Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-04-21
DIAMOND INDUSTRY
HIT BY DEPRESSION
Smuggling Ceases to Be
Profitable as Demand for
Stones Decreases.
BY J. C. ROYLE.

The smuggling of diamonds has
ceased to be profitable and this type OF
"racketeering" has practically passed
out of existence except for those who
practice 1t for love of the hazard and
so-called adventure involved. That is
the conclusion jewellers and customs
officials have come to after totaling up
the results since enactment OF the
Smoot- Hawley tariff law of 1880 re-
ducing the duty on cut stones from 20
to 10 per cent and removing the 10 per
cent duty on rough stones entirely. The
same differential between cut and uncut
stones remains, so that the growing in
FAINT American diamond cutting indus
try has not been injured.
Before the tariff cut, it is estimated
that half the cut stones which came to
America we're struggled In the fiscal
year ended June 3d., 1880, the customs
authorities caught IA professional SNUG
glers and 118 amateurs who were bring
ing undeclared jewels into the country.
The professionals at times carried as
much as 100000 worth OF stones on a
trip. The majority were caught through
informers, since it is comparatively easy
to conceal the stones. The latter re-
ceive 25 per cent of the amount recov-
cred provided 1t does not exceed 1000
and their gains in 1880 were over
$500 ,000.'
Sales Show Drop.
The death of the diamond racket"
has been received with Joy by the legiti-
mate jewelers. who no longer have to
compete with others who purchase their
stones duty free and consequently 20
per cent cheaper. The diamond indus
try, although leader OF the luxury
producer class, suffered far less from
price reductions in the period Of de-
preston just ending than nearly any
other commodity. This was due to the
most rigid regulation of production,
cutting and distribution. The industry
is one OF the few in which such regula-
ton has been effective. The copper,
rubber, petroleum and sugar producers
have attempted to emulate It, so far
without outstanding success.
Sales of diamonds in America in the
last year were only about 6623 per cent
as numerous as in the previous year.
Diamond to the value of $28,90S, 485
we're imported into the United States as
compared with valuations of ssh 1894, 655
in 1929 and $54 1881, 1853 in 1928. The
general price per carat varied only from
$96.25 in 1928 to $100.07 in 1929 and
$78.73 in 1880. However the price per
carat for the finer stones only ranged
from $166.34 in 1928 TO $179.07 in 1929
and STATE in 1880.
This Is the result OF an agreement
which still has years to run between
producers and the Diamond Syndicate
of London. Under this pact, the exact
quantity of diamonds to be taken from
the mines is determined. The produce
ton dropped 48 per cent in weight and
% per cent in value from 1929 to 1880
and Will be still smaller in 1881. The
syndicate markets the rough diamonds
to the cutters and the supply is so regu-
lated the cutters receive only enough
rough diamonds to meet the world re-
quirementS. In the last year produc-
ton of the cutting factories has been
reduced so per cent. Stocks Of rough
have accumulated but the syndicate is
reported to hold them indefinitely. The
amount of cut diamonds in the hands
of cutters and retailers is small.
Decline in Quality.
More diamonds are imported here in
June than in any other month. This
is the supply to replace the graduation,
engagement and wedding ring diamonds
which are sold each Spring. The next
largest month is october which brings
the goods for the Christmas trade. The
use of industrial diamonds has fallen
off, owing to business depression but
imports gained, although the value OF
the stones was only $3.50 carat show
ing a decided decline in quality.
Copyright. l931)