Diamond Trade and Industry
Diamond Trade and Industry
DIAMOND TRADE AND INDUSTRY
Jews have been prominent in the trade and in working of precious stones, of which diamonds and pearls provided the bulk, from the Middle Ages to the modern era. They took an active part in opening up the diamond markets of India and Brazil, the resources of South Africa, the London diamond market, and the diamond industries of the Low Countries. Because the diamond trade routes corresponded with the links between Jewish centers in the Diaspora – in the Ottoman Empire, the Netherlands, in some of the cities of northwest Germany, and in Poland-Lithuania in the 16th to 18th centuries – the trade was particularly suited to Jewish enterprise. Additionally, as diamonds were still a relatively rare and new commodity in Europe up to the 16th century, this was a branch free of medieval trade and guild restrictions. Up to the 18th century the overwhelming majority of uncut diamonds came from India. Commerce and crafts pursued by Jews along the Indian Ocean trade routes, in Egypt, the Maghreb, and along the shores of southern Europe, included trade and workmanship in precious stones, pearls, and jewelry. The Fatimid caliphs were supplied with gems by the brothers *Abu Saʿd al Tustarī and Abu Naṣr al-Tustarī, influential bankers and diamond merchants in the 11th century at Cairo. As *moneylenders, Jews in Western and Central Europe had much to do with the assessment, repair, and sale of precious stones and jewelry which they received in pawn.
With the rise of *Amsterdam as a major center of the European diamond trade and industry in the 16th century, Dutch Jews, mostly members of the Portuguese Sephardi community who had been prominent in Portugal's diamond trade, played an important part in both. By the middle of the 17th century the preponderance of Jews in the newly developed trade was so marked that the resettlement of the Jews in England brought about a major shift in its structure. The Sephardi presence in London, combined with the growing ascendancy of England in the Eastern trade, resulted in the diversion of the greater part of Europe's diamond imports to England. A few years after the arrival of the first Jewish immigrants, the British East India Company, which had a monopoly of England's Indian trade, permitted independent merchants to import uncut diamonds under a system of individual licenses issued by India House. Until the end of the 18th century most Indian stones used by the European diamond industry were imported through London. The records of the East India Company show that the majority of the importers were Jewish and that they dominated the trade throughout most of this time. The diamond merchants exported silver and coral to India, the proceeds of which were invested in diamonds. The coral was first brought to London from Leghorn, mostly by Jewish merchants of that city who often had a direct share in the Indian diamond trade through Jewish agents in London. The Indian end of the trade was managed by agents of English firms – mainly English Jews who went out to India for this purpose. Around 1750 there were about ten Jewish diamond agents at *Madras.
In London the diamonds were usually sold to merchants who sent them to Amsterdam for cutting. Amsterdam remained throughout the 18th century the chief seat of the diamond industry, while *Antwerp, which was later to overshadow it, was of secondary importance, dealing mainly in stones of inferior quality. From Amsterdam the finished diamonds were distributed throughout Europe. From its inception, the diamond trade and industry of *Amsterdam was largely in Jewish hands. Portuguese Jewish diamond polishers are recorded in 1615; they later employed their poorer Ashkenazi brethren who gradually established their own businesses. Diamond cutting and polishing was a profitable profession, but suffered from the vicissitudes of an unstable market as well as an occupational disease – tuberculosis. Themain demand for diamonds came from the courts of Europe, and jewel purveyance was both a stepping-stone to and a major part of the post of *Court Jew. An important stage in the transfer of precious stones from London to Amsterdam, and thence to the courts of Germany, was *Hamburg, where a sizable community of Sephardi Jews monopolized the diamond trade in the 17th and 18th centuries. One of the earliest Court Jews, *Lippold, was a supplier of gems and other luxury articles, as were almost all the Court Jews of the era. Aaron *Isaac of Sweden, the *Oppenheims of Vienna and Wuerttemberg, and the *Ephraim family all owed their success, at least initially, to their dealings in gems. *Glueckel of Hameln, a shrewd dealer in precious stones, gives a detailed picture in her autobiography both of the international commerce in precious stones and gold as well as of small-scale trading by German Jews in this sphere. After 1700 Ashkenazi Jews began to play an increasingly important role in the London center of the diamond trade. By the 1720s the investments of the Ashkenazi *Franks family in the Indian diamond trade were approximately equal to those of the biggest Sephardi enterprise – that of the brothers *Franco – and 60 years later the Ashkenazi merchant Israel Levin Salomons (Prager) attained a dominant position for a time.
The discovery of diamonds in Brazil around 1730 ended India's monopoly as a producer of uncut diamonds and for a time weakened the hold which London and its Jewish diamond merchants had on the import trade, though Brazilian stones were soon reaching London illegally in considerable quantities. In the long run this development diminished neither the prominence of Jews in the diamond trade and industry nor London's position as the chief international market for uncut diamonds. Jews continued to be dominant in the diamond-cutting industry of Amsterdam, and later of Antwerp, where in the late 19th century they constituted about one-fifth of the workers but three-quarters of the brokers and an even higher proportion of the factory owners. The diamond glut of the 1890s terminated a boom in the course of which the number of diamond workers had tripled through immigration of Jews from Eastern Europe. A period of reorganization followed, in which national and international diamond workers' unions in Belgium and Holland were organized under the leadership of Henry *Polak. The diamond workers' union spearheaded in 1893 a general strike in Belgium for a minimum wage.
The rise of Fascism in Europe created a crisis for Jews engaged in the diamond industry and trades. During World War ii diamond-cutting centers were established in Ereẓ Israel (see below), Cuba, Brazil, Mexico, and the United States by Jewish refugees. The Nazi occupation authorities in Belgium and Holland made Jewish diamond merchants and industrialists their particular victims. By 1970 Jews had still not reattained their former dominance in the field in Amsterdam, although they had succeeded in doing so in Antwerp.
Jewish enterprise had a large share in the development of the South African diamond mines, which became the chief source of diamond supply after 1870, including the formation of De Beers Consolidated Mines Ltd. (1888), which in the 1960s controlled the production and marketing of the greater part of all uncut diamonds. German Jews were among the earliest pioneers of the South African diamond rush. Among the prospectors were many from London's East End, one of whom, Barney *Barnato, was a formidable rival and later partner of Cecil Rhodes. Alfred *Beit was the architect of the De Beers syndicate which S.B. *Joel first headed. Ernest *Oppenheimer and Harry Oppenheimer successfully followed in his footsteps.
[Gedalia Yogev /
A diamond industry was founded in Palestine before World War ii by immigrants from the Low Countries, who brought with them the necessary technical skills and commercial connections.
During World War ii Palestine replaced Belgium and the Netherlands as the gem diamond center of the free world. Palestine received its supplies of rough diamonds from the De Beers central selling organization ("The Syndicate") and sold its polished products mainly to the U.S. At its peak during this period, the industry employed some four thousand polishers, mainly in Netanyah. The value of the diamond exports reached some $16,000,000 a year.
The revival of the centers in Belgium and the Netherlands after the war, the diversion of raw material by the Syndicate to these countries, and the Israel War of Independence drastically contracted the diamond-cutting industry in Israel. By 1949 it was almost at a standstill. However, the industry revived in 1950 and, in the early 1960s, became the second largest diamond gem center in the world, after Belgium. Its share of the world trade in polished diamonds was between a quarter and a third, and it maintained the same proportion in the numbers of polishers employed.
The secure and steady supply of rough diamonds was a constant concern of the industry. The De Beers Syndicate directly controls the distribution of over 80% of the world output of rough diamonds. Between 1950 and 1959 its direct sales to Israel were frozen at approximately $7,000,000 a year. The industry had therefore to obtain its supplies from other sources, the proportion of which in the total import rose from 24% in 1950 to 84% in 1959. At the end of this period the special high premium of the indirect supplies was so severe that it endangered the prospects for further development.
Israeli agencies (among them Pittu'ah (Development), a company whose shares are owned by the Israeli government) were encouraged to exploit firsthand sources of supply in western Africa. Negotiations were conducted with the Syndicate with a view to assuring the industry in Israel an adequate share of the diamonds under the Syndicate's control. As a result, from 1961, the proportion of the supply from the Syndicate rose and gradually constituted more than half of the imports.
The Israel diamond industry concentrated on the cutting of melee stones, medium-sized octahedron-shaped rough stones, which are sawed in the middle. The two pyramid shaped parts are then polished by a chain of six polishers, each specializing in particular facets, to produce a round "brilliant" with 57 facets, suitable for setting. Some stones with particular shapes are cut into "fancies" (marquises, baguettes, etc.).
In the late 1960s the industry consisted of some 400 enterprises, about half of which employed fewer than 15 workers. Only 45 enterprises had more than 50 workers and only three more than 100 workers. Over half of the enterprises, and of the workers, were located in and around Tel Aviv (where the Diamond Exchange was also located), over a quarter in Netanyah, and the rest in Jerusalem and the development areas.
In the 1970s Israel passed Antwerp as the world's largest diamond wholesaler, supplying over 50% of all cut and polished diamonds. A slump in the early 1980s led to the restructuring of the industry and the creation of around 800 new and smaller manufacturing units, with sales rising from $905 million in 1982 to $1.7 billion in 1986, representing 24% of Israel's total exports. By 2003 the figure had risen to $5.5 billion and further growth in 2004 of nearly 15% brought sales up to $6.3 billion. The United States imported 67% of the stones.
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