Dumping Diamonds

COMMONWEALTH (British Commonwealth of Nations)

Christie's, smartest of London auction rooms, buzzed eagerly last week, as an auctioneer rapped to announce that he would sell the 61 1/2%-carat diamond "Golden Dawn," since 1913 the property of its disc verer Captain C. R. Lucas, who found it near Kimberly, South Africa.

"A thousand pounds!" squeaked a Yiddish humorist to start the bidding.

"Four thousand pounds," said a quiet, mellow voice, the voice of His Highness Aga Sultan Sir Mahomed Shah, the Aga Khan III. At once the buzz of Christie's quieted. The Aga Khan had recently offered -L-100,000 ($486,000) for Solario, famed racehorse (TIME, June 21). He could bid up to almost any sum for the diamond "Golden Dawn" if he really wanted it. Perhaps a record in diamond bidding loomed. . . .

"Four thousand one hundred," came the squeak.

Onlookers smiled. The Aga Khan is a direct descendant of Fatima, daughter of Mohammed. From his princely Persian ancestors he inherited wealth only to be called stupendous. His grandfather, his father and himself have received enormous grants from Britain as a reward for their championship among Moslems of the British raj in India. Even the late President Roosevelt sought the influence of the Aga Kahn to tranquilize certain Mohammedan tribes in the Philippines. Now the great Khan to whom the Powers render tribute was bidding for a diamond. Turning to the auctioneer he condescended to jest. "Four thousand nine hundred and fifty pounds," he said.

Amid surprise, stillness reigned. No dealer raised the Aga Khan, though amateurs had expected the "Golden Dawn" to bring much more. Why did a 61 1/2% -carat stone of such perfection go so cheap? Attention was distracted from this interesting question for a time by the coincidence that Princess Therese Aga Khan, wife of the Aga Khan III, died in a Paris hospital almost at the moment when her husband was bidding at Christie's. But why did the "Golden Dawn" go under the hammer at only -L-4,950 ($24,057)? The price of diamonds has long been relative not to their actual rarity but to the artificial scarcity created by the South African Diamond Trust, often cited by economists as a favorite example of the "perfect monopoly."

As the Aga Khan left Christie's, amateurs asked: "Do the dealers think that the Diamond Trust is now dumping diamonds?"

Piteous Plight. The answer came from Cape Town, South Africa, where there arrived last week from London three potent officials of the Diamond Trust: Lieutenant Colonel Solomon Barnato Joel, Sir Ernest Oppenheimer and Sir Abe Bailey. Proceeding to the Ministry of Mines and Industries these gentlemen figuratively rent their garments. Cried millionaire Solomon B. Joel piteously: "Diamonds will become as common as artificial pearls if the present unrestricted output from 'independent' alluvial diggings continues. . . . Something must be done to alter the present situation. Why, the alluvial diggers are now actually selling more diamonds than the great producers! ... If this continues a collapse in the industry which provides the South African Government with -L-3,000,000 in taxes annually is sure to come, and the country will have to provide for thousands of starving diamond workers whom we now employ."

In Manhattan the diamond buying public instantly reacted to last week's news, causing a slump of two-thirds in the usual pre-Christmas diamond trade. Alarmed, the great Fifth Avenue jewelers issued a joint statement: "The price of diamonds will continue upward, as it has for 30 years. . . . The interview quoted from South Africa was obviously inspired for political purposes. . . . The London Diamond Trust has itself bought up most of the independently mined diamonds, and will undoubtedly continue to keep prices up."

Barney Barnato. Solomon ("Solly") Joel's re-emergence into the news revived interest in his dare-devil uncle, the late famed Barney Barnato, ne Isaacs, one-time Jewish peddler and contortionist on the streets of London, founder of the fabulous diamond fortune of the Joel and Barnato families which now totals at least $100,000,000. Young Barney drifted out to South Africa in the '70s when individual diggers spaded the surface soil and "panned" it for diamonds, each man with his own teetering sieve. Since "diamond earth" occurs in huge cones pointing downward, the diggers soon found their open pits were becoming death traps as "mud rushes" (slides) caved in upon them from the perimeter. Subsoil mining followed as a matter of course, but subsoil mining is expensive. It was in forming the great mining syndicates which bought out the open pit "little fellows" and sunk deep mines that such men as Cecil Rhodes amassed great fortunes-- and Barney Barnato was not far behind Rhodes in diamond wealth.

Paradoxically Barney Barnato, who feared neither man nor the wild beasts of Africa, was bedeviled by two maladies: 1) a fantastic psychic dread that he might lose his millions and have to peddle in the streets again; 2) an incurable eczema which prickled him unbearably in warm weather. One day, as he was journeying from Africa to England, he leaped from the ship, drowned.

His daughter Leah, "the Pearl of Kimberly," mistress of unstinted millions, became involved in a love affair with Woolf Joel (son of her father's nephew, Solomon Joel), quarreled with him (he was shot down later under mysterious circumstances), married and divorced a poor violinist, and has now been married a total of three times to Carlyle Blackwell (U. S.-born, onetime famed British cinema actor) with whom she lives vivaciously in Europe.