In the 30s of the last century Brazil was the only rough diamonds exporting country, thå Government of which was loyal to Hitler. The rest significant exporters (in the first instance the South African Republic) were either a part of the British Commonwealth, where De Beers Corporation directly controlled recovery and marketing of diamonds , or such control was exercised through agreements signed with the Central Marketing Organization (for example, Forminier Company in Belgian Congo).

In autumn 1930 in Brazil Mr. Joselio Vargas came to power as a result of a coup d’etat, a charismatic caudillo who followed ideas close to the concept of  "a corporate state" advocated by Benito Mussolini. Mr. Vargas in fact has taken a number of steps to rapprochement with Nazi Germany, but at the same time he has intensively developed relations with the United States of America trying to balance between these two powerful players. This game has continued relatively for not long : in 1938 radical military community took a shot at a fascist putsch and Mr. Vargas had to decide between two alternatives. Having suppressed the putsch he determinately has taken a side with the U.S.A. and already in 1942 Brazilian troops fought in Italy on the side of the allies.

Brazilian placer deposits of diamonds were exploited by placer miners not united in any large companies. It was impossible to centrally manage such mining and much less was it possible to predict  it. A number of efforts to organize industrial mining employing state-of-the-art mining machinery failed for both economic reasons and instable political situation in mining regions. In addition to it at alluvial deposits percentage composition of jewelry quality crystals is normally higher as compared to primary ones, but garimpeiros are interested in just such diamonds. They are not as keen as mustard about ballas. Therefore,  theoretically within  a period from 1933 to 1938 Brazil might have been a ballas source for the Third Reich, but a scanty and unreliable one. Big production of up-to-date arms requires long-term hard-and-fast planning of supplies of required materials, but practice of production of diamonds in Brazil has not met this requirement whatsoever.

Within a period from 1939 to 1944 ballas world production amounted to 54.08 mln. carats. U.S. military –industrial complex is assumed to spend around 30 mln. carats during World War II. Since cumulative capacity of U.S. military-industrial complex and that of its allies could be stacked up against the military-industrial complex of Axis countries  (otherwise the War would not have last for a so long period), taking common sense as guide one should admit that military-industrial complexes of Germany, Italy and Japan should have annually consumed millions carats of ballas. It is evident that the share of Brazil in these supplies is numbered in unities of per cent  at best .

Nevertheless, a number of present-day sources are stating that Brazilian ballas was used in German metal –working machinery supplied to USSR in 1936 - 1941.  And what is more it is maintained that the Soviet Union obtained Brazilian diamonds also under direct deliveries. Thus, a weaselly issue of supplying totalitarian powers with strategic materials is given an externally noncontradictory response, i.e. a source was also a dictatorship. It is an extremely convenient point of view, the more so as in principle there exist no reliable data on the scope and structure of production and sales channels of Brazilian garimpeiros.

Two persons might have provided irrefragable explanations on this issue. Albert Speier, Minister of Armament of Germany by virtue of his position should be obliged to know from where, in what quantity and under what terms and conditions the Third Reich obtained diamonds. In his Reminiscences he  openly mentions deliveries , for instance, of  alloying metals from Norway, Finland, Turkey, but says nothing of Brazil as a source of strategic materials Mr. Spieer published his Reminiscences in 1969 after spending over 20 years in Spandau prison as one of  Nazi criminals. It is beyond question that this book bears the impress of internal and external censorship. Can it be true that for Mr. Spieer and his censors bright character of Brazil dictator Joselio Vargas, a second person who would be able to clearly answer a point of interest, was so important? Unlikely, by 1969 Mr. Vargas long ago disappeared from the political arena – he shot himself in 1954.

Most probably Mr. Spieer did not mention Mr. Vargas for no other reason than that delivery of diamonds from Brazil, if any, played no substantial role for the war industry of Germany. The only world market which Brazil might virtually affect in 30s and 40s is a coffee market. This resource is important, but it is infinitely distant from Mr. Spieer’s interest area. An attempt to expose the Brazilian dictator as a super player supplying contending forces of the world conflict with strategic raw materials looks like  "a screen operation", felicitous camouflage of a real process in which quite another player participated who actually possessed such possibilities. And such player cannot be mentioned by Mr. Spieer, if (in contrast to Mr. Rudolf Gess) he wanted to quietly decease in his own bed after suffered drudgeries.

In the beginning of our century data appeared on several websites registered in the USA , which have been virtually ignored by analysts of the diamond market, but sensed with interest by analysts of the financial market (among other things these data gave rise to publications devoted to resources of Forex exchange market ). The sum and substance of the publications are as follows. In 1940 Administration of Franklin Roosevelt held a number of meetings devoted to issues of mobilization of US economy under war conditions. One of such consultations was assessment of the role of the ballas in the Defense Industry, prediction of its consumption and stock inventory. It has been admitted that the stock available in the US might cover at least annual requirements and it was necessary to urgently buy at least 6.5 mln. carats from De Beers. Particular anxiety has been caused by quite realistic 1940 Nazis plans to occupy British Isles (Sea Lion operation) and in such case De Beers stocks stored in London might have been fallen into the hands of Hitlerites, which, in the opinion of American analysts, would make warfare to be impossible whatsoever.

As a result the American Administration urgently approached De Beers requesting to promptly supply 6.5 mln. carats of the ballas and convey De Beers stocks to the USA protecting them from threat of  their seizure by Hitlerites.  Unexpectedly Americans were flat refused. Ernst Oppenheimer declared that he considered US stocks of diamonds to be quite sufficient to meet current needs of the Defense Industry and De Beers would continue to abide by the existing schedule of monthly deliveries. The owner of De Beers assessed the offer to convey the stocks to the USA to be  "ridiculous" and refused to discuss the issue at all. Then the State Department has approached Winston Churchill directly. Although the latter formally agreed with reasons adduced by Americans the offer has been subjected to sabotage from the part of heads of state structures in charge of the diamond sector. The American intelligence promptly revealed that Government officials were former De Beers top-ranking employees. For Roosevelt there was nothing for it but to fall back upon the weightiest argument available and to bulldoze to block deliveries of military aircrafts to Britain. It worked out: De Beers agreed to furnish the USA with 1 mln. carats and convey stocks to Canada.

Roosevelt Administration remained to be dissatisfied with such palliative solution and continued to insist on its original requirement. De Beers Corporation in every way continued to deviate from these offers by asserting that storage facilities in London had been destroyed as a result of German bombardments or declaring solution of the problem to require complete inventory of stocks... US intelligence consistently deflated such pseudo reasons. Ultimately Mr. Roosevelt ordered the Department of Special Operations (a CIA prototype) to conduct a scale investigation in order to establish such strange behavior of the ally. The investigation lasted for two years or so and revealed several interesting aspects of De Beers tactics and strategy in the field of exclusive control of the world diamond market. Although such data contradicted the idea of free competition and caused irritation of adepts of classic market democracy in principle they are understandable and explicable save one circumstance.

From their secret service agents penetrated into the Third Reich military-industrial complex management structures Americans came to know that in November 1943 Germany ha obtained diamonds in volumes sufficient for 8-month operation of its Defense Industry. A source of this huge delivery was established – Belgian Congo. This country was governed by the Government-in-exile – in London. Mining at Bongo deposits was performed by Forminier company and completely controlled by De Beers. An intelligence officer under Teton nickname was sent to Congo, an actual name of the officer is not known at present. Teton was able to establish the route of delivery of diamonds from Congo to Germany – via Tangier and Cairo, he collected case-based facts evidencing that the diamonds had been produced by Forminier company under control by De Beers and even disclosed legending of this channel, i.e.   diamonds had been delivered under the veil of Red Cross parcels. Teton very closely approached data on integral power of this channel and on people who administered it. However, he was not able to obtain these data since he was compromised by Belgian police, declared to be persona non grata and was deported from the country.

To be continued