Street of Glitter

The street is a long line of hole-in-the-wall shops. From the sidewalks rises a babble, mostly in the English peculiar to New York, but also in Russian, German, Yiddish, Hungarian, Flemish and Dutch. Plainclothesmen unobtrusively roam the block, and inside the buildings armed guards watch passers-by through bulletproof windows. But for all its crowded and wary atmosphere, Manhattan's West 47th Street is the most sparkling street in town because it is the hub of the U.S.'s $500 million annual diamond market.

Through the hands of West 47th Street's 400 dealers, 200 cutting firms and scores of sawyers, brokers and retailers, pass 80% of the polished diamonds produced in the world each year. The New York diamond market centering on a single West 47th block serves 99% of the nation's retail jewelers and is the world's largest seller of "sizes," i.e., diamonds of more than 1 1/2 carats.

Shortage of Stones. Last week there was a rush of summer activity on West 47th as European buyers patrolled the street in search of fine stones. The newly affluent Europeans are now competing in ever-increasing numbers for the better diamonds that in the lean years after World War II went almost entirely to the U.S. market. Their demand, on top of the slowdown in the flow of new diamonds coming from the Congo and South African mines because of racial and political upheavals, has driven up prices, e.g.. a flawless, two-carat blue diamond that retailed for about $3,500 on West 47th Street only two 1/2 years ago, can now easily command $4,000. Furthermore, the great De Beers "Syndicate," which sells 95% of the world's total rough diamond production, still rations stones to dealers on West 47th Street as well as to those around the world.

Unlike two other famous Manhattan business streets. Madison Avenue and Wall Street, West 47th is virtually a closed corporation--except to men with relatives in the trade. "A man's knowledge is his livelihood," explains Dealer David Ruff. "You make a decision a minute, and it's easy to make a costly mistake." Most wholesale dealers have small shops, sell at a 5% or 7% markup, employ brokers who do the actual leg work for a 1% or 2% commission. Nearly 80% of the West 47th Street trade is wholesale, but there is also a thriving retail business. ''There are some real bargains here." says one dealer. "But you've got to be in the business to spot them.''

Settlement by Handshake. So entrenched are relationships in the trade that most transactions are based on simple confidence. Deals involving hundreds of stones are sealed without a count by a handshake and the binding Yiddish phrase: Mazel und brocket (Good luck and blessings) that is used by Jewish and non-Jewish dealers alike the world over.

To enforce the street's reliance on mutual trust, however, there is an extraordinary extralegal judicial system maintained by the two diamond clubs that function as West 47th Street's stock exchanges or trading centers. Arbitration panels meet as needed to settle disputes between traders. If a man is found to be dishonest, he can be expelled from the club, cannot use the facilities of any other diamond club in the world. Says one top diamond man: "That's the biggest motive a fellow has for behaving himself."

This file is automatically generated by a robot program, so reader's discretion is required.