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The use of the Gokhran diamonds in industry: a myth or truth?

26 november 2018

The statement about the use of the Gokhran polished diamonds in the USSR industry as industrial diamonds was very common in the specialist literature. For example, “The attempts to set up a regular legal import of diamonds failed: in the climate of military and political confrontation between the USSR and western countries and the subsequent ‘cold war’, foreign diamond suppliers, first of all De Beers, refused to trade with the USSR. The Gokhran polished diamonds were the other source of diamond tools: the stones were removed from the confiscated jewellery pieces and then recut.”1

‘Failed attempts’ to import legally were just a tribute to the industry legend, the archive documents confirm that the USSR, in fact, did not have the slightest problems in importing industrial diamonds. And the issue of the Gokhran polished diamonds requires further study as there were cases of their industrial use.

The Gokhran was established in 1920 and its Diamond Fund was initially formed mainly thanks to the polished diamonds confiscated directly from the aristocracy representatives, affluent persons and churches. Later on, a more human Torgsin came in that was set up to buy up precious metals and precious stones from the population (probably, at the lowest possible cost) to be exported for convertible currency. In 1933, a Central polished diamond Repository was set up in the Torgsin and over 300 buying-up centres were open in the country that bought up polished diamonds from the population. From those buying-up centres, the polished diamonds were transported to Moscow by courier (under the agreement between the Torgsin and the People's Commissariat for Internal Affairs). The Gokhran, Committee of Reserves under the Council of Labour and Defence and several offices working under the auspices of the People's Commissariat for Foreign Trade accumulated those polished diamonds.

The data on buying up the industrial diamonds by the Torgsin from the population is of interest. According to classified Regulation No.32 of the Hard Currency Commission under the Council of People's Commissars of the USSR dated 21.02.1935, “In quarters 1 and 2, 1935, the Torgsin should hand over the industrial diamonds to the People's Commissariat for Heavy Industry that were bought up in the USSR for a sum of 40,000 gold roubles based on the import prices.”2 This poses the expected question: where did the Soviet population get industrial diamonds for such a significant sum of money? At that time, diamonds were only imported and never supplied to retail chains or sold to the population. The answer lies in the imperfection of the Torgsin purchase pricelists and low qualification of the Torgsin’s diamond evaluators. The pricelists were inadequate, diamonds were practically evaluated by their weight only. As a result, a lot of small-size polished diamonds with flaws were bought up that at the level of the Central Polished diamonds Repository were considered unprofitable to be exported and were categorized as ‘industrial diamonds’ and transferred to the industry.

This failure had no effect on the profitability of the Torgsin’s trade in polished diamonds as they were bought up from the population at the prices 2 to 5 times lower than the world ones.3 By 1936, the Torgsin had sponged the USSR population of almost all the polished diamond and gold potential and ceased to exist. That buying up of the polished diamond was continued by the Yuvelirtorg, but trading was sluggish and the target was not hit almost all the time.

In 1938, A. Bruk, one of the Yuvelirtorg top executives (he was the expert of the Central Polished diamond Repository in the Torgsin) brought a proposal to the government to stop exporting the polished diamonds and set up an inventory for the defence industry using the stones bought up from the population. However, this initiative was viewed very unfavourably by E. Chvyalev, the People’s Commissar of Foreign Trade of the USSR. Chvyalev wrote in his letter to A. Mikoyan “The price received for 1 carat of export-quality polished diamonds was much higher than the import price of one carat of industrial diamonds. In view of this, it is inexpedient to use the export-quality polished diamonds to build up the industrial diamonds inventories. If it is necessary to make ‘inventories for our defence industry’, as it is said in the letter by A. Bruk, this inventory, without doubt, should be made by means of purchasing the appropriate quantity of the industrial diamonds but not due to ceasing the stone exports.”4

Chvyalev put the blame on Bruk for being unable to complete the plan of buying up the polished diamonds from the population. According to the People’s Commissar of Foreign Trade, that was the reason of the Yuvelirtorg official’s pathetical care of the need of the defence industry in the industrial diamonds. Mikoyan shared the Chvyalev’s position and Bruk’s initiative was declined, the polished diamonds were still considered as an export asset only.

Still, there were cases of using the Gokhran polished diamonds for industrial purposes. In 1947, P. Parshin, the Minister of machine building and instrument-making of the USSR, addressed the Council of Ministers with a request to provide the ‘Rosa-shaped’ polished diamonds required to manufacture the marine chronometers ordered by the Ministry of Defence.5 On November 12, 1947, V. Molotov signed appropriate instruction of the Council of Ministers of the USSR No.16805rs, addressed to the Ministry of Finance of the USSR and Ministry of Internal Affairs of the USSR, where the Gokhran belonged to at that time.

But Parshin’s request was not caused by the deficit in the industrial diamonds at his ministry’s enterprises. He received as much diamonds as he asked for, the problem was that there were no cutters and polishers able to turn a rough diamond into a chronometer part required.

A ‘Rose’ cut (also known as an 'Antwerp Rose' cut) is an old diamond cut with the lower part of the stone being absolutely flat. In fact, such a polished diamond is a ready thrust bearing able to withstand axial loads. Parshin needed exactly those bearings. But there were no skilled workers to make them, at that time there were no such a profession in the USSR like a ‘diamond cutter’ who could turn rough diamonds into polished ones. So, they had to use the polished diamonds made by the craftsmen of the 19-th century. And Parshin sent the rough diamonds received for that order to the Gokhran.

So, the episodes of using the Gokhran polished diamonds for industrial purposes did happen but they had no decisive influence. They were exceptions that proved the rule: the USSR had never incurred a deficit in diamonds for industry.

Sergey Goryainov, Rough&Polished 

1Teslenko V. The organization of the trade in precious stones. М.: Infra-М, 1997. С. 133.
2The State Archive of the RF. Ф. Р5446. О. 16а. Д. 1143. Л. 3.
3Russian State Archives, Economy. Ф. 4433. О. 1. Д. 127. Л. 8.
4The State Archive of the RF. Ф. Р5446. О. 22а. Д. 685. Л. 3.
5The State Archive of the RF. Ф. 5446. О. 49а. Д. 1744. Л. 3.



We continue to publish archive documents on diamonds: 

1. The State Archive of the RF. Ф. 5446. О. 49а. Д. 1744. Л. 3. The request of the Minister of machine building and instrument-making of the USSR, P. Parshin, for the ‘Rose’ polished diamonds.

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2. The State Archive of the RF. Ф. 5446. О. 49а. Д. 1744. Л. 2. The letter of the Ministry of finance of the USSR about the ‘Rose’ polished diamonds for the Ministry of machine building and instrument-making of the USSR.

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3. The State Archive of the RF. Ф. 5446 О. 49а. Д. 1744. Л. 7. The instruction of the Council of Ministers of the USSR about the ‘Rose’ polished diamonds.

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4. The State Archive of the RF. Ф. 5446. О. 12а. Д. 351. Л. 2. The letter of the People’s Commissar of Foreign Trade of the USSR about the reevaluation of the Diamond Fund. From the document, it shows that the Diamond Fund is considered as an export asset only.

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