(Editor’s note: Below is an article on Israel’s Diamond Exchange that appeared in the Jerusalem Post. It was made available to JewelSiam by the Israeli Embassy in Bangkok, and is reprinted for the interest it holds for the magazine’s readers.)

            Local trade sources estimate that no fewer than 25,000 households in Israel – approximately 100,000 souls – depend on the diamond trade for their daily bread.

            For most Israelis, of course, the multi-billion-dollar diamond trade remains a closed and perhaps even somewhat mysterious world. …How healthy is this industry, which accounts for a full third of Israel’s foreign currency earnings?

            In fact, we were pleased to learn, things are decidedly looking up at the double- and soon to be triple- towers of the 2,400-member Tel Aviv Diamond Exchange.

            In particular, the political changes sweeping Eastern Europe come like the sound of music for Israel’s “rock trade.”

            Though diamentaires traditionally do very little talking about their business, the bolder among them are not afraid to sound off optimistically now and then.

            As exchange chairman Moshe Schnitzer puts it, the rebirth of capitalism behind the Iron Curtain “heralds the emergence of a new entrepreneurial class…and these people will be starved for luxury goods, particularly diamonds… They will seek the prestige, security and asset mobility that go with possession of diamond jewelry.”

            This new market augurs especially well for the Israeli diamond industry.

            “Diamond industry” is the right term, though “diamond business” or ‘diamond trade” serve just as well. However, as tel Aviv pulls ahead of New York, Antwerp and Bombay as the world’s leading diamond cutting and polishing center, the more blue collar term “industry” is fine.

            Israel today has more than 12,000 cutters and polishers in mostly small diamond workshops all over the country. At least count, there were 820 of these “factories.” Most are concentrated in Ramat Gan, with the rest whirring away from Netanya in the north to Netivot in the south.

            Sorting is the first stage in the manufacturing process, with stones grouped according to size, color, clarity and shape. Next comes the marking, where the rough stone’s structure is carefully examined for a crucial decision: should it b cleaved or sawed?

            Since no two uncut diamonds are identical, years of experience are necessary for that determination. The aim is to end up with a polished stone as free as possible of flaws, and with minimal, weight loss from the cutting.

            After cleaving or sawing comes faceting. The diamond is mounted on a ‘dop” located at the end of a mechanical arm called a “tang.” The rough diamond is held against a slowly spinning, horizontal cast-iron wheel coated with oil and impregnated with diamond dust.

            Here, out of respect to the Law of Optics, the diamond is given 58 facets – 33 crown facets and 25 pavillion facets. Each shape’s cut, from marquise to baguette to pear to heart, has its standard proportions and angles to ensure perfect light reflection for maximum brilliance and luster.

            Diamond factory workers are only one spoke in the wheel. In the bourse, importers, exporters, retailers, wholesalers, jobbers, jewelers, setters, appraisers, bankers, insurers, transfer agents and who knows how many more elements are involved in “rocks.”

            Each element is another link in the long marketing chain leading from the dark bowels of a kimberlite mine in Africa or elsewhere, to the ring on my lady’s finger or the brooch around her neck.

            In this business, tiny packets of breathtaking beauty and vast value change hands quietly, almost secretly. Here, ownership of millions of dollars’ worth of pure white, flawless diamonds are transferred within minutes, with the only “documentation” being those two familiar spoken words of trust – Mazal U’Bracha.

            If an outsider wants to witness these everyday acts of trust, he must visit the bourse. This is no easy task, however, considering that security and protective services at the Tel Aviv Twin Towers are second only to those of Israel Defence Forces headquarters.

            Thanks to a friend on the exchange’s executive staff, we were granted the privilege and hastened to Ramat Gan. After presenting identification and being photographed by an overhead surveillance camera, we were issued a temporary visitor’s pass. The card’s magnetic strip allowed us to enter through the turnstile, past the curious eyes of four armed guards, two of them in uniform, and to proceed into one of the towers.

            First stop, since it is located near the gate, was the export-import department, a square room with seven desks lining the walls. Four of the desks are manned by representatives of the four major Israeli banks, all of which keep their hands deep in the diamond trade.

            Each banker is armed with shipping and receiving documents and a hot wax sealing machine. No parcel leaves that room until a banker checks the packet’s contents against the invoice and seals the little box with a dab of hot red wax. (For reasons of personal safety, buyers rarely carry their diamonds with them, preferring to have them delivered.0

            A fifth desk is occupied by the on-site representative of the Diamond Commissioner’s office, a unit of the Ministry of Industry and Trade. The representative has only one task: to keep his eyes and ears open at all times.

            The remaining two desks are assigned to the two delivery-service firms serving bourse members. At pre-determined (but unannounced) times, the deliverers load bags of diamonds in their armoured vans and head for the waiting jetliners at Ben-Gurion Airport.

            The firm’s agents in New Delhi, Hong Kong, Singapore, New York, Antwerp and elsewhere will be waiting at the other end, ready to accept the consignments for delivery to the buyer. For “small” consignments -- packets valued under 20,000 I.S. dollars – there is a small post-office branch in an adjoining room.

            The export-import room is never still, with bourse members’ messengers constantly entering or leaving with their large blue nylon bags, each containing an estimated 2 – 3 million dollars worth of diamonds.

            Taking the elevator up to the third floor, we found the central trading hall. This huge chamber, which can accommodate 1,000 buyers and sellers, sits in the high-windowed, northern-lit bridge that connects the two office and salesroom towers, the 20-story Shimshon and 24-story Maccabi.

            More than 10,000 buyers from overseas visit the hall each year, and they come in all sizes, shapes, colors and costumers. Business is business: here a black-frocked Bnei Brak Hassid peddles his stones to the shapely blonde Stockholm jeweler; there a turbaned wholesaler from New Delhi tries to eke out another few bucks per carat from a London broker in Bond Street tweeds.

            The selling floor reminded us of Jerusalem’s Mahaneh Yehuda market, but with less crowding and pushing, and no shouting or hawking. Instead of potatoes, tomatoes, pears and pineapples, we saw brilliants, tapers, rounds and fancies.

            To qualify for membership in the exchange and the right to trade there, one must not only put up the membership fee, currently about 15,000 dollars, but also be approved by the bourse’s strict probity panel.

            This committee puts an applicant’s personal and business background through an investigation that leaves little unknown about him in the files of the exchange. And, if heaven forbid, he should ever violate the trust the diamond fraternity has put in him – he will be finished in this business.

            In this game, trust means more than paying bills on time and delivering to the buyer the same goods that you showed him. It means complete confidence between buyer and seller – even before the transaction is consummated.

            Here’s an example: In an upstairs suite of a major dealer (many prefer to trade away from the central selling hall), the dealer’s young salesman sits at a table facing two young brothers who have come from Hong Kong to buy stones.

            The salesman tidies up the table and peers out of the window at the Ramat Gan landscape. The older of the Hong Kong brothers picks up one sparkling polished diamond at a time, makes the initial accept-or-reject selection, and continues to pick up the next stone. His brother, tweezer in hand, plucks one stone at a time from the accept pile, dips it into alcohol, and gives it an expert lookover through his high-power loupe.

            This goes on for about an hour, with 500,000 dollars in diamonds piled up on the table in tiny mounds. Suddenly, the intercom blurts out: “Yoram to the office, please! The boss needs you.”

            The young Israeli salesman jumps to his feet and heads for the back office, leaving the Hong Kong brothers alone in the room with a tabletop full of diamonds – unrecorded.

            “Isn’t it strange,” we asked later, “that you leave hundreds of thousands of dollars’ worth of merchandise in a room with foreign customers, unattended?”

            “No, not at all,” came the reply. ‘If my customers trust me and keep returning without questioning my integrity, then why should I question their honesty? I trust them because they trust me.”