The sun. [volume] (New York [N.Y.]) 1833-1916, 1906-10-01
DIAMOND UNDERGROUND WAY.
SMUGGLING INOTIRY LTKELi TO
TAKE IN THREE CONTINENTS.
One Estimate Is That a. Many Gems Are
smuEkied as Pay DutS Stones win
Cleavage Lines On Blue stones Painted
yellow Secrecy In the London Market.

IAN OENH bfkuh Wy so ~"
nnent. the %lnouiry, which promises to cm-
brace three continents in ito oope, having
heen started early last week with the APP
p~lication Of q probe to the work OF Gen.
Ceorae W, Mindil, one of the two examiners
al precious stones at this port, Burton
Parker. head Of the special agents force at
Washington, came to New York a week
AFRO TO look into the records Of Gen. M'nd'ls
Office and returned yesterday, having COM
pleted this part Of his mission
Whatever the result OF this inquiry, the
Government, according to customs au-
thorities, has broader work ahead in learn
ing il it is being defrauded, AZ is charged
of millions OF dollars by direct smuggling
The assertion was made several weeks ago
bv Ludwig Nissen. chairman OF the GUS
toms committee Of the Diamond Importers
and Cutters Protective Association, that as
much in value Of precious stones Is SNUG
0led into the United States as comes openly
with duties paid.
Already the Government has ascertained
che main reason why customs officers have
not succeeded in putting an end TO inc
smuggling OF diamonds. A consular re-
port made recently to the Department oil
Commerce and Labor shows that although
the South African authorities keep ana
publish statistics which contain exact IN
Formation as to the total output OF stones
and the shipment to London, here the trail
ends, and from this point the business
enters the underground way, concealed
from public scrutiny
Although the entire diamond output goes
direct from the Cape Of Good Hope TO Lon
don, whence it il distributed to all parts OF
the world, yet diamonds do not appear
~ A-nAHNA NEnnn thu
United Kingdom, the report says, except to
a ridiculously small extent, giving no idea
OF the actual volume of the traffic. In a
period when the South African statistics
showed shipments Of diamonds valued at
$40. 900. 900 to London the exports from
England we're placed at 5000 900, and in
the same time the United States imported
a valuation equal to that Of the total out
put Of South Africa, or S26 900 900.
This does not mean that the United
States took the entire supply. because the
price Of the stones increased with success
sive handlings, and a large proportion were
made more valuable by cutting. Records
are not to be had, the department says, Of
the exports in the rough from London to
Antwerp and Amsterdam, where most Of
the European cutting IL done. IL the dia-
moud trade were conducted at London in
an open manner, the report says, q fair esti-
mate could be made OF the number, quality
and value Of the stones exported from
that city TO the diamond cutting centres Of
Europe and from each Of them to the United
States.
Su rreptitious trade is now greatly favored
by the secrecy with which it is conducted,
the report continues, the values being de-
clared in Africa and the whole business
being carried on independent Of European
official record"
The investigation centres in New York,
as the Custom House here is the custodian
of most of the information available as to
the Importation of precious stones into
this country. In the last fiscal year, when
the nations imports Of this kind exceeded
in value 5000 o 900, New Nork's total was
$50 $1,000
That there have been from time to time
serious efforts to deceive the customs au-
thorities as to the proper classification and
valuation of precious stones has become
known as a result Of the talk among i'm
porters since the investigation was begun.
Importers credit Gen. Mindil with trustra-
ting two especially clever schemes.
Recently one Of the largest importers
received in a shipment OF rough diamonds
some on which were traced in a pale INK
delicate lines, scarcely to be
except by the eye Of an expert. These were
cleavage lines and meant to save the inn
porter the expense Of employing a cleaver,
who is the artist Of the diamond trade, the
most highly paid OF all the workers, work
ing by the piece ana earning 5iI from Sro Swn .
a more cheaply paid employee could follow
them, filing and splitting the stones.
The rough stones are free of duty, but
Gen. MindfI declared that when the cleavage
lines are drawn the diamonds are vance
in value suffi ciently to 60 into the cut stone
class, which entails a 10 per cent. Rd va
lorem duty. IL this were not done the
importers could eliminate the services Of
cleavers in New York and have all OF he
work done by Europeans, whose wages az
not so high. The importer was finally al
lowed TO send the stones back to Europe
TO nave the lines erased, and the authorities
say that no more marked stones have beer
received.
Another trick was trying TO make high
priced stones look cheap. A shipment OF
dirty y~ellowish cut stones came one Gay
and the color was so inferior that
Mindil scanned the stones more closely
than usual. He applied an acid and the
yellow, which was in the nature OF q coat
Of paint, came OF, revealing as hne q lot
of pure blue stones as he had seen In many
a day. The difference in valuation as q
result Of the improved color ran into the
thousands, and the importer narrowly
escaped prosecution,
Two recent cases have had a share In
causing the Department TO investigate
Gen. Mindii's records. One was the inn
portation by Eduard Van Dam, 81 City
Han place, OF a quantity Of polished dia-
monds, which we're valued in the invoice al
$4,000. The valuation was advanced about
$4,000 by C.. A. Treadwell, another ex-
aminer, in the temporary absence OF Gen
Mindil. Mr.. Van Dam, although paying
e13y 1000 in additional duties and penalties
maintained that the differentiation was
the result OF a clerical mistake made a
Amsterdam.
The other case was that of the pear
necklace valued at 500 900 which Bernarc
Citroen Of Paris brought to New Horl
under a contract to deliver the article u
William B. Leeds Of Pittsburg and New
York, who had selected il while abroat
"A a present for his wife, Examiner Mind
passed the gems, which had been taken Of
the permanent string, as loose pearls duti
able at 10 per cent. After complaint hat
been made by New York importers Col
lector Stranahan made a new classification
holding that the pearls although not on
permanent string were really a necklac
or article OF Jewelry, dutiable at 90 per cent
The Government Ia now suing Mr.. Cttroel
90 recover the so per cent. ad~ditionaldutJ
amounting to Sic, 900.
The Diamond Importers and Cutter
Protective Association, which was organize
70 prevent smuggling and customs iTregu