Advertising Buoys Buying Boom : Diamonds Are Forever: Myth Feeds the Mystique
Robin Walker, a senior De Beers official, picks up the telephone and calls the people in charge of the British crown jewels. His influence works. Two days later, on a private visit to the Tower of London, a reporter peers into the Kohinoor, the notorious Indian diamond.
At the root of this little adventure is a simple question, which haunts diamond industry executives and which the reporter presented to a small group of De Beers officials at the diamond cartel’s headquarters here on Charterhouse Street in the financial district:
Why are people willing to pay so much for diamonds?
Last year, retail sales of diamond jewelry reached the staggering worldwide level of $31 billion (U.S. sales: $11.3 billion), the fifth record year in a row.
Although the diamonds involved wouldn’t fill an airliner’s cockpit, they would buy 260 fully equipped, latest model Boeing 747s--or more than one-third of all 747s ever built.
Yet, in the last 10 months, De Beers has raised diamond prices by 23 1/2%--the first increase (10%) came a week before the October stock market crash, the second (13 1/2%) on May 3--and still another record year is expected.
Why, everything considered, do buyers buy?
Diamonds, of course, are beautiful. But so are imitation diamonds made of zircon that have fooled experts on initial examination.
It’s not scarcity. Diamonds abound in virtually all 5,000 categories of shape, quality, color and carat weight. As many as 800 million carats of polished gem diamonds are estimated to exist; another 19 million “new” carats of gem-quality are pulled up from the ground each year.
Nor is it the prudence of the investment. Even De Beers, the South African company that runs the diamond cartel, says that diamonds are a lousy financial investment except for tax evaders, refugees and others who want wealth in small, concealable, mobile packets.
Controls Stockpile
And De Beers should know. By and large, it governs supply as well as price; it controls the stockpile into which 85% of the world’s gem-quality diamonds feed.
The quick answer is advertising.
De Beers advertises to the tune of $120 million a year; its most famous theme: “A diamond is forever.” Another $13 million in ads comes, De Beers says, from “the trade.”
The ads not only whet appetites; in Japan, promotion has created from almost nothing two decades ago a voracious market that is now No. 2 in the world after the United States.
But no amount of advertising can explain the three-fourths of American women who, De Beers says, own diamond engagement rings.
“In diamond cultures, diamonds send a message--love,” says Lloyd Jaffe, of New York, chairman of the American Diamond Industry Assn. “We call it the diamond mystique.
“The mystique . . . is the rock upon which our industry stands, a rock of unique beauty, of rich, romantic lore, of traditions and history.”
In more mundane commerce, of course, mystique is not a widely used term.
‘You Don’t Sell It’
“It is something you feel,” Jaffe says. “You don’t sell it.”
At the Tower, it is 9:05 a.m.
As Jaffe, the American diamantaire-- the industry word for diamond specialist--put it, you “feel” the mystique.
The public won’t be admitted for a while and the Yeomen of the Guard have yet to show up in the chilly, windowless chamber. Behind bulletproof glass, the 106-carat Kohinoor--whose name means “Mountain of Light”--radiates majesty in the huge, almost empty room with vault doors at either end.
On the reporter’s left is Brig. Kenneth Mears, the Tower’s deputy governor; on the right is a young man, Andrew Cumine, from De Beers. The brigadier’s voice reverberates in the bare room.
No British monarch has ever worn the Kohinoor, he says. In fact, the sovereigns shun it.
The Imperial State Crown worn by the monarch on state occasions bears no fewer than 2,800 diamonds, including the Second Star of Africa, pearls from Queen Elizabeth I’s earrings, the Black Prince’s Ruby, the Stuart Sapphire and a sapphire said to have come from the ring of King Edward the Confessor when he was reinterred in Westminster Abbey by King Henry II in 1163.
The world’s largest diamond, the First Star of Africa (531 carats), is held in place at the top end of the sovereign’s scepter.
A Principal Draw
But the Kohinoor? The royal majesty doesn’t wear, carry or in any way handle it. This seems odd. The fabled, mesmerizing Mountain of Light is one of the principal draws for 2 million annual visitors to the crown jewels and it is spectacular, even in this company.
When the explanation from the brigadier comes, it is a Class-A contribution to lore, history and, above all, the “diamond mystique,” making it music to the De Beers man’s ears:
“The murky history of the diamond involves brothers blinding brothers, and it is thought to be unlucky for a man to wear it.”
In modern times, it is a curse.
Mears, a former cavalry officer who retired from military service eight years ago after serving as director of the Army’s intelligence corps, points out that the gender theory obviously doesn’t apply today and that another reason keeps Queen Elizabeth from wearing the Kohinoor.
Embedded in Consort’s Crown
The diamond of sordid past is embedded in the Queen Consort’s crown, which means only the wife of the reigning king may way it.
The Queen Mother was the last person to wear the Kohinoor and presumably the next person will be Princess Diana after her husband, Prince Charles ascends to the throne.
(India, however, wants the Kohinoor back. Because its legend from about 1000 BC and its verifiable pedigree from 1655 originate in India, New Delhi claims the gem was wrongfully taken when the British East India Company in 1850 presented it as a gift to Queen Victoria.
(In 1655 the Kohinoor, believed to be from a mine in the Golconda region, belonged to Shah Jahan, builder of the Taj Mahal; uncut, it weighed an astonishing 787 carats. “A Venetian cutter, Hortensio Borgio, ground it down disgracefully,” Mears said, “to 280 carats.”
(The Mountain of Light passed among ruling families in India until Delhi was sacked in 1739, then among royals in Persia, Afghanistan and India again until Britain annexed the Punjab in 1849 and the British East India Company took possession.
(After a second cutting reduced the gem to 186 carats, it decorated the upper arm bracelet of Ranjit Singh, the Lion of the Punjab, its last Oriental owner. Later, Prince Albert had it cut to its present size but Queen Victoria never wore it).
More Than Beauty or Legend
To buttress the diamond mystique, the Tower’s jewels offer more than beauty or sordid legend, however.
We come soon to the Asscher syndrome.
Upon sighting the First Star of Africa, people who have done their homework note its position atop the monarch’s Scepter with the Cross and know there rests the world’s largest diamond.
And that diamond is the offspring of Joseph Asscher’s ordeal.
The world’s most famous diamond cutter when the Cullinan diamond was found at South Africa’s Premier Mine in 1905, Asscher, a Dutchman, was the only craftsman said to be considered for the job of cleaving the 3,106-carat rough diamond. It was a unique moment.
No such Goliath had ever been found. None ever was likely to be found again. In the cleaving, a misstep could shatter the entire stone--a loss of such historical importance that through the ages the disaster would be discussed whenever diamantaires met.
Shipped to Amsterdam
The diamond had been found by an African worker, who gave it to the mine superintendent, who passed it to management, which gave it to the Transvaal government, which presented it to King Edward VII in 1907 on his 66th birthday, who then shipped it to Asscher in Amsterdam.
The world waited.
For nine months, day and night, with the diamond next to his bed, Asscher used his fingers and eyes to divine the stone’s nature inside and out; he lived the diamond. Today a cutter would have the assistance of electronic measuring instruments, computers and other technology.
Asscher studied and restudied. At last, the cutter announced that he was ready.
He summoned witnesses.
He placed his cleaving instrument, a chisel, upon the Cullinan in what he had guessed was the appropriate place. Then he raised his hammer and struck smartly, cleaving the diamond in a perfect way.
Then Asscher fainted.
And that has become known in the industry as the Asscher syndrome.
9 Major Stones
From the Cullinan came nine major stones, including the two largest cut diamonds in the world (the First and Second Stars of Africa), now among the Tower’s collection, and seven that stay in Queen Elizabeth II’s personal possession. In addition, Asscher’s cleaving of the Cullinan produced 96 minor diamonds.
Most diamonds that reach the retail counter are well-traveled--starting with the mine that produced them, going on to London, where the cartel then sells them to an array of middlemen, thereby starting them on a path that takes the stones through New York, Antwerp, Tel Aviv or Bombay for processing and distribution.
After cutting, polishing and passing through various hands, the price is up 600%--or more--from the basic price in London.
Mystique or not, the price is high. A lot of percentages are built into it.
But two things appear certain: More people will buy, and the price will keep rising.
“Those are facts,” said Walker, the cartel official. “The market is expanding and De Beers never lowers the price--not even in the Great Depression (when De Beers closed its mines) did we lower it.
“But I will tell you one more thing:
“At 3 a.m., I get a nightmare.
“In the nightmare, women have decided that diamonds aren’t beautiful anymore.”
