The Diamond Cartel
THE DIAMOND CARTEL Although the United States is the principal consumer of the world's dia- mond supply,' the diamond industry is so cartelized as to be virtually imper- vious to pressure by American users of diamonds. Within the past ten years industrial diamonds have become indispensable to various high-speed, pre- cision manufacturing operations.2 Since distribution of ninety-five percent of the world's diamond production is channelized through a single marketing combine, competitive forces within the industry have been short circuited.a Therefore consumer resistance has been impracticable and American efforts to obtain a better bargaining position have so far been ineffective. The cartel is completely foreign-controlled and operates entirely outside the United States,4 thus obviating effective action under the antitrust laws and making 1. Leslie, Diamonds as Tools Speed up Victory, DoMEsTIc CoxriRcE, Aug. 1945, p, 28. Today, the United States uses approximately 90% of the world's production of Indus- trial diamonds. § 29 Complaint, DeBeers Consolidated Mines Ltd. v. United States, 325 U.S. 212 (1945) [hereinafter referred to as Complaint]. This figure includes all cate- gories of industrial diamonds--ballas, boart and carbonado. For a description of the types of industrial diamonds, see Diamonds for Victory, FOREIGN COMMERCE, Jan. 17, 1942, p. 4; Industrial Diamonds,.FORTUNE, June 1935, p. 22. Carbonado is rare and almost entirely confined to Brazil and will not enter into the discussion hereafter. Post-war production should produce the following ratios of diamond types: out of every 10,000 carats 250 will be carbonado, 1,900 ballas, 1,975 gemstones, and 5,875 boart.
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