flawed stones are said to be slightly imperfect. White stones are termed blue; off-color stones, white; brownish stones, steel-white, and so on. Nothing is said of cut and proportion when a thick, or over-spread, or badly cut stone, is in competition with one that is well made.
All this is due, partly to the dishonesty of some dealers, and in part to the desire of many buyers, to buy for a lower price than a dealer can profitably sell at.
The influence of advertising is peculiarly great in this age. Untruths so glaring that they are ridiculous to the trade, if cunningly worded and audaciously and persistently stated in the columns of reputable papers, will draw custom from thousands. One might think that business on such a basis could not be permanent. It probably could not in many lines; nor in this, without constant use of advertising mediums and the one re-deeming fact, that poor as they may be, the diamonds sold are really diamonds, and to the indiscriminate purchaser, serve the purpose of better stones. To illustrate the nature of this kind of business with an actual occurrence : some years ago, an acquaintance sat in the office of a jeweler, in a city of some size, who was noted for his extensive and shrewd advertising, and witnessed his methods. A man came in to complain that he had been " stung," as he expressed it, in the purchase of a diamond bought of him a few days previous. The dealer listened patiently until the irate customer had expended his wrath. Then in a genial, good-fellow kind of way, he began to expostulate and reason with him, finally offering as proof of fairness, to trade the stone for anything in his stock Eventually, he got a hundred dollars extra for another stone in the exchange and the man left, smiling and happy. " You got out of that very well," said the acquaintance. " Yes," said the. jeweler, " and the second stone is not much better than the first." " But how can you hold your customers that way? " asked the acquaintance. " My dear boy," was the answer, " I don't, but I do business just the same. There's a fool born every minute and I spread nets for them. If I catch them once, I'm satisfied. Let the others have a chance." That man is doing business yet, and has made much more money than many of his more scrupulous competitors. He never misrepresents goods except by inference, is one of the most affable and likable men in his city, and throws small bait broadcast.
To one of this kind, however, there are many who strive to be fair, and endeavor by fair dealing and moderate profits to secure the confidence and custom of a loyal clientele. It is not easy, as another actual occurrence will show. A man came to a diamond dealer in an eastern city and asked him what the diamond ring he wore was worth. The jeweler, not wishing to value the jewel, referred him to an importer of diamonds who was calling on him. This man said to the enquirer, " Have you bought this ring?" " Yes — bought it of a jeweler in the town where I live." "Is he a good man — good reputation? Has he a good trade and so on ? " "Why, yes, as far as I know. He has been there a good many years. I don't think he's over rich, but he pays his bills all right, I guess." " Now, if you bought that ring of a good man that has lived in a small town a number of years and saved a good reputation, and is where you can put your finger on him any time, don't you think you might as well take his say-so as that of a man you know nothing about and may never see again?" " Well, looking at it that way, perhaps I might," said the man, taking his ring and walking out, evidently somewhat puzzled and only half satisfied. The home jeweler was paying the penalty of a general distrust created largely by the sins of the other type.
In examining diamonds, there are a great many unconsidered things which befog the judgment of inexperienced buyers. It is impossible to see a diamond at its best in some stores. One must know the light and the surroundings to judge the stone properly. In other stores, the light is so strong that the brilliant reflections hide faults. Oftentimes a strong sunlight will make a false color stone appear so blue that one could hardly believe it to be the same stone when seen under another light. The general character of the dealer's stock has an influence on the buyer's judgment. A fine stone in a stock where all the diamonds are fine, will not appear to as great advantage as one not so good, but better than the average in a stock of very poor grade. Unconsciously, the buyer is influenced more by comparison than actual appreciation of quality. In a small town of the middle west, were two typical stocks of jewelry. One of the jewelers was a very conscientious man, having a strong disinclination to buy or sell anything but the best of its kind. His jewelry was 14 karat fine and of the best makes. He carried no diamonds under top silver capes, and preferred to sell crystals only. The other carried low grade goods, and advertised bar-gains. A man entered the store of the first and asked to see diamonds. They were shown to him, and prices quoted which included a very moderate profit, so moderate that the net profit after deducting the expense of carrying stock and doing business, would necessarily be very small. The customer thought the prices too high, and expressed his opinion in terms that were more forcible than polite. The dealer had not much to say. He said, " I think I buy judiciously. I pay my bills promptly and deal with very reliable houses. I am asking but a very small profit and the stones are exactly as I represent them. It is the best I can do." The man was not satisfied, but left, and went into the other store, where he bought what appeared to him to be a finer stone than any he had seen in the first store, for a little less per carat. The fact is, the first man had nothing as poor in his stock, and did not ask as large a profit as the buyer paid, but the stone that was bought was so much better than most of the diamonds in the second stock, that the buyer unconsciously rated it as much better than it was.
Many persons have a large amount of misplaced faith in their ability to " carry color in their eye." They think that they can accurately gauge the comparative color and quality of two stones seen at different times and places. Dealers are not so confident, especially those of large experience. One constantly handling gems, will arrive at a definite conclusion about its value after carefully examining a stone, but he will be slow to form an opinion about the comparative color of two stones, unless he can see them side by side, or there is a very decided difference.
Surroundings and prejudices influence judgment much more than people think. A finely made mounting will incline most persons to think that the stone in it must also be fine. It is very difficult for some to believe that poor stones exist in fine and expensive stores, but they do. Good clothes cover much vulgarity. By the same process of subconscious reasoning, a really fine gem is rarely recognized if it is in the hands of a small dealer, or in an obscure store. The general public is apt to buy on impressions made by conditions and to be quite sure at the same time, that they are exercising judgment on the gem.
Many judge a stone by the price asked for it. This fact tempts some dealers to accommodate price to the ideas of the customer. A story current among traveling men some years ago will illustrate frequent conditions. A lady, customer of a jeweler in a city of fair size, wished to buy a diamond, larger and finer than any he carried in stock. As the representative of a New York importing house was in town, he sent for him and asked him to show his customer some of that character. The New York man did so, adding to his trade price a commission for the jeweler, as is the custom. One stone pleased her, but the price was less than she intended to pay and consequently she refused it because it " was not fine enough." It really was a very fine stone, and the best he had. Finding that he could not persuade her to buy, he said finally : " I have a stone about the same size which is extraordinarily fine, but I have left it in the hotel safe, as it is of a character not usually wanted in a town of this size. If you will come back later, I will be pleased to show it to you. If that does not please you, I must confess that I have nothing that will." An appointment was made; he showed her the same stone set in a little velvet jewel case made to display a single stone to advantage, and asked a little more than the amount she had decided to pay, with an air of one who could do nothing further. She expressed delighted appreciation of its quality and beauty, and promptly bought it. This man acted as some dealers do under similar circumstances. They intend to sell at a fair profit, but rather than lose business they will raise their prices to any point satisfactory to the buyer.
Of the public, women, as a rule, have the sharper eye for color, and the quality of color has a large influence on price. It should be remembered, however, that there are other things to be considered in connection, i. e., brilliancy, proportion, cutting, and perfection. If a stone has all the good qualities, each one has added to its value, and some of them at first sight may not be fully recognized. Many times, conscientious dealers lose a sale because they have selected a stone critically for an uncritical person who thought the price too high, though it was really very low for one so perfect in good qualities.
A sharp trader, or a good judge of diamonds, may sometimes buy to better advantage than others, but usually the person who selects a dealer of good reputation, tells him frankly what kind of a stone he wants, what he is willing to pay, and trusts him to do what is right, will on an average come out best. The dealer as a rule, however much the buyer knows about diamonds, knows yet more, and he has the advantage of knowing what the goods cost. If he has a customer who is willing to pay a fair profit and shows no inclination to beat down the price, he will ask only what he feels he ought to get for his jewel. If on the contrary he finds that he has a contest of wits on hand, he will prepare himself for con-cessions, and he has the advantage of knowing just where he must stop in the whittling of price.
Gem stones command good prices, for they are rare. Nevertheless they are not usually as high comparatively as they are better than the lower grades. If due consideration be given to the rarity of very fine stones, they are the cheapest ones sold.
Many jewelers have a very bad habit of underestimating diamonds bought elsewhere. This arises from two causes. One is, the desire to convince the owner that a similar stone could have been bought at a lower price of the jeweler estimating. One doing this generally destroys confidence and his own chances for future business. Sometimes, in the case of gem stones especially, it is done without ulterior motives; the jeweler is unacquainted with material of that character and has no adequate idea of its market value. If one has bought a stone of a reliable house and it is found to be all that the dealer claimed for it, and by comparison with others proves to be satisfactory, a judgment that may be prejudiced, should not weaken confidence in the man who made the sale. If the dealer's statements prove to be false in any particular, then he may be justly suspected at all points.
A willingness on the part of the buyer to pay a fair profit, will not generally militate against buying at a right price, for most jewelers are more afraid of competition than they need be. Only in exceptional cases will the dealer fail to make his profit. Whatever his asking or selling price may be, there is a profit in it, if he sell his diamond. A good understanding will incline one as a matter of business to pay a fair profit to a responsible dealer, rather than to take chances with an irresponsible one. Irresponsible men sometimes sell diamonds with a cloudy title. If the buyer has no one in the trade in whom he has sufficient confidence to say: " I want so and so and am willing to pay so and so much; do the best you can for me," it is worth some-thing to him to have a good stock shown him by one who is responsible. It costs that man the interest on a large sum of money to carry that stock. It cost him years and money to establish his reputation. Stones break and chip sometimes in the setting; it is worth something to be ensured against loss in a case of that kind, as one is when dealing with a responsible man. Unfortunately there are a few men in the trade who will change stones if they have an opportunity. They will sell one stone and deliver a poorer one. Dishonesty of this kind is very rare, however. Perhaps no trade is more free from such rascals.
Large stores of good character have their advantages. The clerks do not always know much about the goods, but the jewels have been examined by men connected with the establishment who do, and they have passed on the grade and price. The buyer knows, without argument, just what each stone can be bought for. They may make a somewhat larger profit than the small dealer of equally good reputation, but usually they can also buy to a little better advantage, because they buy larger parcels and quantities, so that the price would be about the same.
A difficulty which the trade has to contend with, is the ancient Oriental idea still clinging to it, that to do business in precious stones, the public must be kept in. ignorance of the real facts about them. That idea is the survival of an ignorant past. Today the people of the United States know much more about them than the public of any other country. They also buy sixty per cent. of all the African diamonds mined. The American may be a little more difficult ; he may want to know more about the thing he buys; be too exacting, and inclined to chaffer, but he buys. People here, of classes which in other countries never expect to own diamonds, buy a large part of the diamonds sold. In other countries the buyers are generally persons of inherited wealth, or the newly rich who, like ours, prefer obsequious service to low prices. Ignorance helps to sell trash at high prices occasionally, but knowledge increases the sales of fine goods at fair prices. It is the man who knows, that is willing to pay a good price for a good thing and does not expect the best for the price of the poorest. The ignorant buyer is usually suspicious. The only reason why the American people do not buy more of the many other precious and semi-precious stones is, that they do not very generally know of them. One cannot want a thing, of which he has not heard, nor to his knowledge, seen.
Unless one is confident that the dealer will be quite frank about the stone he offers, it is better to see the stone unmounted, to judge of color and perfection. A platinum mounting will hide a strong tinge of yellow ; a gold mounting will sometimes throw an appearance of color into a white stone. The prongs of a mounting frequently cover flaws and breaks in the edge of the diamond. It is possible to be hypercritical in these matters, but it is only just that one should have all that he pays for. If a perfect white stone is wanted, it should be supplied, unless the buyer will not pay the price of such a stone. In that case it is better business, in the long run, for the dealer to be frank and state the facts. An observation of the methods of many dealers, covering a number of years, convinces, that whether one • makes a specialty of white and perfect stones, white imperfect, lower grades, or any and all kinds, the most successful, eventually, and who grow to be foremost in their respective cities, are those who sell goods for what they are, and of them, the man who sells the best, is usually in the van. The great jewelers of the United States have not become so by robbery and misrepresentation. They may have been able to command large profits, but their business has been established on principle, and has been free from deception and chicanery.
There is a strong and general desire to buy under cur-rent rates. It is quite proper for one to buy as cheaply as possible, but the desire often leads the purchaser to do just the opposite. This is a bargain-counter age. A constant perusal of the morning papers leads one to infer that everything is now sold at a reduction. Inasmuch as the reducers grow rich, after spending many thousands of dollars to induce the public to buy their profitless wares, some preparation was probably made in the original price for the reductions advertised. Whatever the facts about dry-goods and other staples may be, dealers know that advertised bargains in diamonds are usually deceptive. Undoubtedly there are bargains, and for various reasons, diamonds are occasionally sold much under market price, but they are usually bought by dealers who know diamonds and their market value. The public generally get the " one-third off " goods, after the price has been marked up fifty per cent. If a diamond stock were offered at one-third off a reasonable price, dealers would not leave much of it for the public to buy. As a rule, " bargains " are undesirable goods. When they are really bargains, dealers buy them and pass them on with a small advance to acquaintances who will buy at a price out of season, to save money against the time when they will be in season. Many fine jewels are accumulated in this way by shrewd men of means, at prices much below those ordinarily paid for similar goods. There are wealthy connoisseurs in New York who have gems, bought thus, which they could sell to jewelers for much more than they paid for them.
Diamonds when mounted appear larger than when unmounted. Even men in the trade usually overestimate the weight of diamonds in a mounted piece, especially in cluster work, as the massing of the stones and the metal prongs, give them an enlarged appearance. Square, pear, and heart-shape stones are larger than those of the same weight in the brilliant cut.
Beyond a good knowledge of color, cut, proportion, and the ruling market price for the various sizes, the difficulties for a trade buyer are not so great as formerly, when parcels were not assorted as closely. Jagers, Wesseltons, top crystals, crystals, top silver capes, silver capes, capes, and by-waters, are now separated. He must, how-ever, keep in touch with the market, as prices for sizes vary considerably with the demand. If there is great demand for two-grainers or any other size, there will be quick response in a rise of price all along the line of qualities in the particular sizes called for. Similarly, when the demand changes for another size, that will rise in price, and the others will correspondingly fall off. The shrewd buyer buys his sizes when they are not in demand. He holds them until the time of need comes, when he would otherwise have to buy at a high mark.
The dealer must also know color, to be a good buyer. Calling a lot " crystals" does not make them so, and it is not uncommon for goods to be rated higher than they really are. It should be remembered also that large parcels draw more color than small ones. To judge the comparative color of two lots, one much larger than the other, a cut from the larger one of a portion about equal in size to the smaller, should be made for comparison. Browns are very deceptive in lots. Some dirty-looking parcels separate to very fair stones, especially in Melees.
Since two, three, and four grainers have been in active demand, the importer is sometimes at his wits' end to supply lots of those sizes. To cover defects in his stock, he makes up lots averaging the size wanted. If the buyer is not mindful, he may when he wants four-grainers, buy for example, a lot of twenty stones weighing twenty carats, in which there will not be a half dozen one-carat stones. Nearly all will be over or under, so balanced that the lot will average one carat each. Beyond the fact that he does not want smaller or larger, he also loses on the transaction, as those weighing a little over one carat are worth no more, while those weighing under, are worth less. Say he buys twenty stones weighing twenty carats at a hundred and eighty-five dollars per carat, worth that price for carat stones, and gets six one-carat stones, and seven each of three-quarter and one and one-quarter stones :
He pays for 20 carats at $185.00 = $3,700.00
In all, stones worth $3,568.75, or $131.25 less than if they were all four-grainers, and this calculation allows a full comparative valuation for the smaller stones. For a number of years past, and at present, the price of four-grainers in ordinary goods governs that of all sizes up to about six-grainers. Eight-grainers command five to ten per cent. more. They are higher, comparatively, in Europe; here there is less difference. As the stones become finer, the price for larger sizes increases with the fineness of the goods, so that large Wesseltons, Jagers and fancy-colored stones command either a very large per-carat price or a piece price which does not regard the price per carat. For instance, a white, recut Indian diamond of about six carats is held by the owner now, a Maiden Lane dealer, at five thousand dollars for the stone.
Three-grainers will range, according to the demand, from fifteen to twenty per cent. less than four-grainers, and there is about the same difference between quarters and halves, and halves and three-quarters.
The price of sizes declines down to eighths, after which the price increases at an inverse ratio with the size until a figure is reached in excess of the price of fourgrainers.
The sizes most stable in value range from three-eighths to one and one-half carats. Melees from quarters down are more variable, as the large use of them depends upon fashions which come and go. When cluster work and fancy designs are in demand, the price of melee goes up, otherwise it is apt to be slow. The opening of the German Southwest African fields has thrown a large quantity of melee on the market, and though some of it is badly cut, it has seriously affected the price of stones ranging about eighths.
Few small buyers realize the value of good proportion and fine cutting. They often err in the same manner as the general public do, thinking that a parcel of the same quality as another is necessarily cheaper if it is a few dollars less per carat. A better knowledge of goods and a few figures would show the error. If stones are perfectly proportioned and cut, they will be very brilliant and effective. Suppose a lot of such stones is offered at two hundred dollars per carat, and another lot of the same quality but cut thick, is offered in competition at one hundred and ninety dollars per carat. One from the second lot, of the size of a carat stone out of the first lot, would probably. weigh from one and one-sixteenth to one and one-eighth. The finely cut stone would cost two hundred dollars; the other, not nearly as desirable, would cost from two hundred and one dollars and eighty-eight cents to two hundred and thirteen dollars and seventy-five cents. As the poorer looking stones would cost more than the finer ones for the same size, the first lot would be worth much more than the difference of per-carat price. This applies to all sizes, and the fact is particularly important when applied to Melees, as weight is seldom considered by the consumer in cluster work, whereas it is, in larger sizes and single stones. Some dealers who know these conditions prefer to buy the heavier stones at a lower price, because their customers judge comparative value by the weights given. They can carry from one store to another the weight for comparison, but not the exact size.
Though it is quite true that lack of knowledge about diamonds among many small dealers and some large ones, enables cutters and importers to market a consider-able quantity of not altogether desirable goods at profitable prices, it is also true that the customers of the uninformed dealer know less about them, so that the public pays for his errors.
The diamond dealer is often confronted with problems as ludicrous as they are difficult. One, a short time back, received in the morning mail, a letter from a retail jeweler, saying that he had a customer for a blue-white, perfect carat stone, and that he could pay a hundred and twenty-five dollars for it. " Kindly send one such on memorandum." As the dealer would have liked to buy such stones for twice that amount, he was some-what disgusted. " What do you think of such an order as that?" he asked of an importer who was present, tossing the letter across the desk for his perusal. The importer, after reading it, handed it back, remarking quietly : " Of course the man knows very little about diamonds. Send him the best you can for the money and say nothing." The dealer did so. Shortly after, he received a check for the price of the stone with a letter thanking him for sending such a fine stone, and assuring him that the writer would certainly send to him any further orders he might have for diamonds.
Though diamond rough, during the reign of the London Syndicate, has had a definite price, from the time it leaves their hands and is cut, values begin to vary. Cutting, assortments, and prices differ. All cutters and importers have cheap lots and dear lots, the dealer, there-fore, must have good judgment and use it, to be most successful. If he is successful as a poor buyer he would be more so if he were a good buyer. Usually, unless he has other lines which assist him in evading the results of injudicious buying, he cannot blunder all the time and withstand the keen competition of to-day, in the long run. Little as people know about diamonds, somehow it is the man who buys aright that succeeds best. If the consumer pays too much for a stone, it is a matter of little importance. He wears or gives one, a little poorer than he might otherwise, and that is the end of it. But to the dealer it is vital. The cost of his merchandise is the edge of the sword he wields in the struggle for existence. He should lose no opportunity to learn about the stones and their values. For him there is but one safe course, and that, to buy on his judgment. If that is bad, he will need great good luck.
To the consumer, the buying of a diamond is not a business, but a luxury. He has neither the experience nor the opportunity to gauge values closely, even though he has a natural ability, as many persons have, to appreciate desirable and undesirable qualities. He must, there-fore, in any event, rely upon someone, to some extent. His judgment should be exercised in selecting the man or firm in whom he will place confidence. If the man with whom he deals is expert and honest, the more confidence the buyer puts in his statements, the more surely will he get a good stone and a reasonable price.
It is a common occurrence for an intending purchaser to take an adviser with him, or to submit a stone which he has under consideration to a friend for an opinion of its value. It is usually the old story of " the blind leading the blind," and the only variation in the result is, that not both, but the buyer only, " falls into the ditch."
Advisers usually know no more than the principals, so to sustain the role, they criticise and object, until the dealer, in despair, flatters the adviser and adds to the price of the stone, therefor, if he can. Advisers generally have notions and prejudices favoring dealers of their own acquaintance, and those prejudices are apt to be very much stronger than a disinterested desire to serve the friend, and greater than their knowledge of the stones under consideration. It is more satisfactory, and safer, as a rule, for a man to make his own errors than to adopt some one else's.
There are a few general rules which may be useful to the buyer. Brilliancy is the chief quality, because no stone of any color is desirable without it. Color is important, and in the staple stones, is gauged by its freedom from any tinge of yellow, brown or green, or by the degree to which it is tainted. Tints of blue, especially of a bright violet blue, on the contrary, increase the value. Decided colors are termed " fancy," and their values are speculative. Perfection is largely a matter of sentiment, but it also costs money.
Stated roughly, price declines from four-grainers, by quarter carats to one-grainers. Three-grainers average about ten to twelve per cent. less than 4s; 2 grs. are worth nearly twenty per cent. less than 3s., and quarter carats, twenty to twenty-five per cent. less than full half carats.
This rule, however, is subject to constant variations caused by the size demand of the moment. By-waters are worth a little more than half the price of crystals; decided browns that are not fancy, about one-third; intermediate shades in proportion. Light imperfections reduce the cost, according to degree, from ten to twenty per cent. Lumpy stones are worth twenty per cent. less than well-proportioned, finely-cut stones ; over-spread stones, ten to twenty per cent. less. The value of large stones, and very fine quality stones, of two carats and over, is speculative. Perfectly matched stones are worth five to ten per cent. more than the single price; more, if very large or extraordinarily fine.
It is sometimes advantageous for a dealer who cannot use parcels of a size, to buy mélange lots or parcels of mixed sizes. Good judgment and discrimination are necessary, however. As all lots are now closely assorted for color, the dissection of a lot is comparatively easy. The sizes should be separated, and then again divided according to perfection. An estimate of value on each lot should then be made and the total amount of all divided into an average price per carat, for comparison with that asked. Size price rules to a sixteenth light. One's ideas may not be always quite correct according to general market value, but they will probably accord with his particular market.
An experience of some years suggests, that if a dealer may sometimes say too much about his diamonds, he cannot know too much. To the consumer, an old saying may be safely paraphrased thus : " Trust your jeweler and keep your powder dry."