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The Growth of The Diamond Trade

( Originally Published 1911 )

FOR centuries, probably thousands of years, diamonds were a royal perquisite. They blazoned the regal state of Oriental princes, and were a sign of autocratic power. Ordinary trade in them was confined to small and poor stones and the few fine ones which escaped the requisitions of the rulers where they were found.

Little is known of the ancient traffic in diamonds. It is said the the Arabs and Phoenicians traded in them. They were not only used as jewels, but as cutters and gravers for centuries B. C., therefore they must have been carried far and wide throughout the Orient; but literature had small space for commerce in those days. Though we read of the uses to which they were put, we know little of the channels by which they were gathered and distributed.

As far as we know, they were found only in India, but later discoveries of very ancient mining operations in Rhodesia, suggest that they were also taken from Africa many centuries ago. The diamond fields of India were confined to a comparatively small section of the country in the southern central part of India back from the eastern coast; in the Deccan, near the banks of the Godavari, Krishna and Pannar rivers and the country lying between them; and a section farther north on the banks of the Mahanadi, in the Parma district of the country known as Bundelkhand. The latter are supposed to be the oldest diamond mines of India, though the more southerly diggings which include the Golconda district, are more famous.

From a Dutchman named Van Linschoten, we learn something of the way in which mining was conducted in India late in the sixteenth century. Writing in 1596 of the mines in the kingdom of Bisnager whose capital was at Hampi in the Bellary district, he said, " The diamonds are digged from several hills near the town of Bisnager." The king farmed out rights to mine with the condition that all diamonds weighing above 25 " mangelyn " (between 34 and 35 carats) should be his. The mines were closely watched, and in the language of Van Linschoten, " if anie man bee found that hideth anie such, he looseth both life and goodes." It may be conjectured that in yet earlier times, the rulers of that and other diamond-producing countries were equally vigilant in securing the best of the mines for themselves.

In this way, large stones remained in the possession of princes, some probably passing from the kings of the producing countries to others as bribes for military assistance in times of war, or for other favors. Some were exchanged possibly for rubies, pearls and emeralds found in other kingdoms, but not many important stones were lost to the land of their nativity, except by the for-tunes of war. These Hindu princes continued to add all they could to their jewels, and accumulated them until a prince more powerful invaded their strongholds and looted the treasuries. It is estimated that the loot taken by Nadir Shah when he sacked Delhi amounted to seventy million pounds sterling.

Under these conditions, it will be readily understood that the trade in diamonds for many centuries was very limited, and was confined necessarily to those suitable for mechanical purposes only, some inferior gem stones, and a few large pieces stolen from the mines, or obtained by knavery of some kind. One may imagine also the difficulties of trade in important stones under these circumstances. The dealer, conscious perhaps that his diamond came to him by way of robbery, perhaps blood-shed, and that it properly belonged to the ruler of his own or some neighboring country, was careful to hide its antecedents and obliterate as far as possible all records concerning it. Secrecy and deceit attended every sale. To hide more thoroughly the real history of the stone, imagination supplied one innocent of punishable criminality, but ornate. These oriental fables in-vented by the chapmen of past centuries, drifted through the channels of trade into the literature of later days, and still cling to the diamonds of India, as morning mists hang about the hillsides long after the sun has risen. These methods were in part therefore necessary. One who deals in diamonds now must be watchful. Even when a stone had passed from one to another legitimately, the owner had need then for greater care than now. Diamonds were fully as attractive to thieves then. Laws were very uncertain; magistrates more so, and rulers had a habit of finding methods to obtain things they desired which did not include a quid pro quo. If the dealer's title to ownership was open to question, an attempt to sell must be made with extreme caution. Ordinary stones could be trafficked in openly, or carried for sale to the foreigners, who from the fifteenth century visited the seaports to trade in the products of the Orient, and who frequently bought diamonds to use as remittances for their own purchases in the home countries. But if the merchant had a great stone which came into his possession by way of a miner who had been too adroit for the watchful eye of the King's overseer, or from the hand of a freebooter, then he must be cautious. First he must find a likely purchaser; then by skillful aids, rumors must be sent floating to his ear, dropped as lightly and skillfully as the angler drops a fly upon the water to be carried past the hiding place of a wary trout. If he rose to the bait, some one stood near to tell what he had heard of the wonderful beauty and magnificence of the stone. Hints of roguery, danger, the desire of some great rajah to own it, or loot from a far-away temple or royal treasury, were made to stimulate curiosity and whet an appetite for a share by trade in the plunder. In good time the merchant's representative arrives and broaches the subject, contriving while doing so to introduce his own idea of the great value and probable price of the gem. He leaves, and one day, it may be weeks, it may be months later, he returns, and with him the merchant and his great diamond. The jewel is exhibited, the price asked, given and wrangled over. The interview ends, and the wily Orientals leave, carrying the diamond with them. At unexpected times, this would happen again and again until an offer was made. Then the trader sought by every artifice to get an increase until, sure that he had the last rupee possible, he left the stone and carried away the price. Over a year was consumed in the negotiations between Jaurchund the Hindu merchant and Gov. Pitt, over the sale of the " Pitt " diamond. The first price asked was 200,000 pagodas; Pitt's first offer was 30,000 pagodas and he bought it finally for 48,000, or £19,200. He did not sell it until fifteen years later.

In those days the keen competition of today for business did not exist. Buyers and diamonds both were few. The great endeavor was to make the profit sufficiently large to pay for long waiting and the risks incurred.

As India came under the control of the English, the diamond industry fell off. The supply was too uncertain to attract capital for organized effort after western methods. The old time power of the native princes to induce their subjects to go into the business of looking for diamonds, no longer existed as a stimulus. As the princes came into subjection to the English, and the English neither forced nor assisted the industry, it languished. About this time, the diamonds of Brazil were discovered, and being thrown on the market in consider-able quantities, proved to be invincible competitors. The dealer in Indian diamonds succeeded for a time in discrediting the Brazilian stones by arousing suspicions as to their genuineness, and later, as these were allayed, by claiming that the quality was inferior, but the traders of South America were too sharp for them. Instead of entering into a controversy over the matter, they shipped many of their diamonds by way of Goa, the Portuguese East Indian port, to Europe as Indian stones, until they had established a market.

A large part of the diamonds exported from India, went to Europe as remittances, and were not always profitable. Sir Stephen Evance writing to Pitt in 1702 says, referring to a lot received by the ship Duchess, " can't sell them for eight shillings the pagoda." He also says further, that another dealer had been " obliged to sell his remittance for six shillings the pagoda," a loss of twenty-five per cent., as the pagoda was worth eight shillings.

European houses also commissioned merchants and officials stationed in India to buy for them. Europeans living there speculated in them, shipping them to friends at home to sell. Captains and others connected with the East India shipping trade, watched for opportunities to add profit to their voyages by picking up an occasional bargain at the ports they called at. Some notable pearls and diamonds are said to have reached Europe in that way.

Discovery of diamonds in Brazil brought them into more general use in Europe, and thereby developed the trade in them. At that time Brazil was governed by Portugal and everything found there, went to the home country for disposal, whereas in India the finest diamonds were held by the native princes. Up to 185o, it is estimated that the mines of Brazil had yielded over ten million carats. This supply, large for the conditions then existing, naturally created a wider demand for them in Europe, but as there was no attempt to control the output, the business remained purely speculative, and prices were governed by conditions of the moment. When Dom Pedro paid the interest on the Brazilian state debt in diamonds, the price of them in London fell nearly half. In 1838 the price was up again, but fell with the French Revolution ten years later. The Civil War in America, by the creation of new money and suddenly acquired fortunes, raised the price twenty-five per cent., to which the Franco-German War added another ten per cent., and an era of prosperity succeeding, sent it up fifteen or twenty per cent. more. America's panic of 1873 broke the price again, and it fell steadily with the advent of African diamonds until Cecil Rhodes syndicated the mines, since which, with an unprecedented and inexhaustible supply, the prices have been gradually forced up until they are now more than double what they were at that time.

The coalition of the Kimberley and De Beers interests under Cecil Rhodes and Barney Barnato, trans-formed the diamond trade from an uncertain and speculative industry, liable to sink with unfavorable conditions into insignificance, to one of international importance, ranking with the staples of commerce. The development of the industry will therefore be considered mainly from that point.

When the fact became apparent, that unlike all diamond mining heretofore in India and Brazil and the first discoveries in Africa on the Vaal River conducted in alluvial débris, the diggings about Kimberley and elsewhere were all in huge pipes or chimneys of material in which the diamonds were formed, and that the supply of diamond-bearing earth was practically inexhaustible, the reflection followed, that without some powerful control of the diamond output of Africa, diamonds would soon become so common and plentiful, that however cheaply they could be mined, competition and an over-supply would cheapen them to a profitless price. Cecil Rhodes, with that overlook of present conditions which enabled him to grasp their future outcome, at once planned a combination of interests in the African fields sufficiently strong to control the diamond trade of the world, so strong as to establish a confidence in dealer and consumer alike, that would increase demand, and enable the mines to unload upon the world greater quantities of diamonds than ever before in the world's history, and at prices immensely profitable to the mining industry.

The year 1880 found the diamond-mining industry in South Africa in a precarious condition. Although the mining claims, scattered over the surface of the diamond-bearing pipes, were concentrated into fewer hands, and arrangements had been made for united action in combating the natural difficulties which all had to contend with, as hoisting, pumping, etc., the methods were nevertheless crude and disjointed. The mines together on each of the chimneys, formed a vast hole with an irregular bottom, the various sections representing different ownerships, being higher or lower according to the diligence or ability of the owners to work them. Some parts of the great hole in the Kimberley were over four hundred feet down, and the expense incurred in working the mines became so great as to eat up the profits. A new difficulty presented itself ; the reef, as the strata sur-rounding the pipes are called, began to cave in. Men with good and paying mining claims would wake up to find them covered with thousands of tons of rock and earth. Barney Barnato, who had secured quite a number of valuable claims in the Kimberley pipe, after visiting England and establishing the firm of Barnato Bros. in London as diamond dealers and financiers, returned to Kimberley and floated them into a company of 1115,000 capital, under the title of the "Barnato Diamond Mining Company." In 1881, he floated several other companies. The time and conditions were ripe for consolidation. The working of individual claims was fast becoming impractical; there was an undoubted sup-ply of diamonds, and times were booming in the home countries from which the capital must come for large and united action.

While Barnato was doing this work on the Kimberley, Cecil John Rhodes was similarly at work on the De Beers, three miles away. In the same year he there formed the De Beers Mining Company. There were two other companies on the De Beers chimney : The De Beers Central, and the Oriental. The claims of these companies were in some respects more favorably situated than those of Rhodes' Company; he therefore worked for an amalgamation of the three, and succeeded; first absorbing the Central, and later the Oriental, so that his mine, the De Beers Mining Company, practically controlled the De Beers Chimney.

On the Kimberley, Barnato continued to pursue the policy of amalgamation also, gathering into one company known as the Kimberley Central, every claim except those owned by the French Company.

While these two men were working on parallel lines near together, to concentrate power by the seizure of opportunities which the evolution of natural conditions offered, the one as part of a grand scheme of empire building, the other with the sole business object of money-making, those same evolutions gradually con-verged their ambitions and brought them in contact, and contact was necessarily, war. As it became necessary to merge individual ownerships into corporate control, and to amalgamate corporations into supreme interests, separately in the Kimberley and De Beers, so also it became inevitable that the two great fields should also be merged, and Rhodes sought to merge the whole diamond-mining industry into the De Beers Consolidated Mines, a company whose franchise permitted almost everything but the functions of national government. Barnato wished to confine the interests he represented, to the mining of diamonds and the profits accruing, with-out entering into the liabilities which the greater scheme involved. The French Company was the clashing point. The two interests fought long and hard, and finally compromised by passing the French Company into the Kimberley Central, and allowing Rhodes to acquire a large interest in the Central. Rhodes then sought to force the two great companies to merge, and finally succeeded in obliging the Barnato interests to agree to do so. A minority of the stockholders of the Kimberley Central, however, succeeded in getting an injunction restraining the merger, on the grounds that The De Beers Consolidated Mines, on account of its extensive powers beyond that of diamond mining, was not a company for the same or similar purposes as the Central, which was a company formed for diamond mining only, and whose articles of association permitted the company to amalgamate only with another company of the same or similar purposes. This did not deter Rhodes and his associates, who accomplished their object by the liquidation of the Kimberley Central and the purchase of all its property and assets by the De Beers Consolidation.

The De Beers Consolidated Mines, Limited, was organized March 13, 1888, with a nominal capital of £100,000 with power to increase it. In acquiring the control of the two great mines and the various companies which had been operating the claims into which they were subdivided, the capital stock was increased to £3,950,000, and £2,225,000 was borrowed at 5 per cent. interest. The first step after organization was to amalgamate with the De Beers Mining Company, and the scheme was carried into effect March 31, 1888.

The Kimberley Central Company then passed a resolution, August 7th, to amalgamate, but as stated, a small minority, by securing a decision of the Supreme Court against the legality of such a proceeding, prevented the consummation in that way, so January 29, 1889, a resolution was passed to liquidate, and the De Beers Consolidated bought the assets of the Kimberley Central Company, paying therefor £5,300,000, and secured the property, A paramount interest was also obtained in the Griqualand West Company (Dutoitspan) and the Anglo-African Company. The South African Company was bought for £120,000. The Krauss Bros. property was secured for £36, 500, and a perpetual lease of the Bultfontein Consolidated, obtained. Gardner F. Williams, in " The Diamond Mines of South Africa," says that, in all, properties costing upwards of £14,000,-000 were acquired.

When the De Beers Consolidated Mines Company was formed, all but twenty-five shares of its stock were held by four men, as follows; Barnett J. Barnato, 6658; Alfred Belt, 4439; Cecil J. Rhodes, 4439; F. S. P. Snow, 4439. By the articles of association they were authorized as shareholders to create "five life governors or permanent directors of the Company, four of whom shall be Cecil John Rhodes, Barnett Isaac Barnato, Frederick Samuel Philipson Snow and Alfred Befit." These four or their survivors had the power by unanimous resolution to appoint the fifth and to fill vacancies. They were the first directors of the Company and had power to appoint others until the share-holders at the first ordinary general meeting should decide how many directors there should be in addition to the life governors, and elect them. In this way four men obtained control practically of the diamond trade of the world and placed themselves in a position to exact toll from the millions who might buy the most popular gem produced by Nature.

The first annual report showed the wisdom of the consolidation, and justified the enormous expense en-tailed in bringing it about. It has proved to be one of the most ingeniously contrived and strongly intrenched methods of imposing an international tax for private enrichment, ever devised. In the absence of the president, Cecil John Rhodes, the first annual report was presented by Barney Barnato. This showed a profit for the year of £448,000, notwithstanding extraordinary expenses of several hundred thousand pounds sterling, of which thirty thousand pounds was caused by a disastrous fire, and a half-yearly dividend of ten per cent. was declared. The fire also occasioned a loss of the produce of three months' work. £85,435 was made out of the Kimberley mine, and the remainder out of the De Beers. In addition to this the stock of blue on the floors of the Kimberley and the De Beers was increased to 786,000 loads ; worth, after deducting the expense of washing, £1,375,000, and there were 100,000 lumps, of an estimated value of £35,000. At that time also, it was stated, there were in sight in two levels in the De Beers and Kimberley mines, twelve million loads of blue, estimated to carry sixteen million carats of diamonds. At twenty-five shillings per carat that would amount to £20,000,000, though it was not the intention of the management to sell them for less than thirty shillings.

Having thus successfully consolidated the paying mines of the Kimberley and adjacent districts, the management declared it to be their policy to secure a con-trolling interest in all others outside of the consolidation, to prevent an entering wedge being made by a foreign company who might endeavor to form an amalgamation sufficiently strong to be an influence against them, either in the diamond or the stock market.

Another policy was inaugurated. It was founded on the conviction of Mr. Rhodes that diamonds at a high and advancing price would be in greater public favor than low-priced diamonds, and the policy of advancing the price and restricting the output to the demand, was adopted.

Barnato gave it as his opinion that the diamond production of Africa from 1873 to 188o did not average above one to one and a half million carats per year. From 1883, when official returns began to be kept, the production up to the period of amalgamation was as follows :

1883 2,319,234 carats at 20s. 434d. £2,359,466
1884 2,264,786 carats at 23s. 2d. 2,562,623
1885 2,287,261 carats at 19s. 5%d. 2,228,678
1886 3,047,639 34 carats at 21s. 6d. 3,261,574
1887 3,646,889 carats at 22S. 1%d. 4,033,582
1888 3,565,780 34 carats at 20S. 2%d. 3,608,217

As soon as the consolidation was effected, prices were advanced. By the middle of 1889 the product was selling for 30s. per carat, which, allowing 1os. for the cost of production, left a profit of 66 per cent.

Although in 1889, Barnato strongly opposed the ship-ment of the diamonds to London for sale, preferring a local market, it was soon thought necessary to have a purchaser for the output who was not only in a position to gauge the public demand, but whose interests were so interwoven with the mines that the buyer would, as well as could, properly advise the seller what the product should be. The management of the De Beers Consolidated therefore formed a diamond syndicate for the purchase of the output of the mines and the sale of it in London. This Syndicate took the product at a stipulated price under contracts for periods ranging from one to five years. This may have been a good arrangement for the De Beers Consolidated; it certainly was a very profitable one for those interested, and afforded a means of squeezing an additional profit out of the public.

In accordance with the policy of Mr. Rhodes, although Mr. Barnato at the first annual meeting of the De Beers Consolidated declared that they did not intend to raise the price above 30s, per carat, it was steadily increased by the diamond Syndicate to the cutters and later at the mines. For the ten years from 1898 to 1907 the price at the mines was as follows :

1898 28s. 6.2d.
1899 29S. 7.2d.
1900 35S. 10.2d.
1901 39S. 7d.
1902 46s. 5.7d.
1903 48s. 6.3d.
1904 48s. 11.8d.
1905 52s. 10 d.
1906 61s. 0 11 d.
1907 64s. 9.74d.

The yield of carats per load, however, fell steadily. Whereas Barnato in his first annual report after the consolidation, reckoned each load as carrying on an average one and three-eighths carats, the yield of the De Beers and Kimberley in 1907 was 0.37 carats per load. In the first year of the De Beers Consolidated, the average was not as Barnato estimated, 1 / carats, but 1.15.

Apparently the Diamond Syndicate advanced the price of rough to the cutters as much and as rapidly as the prosperity of a prospering public would permit, and the mines management charged themselves as the Diamond Syndicate, a sufficient advance to recoup themselves as stockholders, for the decreasing yield per load and consequent increase of cost per carat of production.

During the years of world-wide and marvelous prosperity from 1889 to 1903, the De Beers Consolidated and the Diamond Syndicate controlled the African out-put and the diamond industry of the world, either by the control of the mines in Africa, or the purchase by the syndicate of the product of such small mines as might be worked under independent management. But in 1904 an infant giant appeared on the scene. The new Premier of the Transvaal, a company organized by T. M. Cullinan with a capital stock of £8o,000, began to show that it was a power of no mean order. Nearly 750,000 carats were taken from its surface workings that year, and the diamond-bearing pipe was found to be nearly as large as the four Kimberley mines combined. In 1905 its output increased to nearly 850,000 carats; in 1906 to nearly 900,000 and in 1907 it was only a few carats short of 1,890,000. In this year also another new mine, the Voorspoed, began with 46,340 carats for 6 months. All told, the African mines produced in 1907, 5,002,968 carats, of which not much over half was from the De Beers group. In 1899 the output was 3,025,039 and in 1903, before the Premier came in, it was only 2,607,024.

Five million carats proved to be more than the world could absorb in one year, and besides, with the prospect of uncontrollable production, more than the proud syndicate dare hold for future uses, especially as in the fall of that year, the United States, by far the largest buyer of diamonds, after passing through a panic, ceased buying.

The next contract between the Diamond Syndicate and the De Beers expired June 36, 1906. It had been in force five years. The De Beers management, in their annual report of the same date, stated that a new con-tract had been signed for a similar period on conditions still more advantageous. The exact terms of these contracts appear never to have transpired, and the stock-holders of the De Beers Mines did not know just what terms their directors made with themselves in their capacity as the Diamond Syndicate, for practically they occupied that profitable dual position.

At some time, either when the new five-year contract between the Syndicate and the De Beers was made, or shortly after, the Syndicate must have been convinced that the increasing production of the Premier mine was undermining its ability to maintain prices, and was forced to make an arrangement with its dangerous coinpetitoe whereby it agreed to market, under certain conditions, the Premier diamonds also. The Premier Diamond Mining Company announced from its head office in Johannesburg on October 24, 1907, that the company had made definite arrangements for the sale of its production to the Diamond Syndicate, similar to those granted to the De Beers. Immediately thereafter came the panic in the United States and the instantaneous cessation of orders from the world's largest consumer. That the Syndicate at once endeavored to evade or defer some of its responsibilities, appears certain from the tone of a notice sent by the Premier Company to its shareholders January 15, 1908, which said, " The board hope and believe that the depression which affects trade will shortly be replaced by a more normal state of things so as to enable the Diamond Syndicate, which has undertaken to buy until March next the production of the Company, to maintain its dealings with the Company." In the report of the Premier Company dated January 25, 1908, occurs the following, " Certain proposals concerning the quota to be supplied by the De Beers and by your company have been settled, and the first period of the contract dealing with the sale of your output by the Syndicate from July, 1907, to February, 1908, expires in March next."

It is evident from the facts, that the Syndicate was not as supposed, a bulwark established solely to protect the mines and the trade from the encroachment of variable conditions and the economic principles and action of the laws of supply and demand which might threaten the stability of price, but a Syndicate of private interests formed out of the De Beers management for a very profitable handling of the diamonds after the mines had made one big profit for the stockholders. It is evident also that the trade can expect no support from the Syndicate except when it is profitable to the Syndicate to give it.

On March 31, 1908, the Premier mine, being dissatisfied with the share given it in the sales (30 per cent.), withdrew from the syndicate arrangement, and became a strong competitor with the hitherto invincible dictator of the diamond market.

As the Premier is the largest of all the mines, in order to realize its importance as a factor in the problem now to be solved, of how further to hold a price for a thing which has no relation whatever to the cost of production and the natural adjustments of supply and demand, a few facts regarding it will not be out of place. With an incalculable supply of diamond ground, it is erecting a plant which will be in operation in the early part of 1909, capable of treating 40,000 loads a day. The average yield in 1907 was 0.289 carat per load. Reckoning on that basis, the yield would be nearly three and one-half million carats of diamonds in a year.

In addition to this, the Voorspoed, a new mine not yet in full working order, has a plant about completed, capable of washing 8,000 loads a day. This mine will average probably one-fifth of a carat per load, or about 500,000 carats for the year. With the De Beers group and other independent mines turning out the same as in 1907, these new mines could bring the total output to something over seven million carats, an increase not much greater than that of 1908 over 1907, which was nearly 1 million carats, although the new plants of the Premier and Voorspoed mines were not yet in operation.

Beyond the undoubted ability of the mines now in operation to produce over seven million carats per annum, or nearly three times the quantity which can be safely thrown upon the market, it is rumored that there are huge quantities of diamond-bearing earth in Rhodesia and German South West Africa, and probably many other rich deposits in Griqualand, the Orange River Colony, and the Transvaal, yet uncovered. The diamond industry has a problem of many difficult factors to solve. An unlimited supply of material which can be marketed in limited quantities only, and which can be produced at a cost so low that it is out of all proportion to the market price of the finished product; an arbitrary value which is a stimulus to new enterprises alien to the combination which established it, and a commodity which loses a large part of its desirability if the price of it is lowered. These apparently irreconcilable elements make a satisfactory solution of the problem extremely difficult, and there seems to be but one finality, viz., a return to the regulation of output and price by the natural law of supply and demand. At this writing it certainly appears impossible for the Diamond Syndicate as it is now constituted, to control either the output or the price of diamonds, and whether or no it can form a new and still greater combination, that will endure, with the new interests now in the field, is questionable, for as long as prices are maintained there will be new developments, any of which could in the beginning, while working in open cuts, produce at less cost than the older mines which must raise the material from underground workings.

A careful estimate made from the official records of exports from Cape Town, from the time when the quantity in carats was first recorded to 1908 inclusive, together with the estimate of men who were familiar with the industry in South Africa prior to that time, show that there have been exported from Africa through legitimate channels, from the discovery of diamonds until the end of 1908, about 90,000,000 carats. If one adds to this the quantity stolen, which in the early years was quite large, and has always been considerable, and the diamonds mined in Brazil and elsewhere during the period, i oo,000,000 carats would be a conservative estimate of the quantity produced. Of this, probably 55 per cent. was suitable for cutting to jewels. Reckoning a loss of 6o per cent. in cutting, the addition to the world's stock of diamonds cut as jewels, since the discovery of the African mines, would be about 22 Mil-lion carats. In the rough, these probably` netted to the mines $660,000,000, to which must be added the proceeds of 45,000,000 carats of bort and splinters at an average of $2 per carat, bringing the grand total to the mines of $750,000,000. Add to this the cost of cutting, the profits of the Syndicate, cutters, importers, jobbers, and retail jewelers, and by the time the diamond product of the world since the opening of the mines in Africa to the end of 1908 is in the hands of the consumer, the world will have paid not less than $2,000,000,000 to possess them. These are conservative figures, in which the output from sources outside the African mines are reckoned at much less than is generally estimated.

During this period the United States has become the largest buyer of diamonds in the world. With an importation of about one million dollars in 1867, it imported about forty million dollars in 1907, a forty fold increase in forty years. So great has been the consumption in this country, that numerous cutting shops have been established here. Beginning with small shops for repairing and re-cutting stones, the demand for fine work encouraged cutters to cut from the crystal, and the importations of rough at the time of the panic had reached an average of nearly one million dollars per month.

Notwithstanding the depression felt at present in the business world, the importations of diamonds into the United States during the year ending June 30, 1910, exceeded that of any previous year, and the importations of August, 1910, exceed that of any August prior.

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