SLUMP IN DIAMONDS

Hawera Star, Volume LIII, 1 November 1933, Page 7

SLUMP IN DIAMONDS

VAULTS FULL OF GERMS NEARLY £15,000,000 WORTH. LONDON DEALERS’ DILEMMA. Diamonds to the value of nearly £15,000,1X10 lie in the strong rooms of London’s diamond dealers, and nobody has any money to buy them. This is the astonishing revelation which one of the leading diamond merchants of the world made to the “Sunday Chronicle” recently. “The bottom has simply fallen out of the market,” the merchant said. “The world depression hit us Lard enough when it first happened. People were panicked into not buying precious stones But the original depression is nothing to the cyclone that has hit us now Ninety per cent, of the world’s dealings in diamonds is done in London and ninety per cent, of the London dealers don’t know where their next deal is coming from.

“Never in the history of the trade have the diamond dealers of London been so rich—on paper. And never have they been so poor. in an averagely good year we sell something like £ 12*000,000 of the stones in various branches of the trade. This year we shall be lucky if we dispose of £l,060.000 worth.”

The floor diamond merchant lias wealth in his vaults which would make an oriential potentate pale with envy, and he simply does not know how to realise on it.

This is how another distinguished authority explained the extraordinary anomaly: “it is the case of a world monopoly, built up by years of untiring labour and astute management, discovering that the demand upon which it existed disappeared almost in a night Generations ago diamonds were found only in the fabulously wealthy mines of Indian princes or in South America. Then, someone mai.e the discovery that the precious stones were lying in enormous profusion in the otherwise barren lands round Kimberley and the Rand. “So rich were the deposits that the African mine owners were able to dominate the world’s market. Fantastic fortunes were made bv the pioneers in the rush. The African mines were able not only to dominate the market, but in collaboration with the South African Government were able to fix the price at which the stones were sold. Production was limited and prices fixed just as the central banks of the world stabilised the price ol

gold. “People indeed bought diamonds as they might buy gold or land. They regarded the stones as a symbol of international value The world depression changed all that; people- in Britain ceased' to buy diamonds in large quantities soon after the war; now even the Americans no longer say it with diamonds. They Cannot afford it And—what is worse from the point of view of the diamond dealer — they no longer look upon the stones as things of intrinsic value.” The writer was shown a great stone. It was a lovely flashing thing. The diamond merchant to whom it belongs bought it five years ago for £SOOO. He would be lucky, he said, to get. £ooo for it now. The present slump is the worst the dealers have ever known. The great companies 'in Johannesburg are still endeavouring to maintain* the world’s prices. They have set aside millions of ponnds to a fund which is called the diamond stabili> mont fund. The dealers are being advised to hang, on to their stocks and not to part with them at “knock-out prices.