Louis Kornitzer's book, Gem Trader, is partly autobiographical and partly woven round the lore of pearls. It's educational + explains the distribution chain of gems, as they pass from hand to hand, from miner to cutter, from merchant to millionaire, from courtesan to receiver of stolen goods, shaping human lives as they go + the unique characters in the industry.
(via Gem Trader) Louis Kornitzer writes:
If, however, the offer is rejected, the owners may in their reply cable state another price, but as a rule the potential buyer has to increase his bid by slow stages until he and the owner meet—by cable—at a common price. Your Oriental merchant is not in great haste to part with his wares even by cablegram, so that gem buying from half-way across the world may demand just the same virtues of patience and insight into your opponent’s mentality as buying a curio in an Oriental bazaar. But there is one difference, at least. The buyer can take his time without fearing that another will cut in with a better offer, for no one else can see the goods, which, pending the ultimate decision, have been placed under his own seal in a safeguarding envelope according to the unvarying custom of the trade.
Long-distance bids and the protracted nature of the proceedings, however, make it virtually impossible for the small dealer to buy at first hand from source. He must come in at a later stage of the proceedings.
There are several ways open to the merchant who has completed a successful purchase and taken up a parcel of stones. He can, if he is known as a real expert and a keen buyer, obtain a profit from another dealer by merely disclosing what the goods cost him. In normal times a profit margin of anything from five to seven and a half percent will be offered him ‘blind’, that is without even an inspection beforehand of the goods contained in the sealed envelope.
Another way is to break the original seal and show the goods either himself or, as is customary, through a broker.
Or, finally, instead of selling the stones in the state he bought them, the dealer may choose not to sell them before having had them cut and polished, in which case he will grade them and send for his lapidary. When the gems have been fully fashioned, each in accordance with its structure, and the skillful lapidary has made the most of his material, the gems are again graded according to size, shape, luster and quality, and once more the broker is called on.
A good broker is worth his weight in diamond dust. He is not supposed to make a profit on the goods himself as apart from the legitimate commission paid him by the seller, and unless otherwise agreed on, the recognized rates are one percent on diamonds, two percent on pearls, and anything from two and a half percent on precious and semi-precious stones. Whether the sale effected is one for spot cash of terms—that is, credit—the commission is payable there and then to the broker, who is not supposed to take any financial risks whatever.
The gem dealer’s tools deserve mention here. They are not of an elaborate nature. In fact, they are of the simplest kind. For picking up the smaller stones the dealer or lapidary uses tweezers called ‘corn-tongs’; for sorting them in sizes he calls to his aid a circular brass box filled with movable perforated disks. This constitutes a diminutive colander and saves a great deal of labor. Then a powerful lens is indispensable, and for wiping the stones clean there there is of course nothing better than a soft chamois leather. Accurately balanced scales for weighing the gems are another indispensable item for any trader whose cargo is so precious that a five hundred millioneth of a metric ton may make a difference to him one way or another of ten or twenty pounds. Most dealers have several sets of scales: one maybe for single stones, another in which to weigh whole parcels, small pairs handy for carrying in the pocket, and as often as not a pair of scales enclosed in a glass case so that no stray current of air or small floating particles of dust may unduly affect the delicately poised beam.
In the gem importing trading centers like Antwerp, Amsterdam, Paris and London, the purchaser has the right, and not infrequently exercises it, of having the accurate weight of a single stone or of a parcel of gems determined by an unbiased third party. In the localities where the dealers have their professional clubs or associations, an official appointed for the purpose does the weighing and issues a certificate. In London, where no such club exists, the Jeweler’s section of the London Chamber of Commerce has established such a service for the convenience of the trade on payment of a small fee.
The price of semi-precious stones of the lower order is usually quoted per gramme or per ounce (thirty grammes go to the ounce). For semi-precious stones of the higher order and for precious stones the carat weight is the standard unit. No less than five million carats go to make up a metric ton, which gives an idea of the smallness of the carat weight. The carat itself is subdivided into a hundred parts, any one of which is called a point. One ‘point’ more or less in the established weight may mean a pound or so in or out of pocket when the stone in question is priced at something like a hundred pounds a carat.
Foundations Of The Bridge: The Technicalities Of Gem Trading
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