U.S. Depends On Britain

Wanganui Chronicle, 19 January 1948, Page 7

U.S. Depends On Britain

But the diamond rush is not due solely to inflation Four-fifths of the world diamond output is industrial, vitally necessary to many phases of modern manufacturing techniques, and it is this factor which made diamonds in 1946 responsible for one quarter of Britain’s total dollar earnings. Last year 44 million dollars’ worth of cut and uncut diamonds passed to the U.S.A, through the London market; and although many of them went to the modern “Diamond Jim Bradys” who have taken to wearing the stones in rings and regimental badges, the greater proportion went to American factories.

For about 95 per cent, of the world’s diamonds pass through Britain. America must therefore buy her supplies from Britain, whose position is thus strategic; since, as

the American Press has stressed, Britain could in fact fix a stranglehold on American industry by withholding diamond supplies; This dependence of America on Britain, however, has its reverse side; a slump in American buying hits Britain as salesman. And since diamonds are among the first commodities to be affected in America by any domestic movement from boom to

“recession,” British firms are attempting to develop alternative markets in the East, in Canada, Australia and Latin America. From France, Belgium and Spain buying is also brisk, particularly for hoarding purposes. By preserving scarcity value London’s diamond centre has stabilised prices, securing markets and levelled out production. Altogether, sales for 1946 totalled more than £30,000,000 — an all-time record which may ewn be surpassed this year. From this can be seen the contribution of diamonds as ammunition in Britain's battle for economic recovery.