Part 2 - Escape from Italian Prison Camps
Chapter 12 - The Role of Diamonds
"Diamonds are a Swiss Best Friend"
"Boorts" or industrial diamonds are an essential part of machine tools, "jewelled" precision bearings and other highly sophisticated small parts for the production of armaments and equipment on which the modern technological armed forces of the world rely. In times of war, they are absolutely vital to the industrialists of all countries whether belligerent or neutral, who are expanding their production to meet the demands of war.
While Switzerland produces no diamonds of any quality, it was and is, an important manufacturing and trading centre for world famous watches and watchmaking equipment and thus heavily reliant on "jewelled" precision parts and tools.
In his fictionalised story of Adam Lockyer in "A Long Time" (G2 p91) NX12808 Narrator Arthur "Jim" Kinder of the 2/13th Bn emphasises this importance:
"Just before the outbreak of the war in 1939, the strategic importance of diamonds became apparent to the Allies and Axis powers. Many millions of precision parts were necessary in the mass production of aero engines, torpedoes, tanks, artillery and other weapons. Diamonds, because of their hardness, were required for the stampings for many of these parts. Diamond too was the only known substance that could be used in drawing fine wire for radar and electronics applications. As in the most expensive and accurate chronometers, diamonds were the only source of jewelled bearings for stabilisers, gyroscopes and guidance systems for aircraft and submarines. Diamonds were the source of abrasives which facilitated the most rapid conversion of civilian industries into those for war. A stable and continuing diamond supply was necessary to further the prosecution of the war. Without them the war would have stopped.
"At the time, most diamond mines were closed and, as later, the largely British-based company De Beers, controlled the world diamond market. A supply of industrial diamonds was imperative to both the United States and Germany. The American President, Roosevelt, held several emergency meetings about diamonds during 1940 when the German armies were moving across Europe - the "blitzkreig" - and when the invasion of Britain seemed imminent. It seemed that England would follow France into submission and be obliged to surrender. Most of the world's stockpile of diamonds was in London, as ever, and unbeknown to most people, and it was a possibility that this might fall to Hitler. In that year the United States had less than a years supply of industrial diamonds. If De Beers stockpile were forfeited, continuing prosecution of the war would be unlikely.
"Estimations were that America needed six and a half million carats of industrial diamonds for its factories to move into production for war. Roosevelt, when he heard this directed that the diamonds required be purchased from De Beers. America was then regarded by the Allies as the "arsenal of democracy" and Roosevelt assumed that De Beers would acquiesce. De Beers had other considerations as the diamond monopoly depended on control of the stockpile. If a significant proportion of the stockpile was to move from London to New York, it would no longer be controlled by De Beers, and this, by policy, was unattractive. Negotiation continued, but De Beers's Chairman, Sir Ernest Oppenheimer, vehemently opposed the movement of diamonds to America.
"What he did not want, in the event of a swift end of the war, was a stockpile in America and outside his control. Diamonds in this event could be released indiscriminately onto the market, and this would adversely effect the monopoly. He felt that the Americans had enough diamonds anyway, and that selling to the Americans in instalments was satisfactory.
"The Americans were not at all pleased by Oppenheimer's attitude and believed that De Beers were tacitly, or even intentionally, putting the Allied war production at risk. Roosevelt directed his State Department to deal directly with Churchill's war cabinet, but it met British government reluctance to put pressure on De Beers. American intelligence reports showed that those in the British government responsible for taking action in this regard were former De Beer's executives. Eventually in 1942, Roosevelt threatened interruption of aircraft supply to the British if the syndicate would not sell the desired diamonds. De Beers eventually agreed to an immediate supply of one million carats, fourteen per cent, and to the establishment of a diamond stockpile, under De Beers control, in Canada until the end of the war. This did not entirely please the Americans who continued with their demands for the remaining five and a half million carats. The aircraft crisis was over by this time and De Beers continued to procrastinate.
"They made claims that there were insufficient diamonds in the London stockpile to cover the request and a later story was that the vaults had been bombed shut during an air raid. After a year, De Beers claim was that time was needed to inventory the available diamonds. Eventually, even the Americans, who had difficulty in accepting that not everyone would do their bidding, realised that there would be no significant diamond stockpile established in Canada or America. De Beers through all this negotiation reduced the quality diamonds it supplied to American industry. This had the effect of rising prices by sixty per cent. The official price per carat remained the same but manufaturers had to buy more low quality diamonds to make tools and dies because they wore out more quickly.
"Through all this, and American Overseas Security Service (OSS) and FBI investigations into De Beers monopolistic activities, Hitler continued to get diamonds, right up until the end of the war. In late 1943, Hitler had about an 8 months supply of industrial diamonds. If these ran out, Hitler's military efforts would have been over as he would not have been able to build V-2 rockets, or any of the notable weapons for which the Germans became known. For the Allies, logically, Hitler should have been prevented from gaining further diamond supplies.
"All mines in South Africa were closed but still there was one source of industrial diamonds, the Belgian Congo, which was governed in exile in London and so was British controlled. De Beers supervised the mine. Diamonds were getting to the Axis powers, through Tangiers and Cairo, facilitated by agents masquerading as illegal buyers who were paying thirty times the official price. The diamonds were smuggled out of the Belgian Congo to Germany in Red Cross parcels. In this and other ways, De Beers disposed of a lot of the German stockpile during the war.
"All through the war, Germany depended on the British for diamonds as no synthetic substitutes were available. Gem quality diamonds were being smuggled into the New York market and these were traced to Jewish owners consigned to concentration camps. The gem diamonds then reached America directly from Germany. The Nazis, through agents, sold the gem diamonds and used the proceeds to buy industrial diamonds in Brazil. These were shipped to Germany through Switzerland. The industrial material most sought by the Germans was powdered diamond dust used for grinding wheels. Nothing else is known of this peculiar arrangement - the Geleightshein Agreement". (See "The Diamond Invention", Epstein, Edward Jay, 1982. Hutchinson Group (SA) Pty. Ltd., PO Box 337, Bergvlei, 2012, SA.)
David E. Walker, a well-known Foreign Correspondent, published a book "Adventure in Diamonds" in 1962, later re-published in 1974 by Mayflower Books Ltd. Frogmore St. Albans, Herts. AL2 2NF as "Operation Amsterdam" in which he fictionalises a British commando operation on the Dutch port of Ymuiden as the Germans in May, 1940 in the midst of the blitzkrieg on Belgium and Holland.
The purpose of the mission was to deny to Germany the very large stocks of diamonds, particularly of industrial diamonds held in nearby Amsterdam.
At a time when every British naval vessel was in urgent demand, an aging but effective British destroyer the H.M.S. Walpole (Lt. Commander H. G. Bowerman, RN) was given orders to take three passengers to the Dutch port of Ymuiden without delay, to keep out of trouble itself, and bring them safely back to England. The three passengers were an army Major and two civilians, whose exact identities remain secret to this day. But there is little doubt that at least one of the civilians was a "De Beers Man", who would have been personally known to all the senior personnel of the organisation that controlled the diamond industry in Amsterdam.
The Lt Commander carried out his orders to the letter. Over the Witsun weekend, May 1940, he sailed from Harwich with his three passengers on the Saturday, and arrived back with them, their mission successfully completed on the Monday. On Tuesday May 14, 1940, the Dutch Commander-in-chief broadcast the message "We have been forced to lay down our arms".
But the Netherlands was by no means out of the war she never expected to have to fight. Only a small proportion of her 3 million tons of shipping had been captured. Another British warship had brought the Prime Minister and Government with Queen Wilhelmina to England. Yet another had brought Princess Juliana and her children, ultimately to go to Canada. The huge Shell petrol refineries and storage complexes had self-destructed and two/thirds of their oil had gone up in smoke. Rotterdam had been blitzed into oblivion, but a resistance movement was already being established to fight on underground.
The enemy had been able to seize some valuable diamond cutting machines and equipment, already packed for dispatch to England, but most of what they most urgently required, the stockpile of industrial and precious diamonds had vanished under their noses.
And yet, one way or another, Switzerland's supply of industrial diamonds never seems to have faltered.
If the bombing of Schaffhausen was indeed planned and not simply a mistake caused by a bend in the Rhine, it might just have deprived the Germans of their last supplies of "jewelled" bearings.