A few years ago, we commissioned the writing of a book on the history of GIA. Researched and written by Bill Shuster, Senior Editor of JCK magazine, the manuscript is now complete and has entered the final editing process. This has been a Herculean effort, not dissimilar to the creation of GIA itself by founder Robert M. Shipley. The book is slated to debut, appropriately, at the American Gem Society Conclave in Austin, Texas, in April 2003.

Robert Shipley founded both GIA (in 1931) and AGS (in 1934), as he pursued his goal to professionalize the industry. Specifically, GIA’s purpose was the “advancement and practical study of gemology by jewelers and others and the furtherance of a greater appreciation of diamonds and gems on the part of the American people.” AGS was GIA’s original alumni group – a professional guild of trained, ethical jewelers, a mandate still ardently held by Society members today.

The story of the founding and building of GIA, in the depths of the Great Depression of the early 1930s, is both amazing and inspiring. In this and several subsequent Insider messages, I will try to give you a flavor of that history, highlighting key people and key concepts that were important to the times.

By 1930, gemological ignorance in the trade was so widespread that T. Edgar Willson, editor of the Jewelers’ Circular, then the most influential publication in the industry, felt compelled to write an editorial titled, “The Jeweler Must Know Gems.”  In it, Willson wrote that so many jewelers were “so greatly deficient [in gem knowledge] they reflect on the reputation of the trade as a whole. . . .  it is only the man who can . . . impress his customers with the fact that he knows his subject who can reasonably expect to make any impression on a prospective buyer of fine jewelry.”

While we have come a long way as an industry over the last seven-plus decades, Willson’s words seem strikingly contemporary. Most of us would agree that gem knowledge behind the counter of jewelry stores across America and around the world must be constantly improved to maintain the confidence of the consuming public. Sales people must have the product knowledge necessary to, as Shipley stated, further “a greater appreciation of diamonds and gems on the part of the American people” and people of all countries and cultures. And the technical expertise of jeweler-gemologists must be continuously enhanced to keep up with today’s increasingly sophisticated gemological challenges.

Shipley’s original concept was that jewelers must be as professional as, for example, doctors and lawyers, so they can just as knowledgeably and ethically serve their constituency, the consuming public. This continues to be GIA’s goal: to equip jewelers with the skills, instruments, and laboratory and research services necessary to meet the challenges of the profession. Only as professionals can we protect our precious products and preserve the public’s trust in gems.

The Hong Kong Jewellery and Watch Fair, Sept 25–29, got off to a cautious start, though many exhibitors felt encouraged by strong first-day traffic. More about the Hong Kong show is detailed in the trade section, below. At the same time, the National Retail Federation (U.S.) predicts that holiday retail sales should show a healthy 4% growth this year. Its rationale is that incomes remain strong, unemployment is not rising quickly, and interest rates are low.

A JCK poll found that independent jewelers were evenly split over the coming holiday season: the majority (54%) believes this season will be better, while the remaining jewelers (46%) said the selling season would not be as good. Last year’s holiday season proved much better than expected.

Within this atmosphere, suppliers are gearing for a decent holiday season, even if caution reigns among retailers and consumers.

TRADE: This week’s De Beers Diamond Trading Company sight is estimated to be about $450 million, with many clients seeking additional allocations. Rough diamonds have become scarce, so premiums (which had been declining in recent months) may rise if demand picks up. Manufacturers want to get ahead of any potential price increases.

Demand and prices at this week’s major pearl auctions in Hong Kong were also quite firm.  Both the Paspaley Pearl Company’s South Seas Pearl auction and Robert Wan’s Tahiti (black) Perles auction attracted major buyers.

Bruno Wan, of Robert Wan, said that confidence in black pearls among both members of the trade and consumers is returning because the French Polynesian government, of which Tahiti is a part, is making good on its promise to restrict exports of the low-quality goods that had flooded the market until last year.

“The government banned exports of low-grade goods and set a minimum nacre thickness of 0.8 mm,” he said. “People are paying attention to these regulations and the government is enforcing them, so few low-grade pearls are getting out. This has gone a long way to stabilize confidence in pearls.”

However, some pearl dealers closer to the retail end of the chain find that demand is flagging, especially in the top qualities. This worries one major dealer: “We did a good job of clearing out excess stocks earlier this year. We may have to do it all over again, if retail demand doesn’t meet expectations.”

Opening day of the Hong Kong Jewellery and Watch Fair was marred by the theft of  an estimated HK $23 million worth of diamonds in three separate incidents.

One Antwerp dealer reported that his safe had been emptied the night preceding the show opening. He claimed that his inventory of 200 diamonds, valued at HK $15.5 million, was gone.  In another incident, a “customer” at an exhibitor’s booth allegedly made off with a lot of 90 diamonds, valued at HK $6 million, when the exhibitor became distracted by another buyer.

The third incident apparently happened during unloading, when someone stole a case of diamond jewelry that was valued at HK $1.5 million.

RETAIL: In the U.S., analysts will be looking closely at third-quarter results. Most expect them to be fairly weak because of the bleak news of renewed declines in the stock market, uncertainty over a war with Iraq, and additional fallout from corporate scandals.  The stock market began its real slide in late June and was thought to have hit bottom in early August. Consumer confidence went down with the Dow Jones/NASDAQ/S&P 500 and showed faint signs of revival until last week.  Now the market seems to be testing the bottom again.

Nevertheless, it’s certain that retail sales will still show big increases over last year. The increases will come from the fact that sales took a precipitous drop immediately after the 9/11 attacks and stayed low for several weeks. Most third-quarter results last year showed a 6% to 10% drop in sales, which in the majority of cases had been running ahead of 2000, through 9/10.

Another factor that will bear watching is discounting. Last year many retail jewelers – especially the mall jewelers – made their numbers at the expense of profits. Discounts were heavy and increased through the fall.

MACRO: Overall holiday retail sales growth should be healthy this year, despite the weak back-to-school season that just ended. The National Retail Federation (NRF) released its forecast for a 4.0% increase in 2002 holiday retail sales, down from 5.6% growth last year, but similar to the 4.3% gain seen in the 2000 holiday season.

The Conference Board reported this week that its index of leading indicators declined for the third straight month. The 0.2% decline was higher than most analysts had estimated and probably convinced the Federal Reserve to keep interest rates at historic lows.

The Federal Reserve Beige Book, a monthly economic survey, indicates little momentum in the U.S. economy outside of vehicle sales and housing (and related goods), as the still-tentative economic recovery proceeds at an uneven pace. Many firms are waiting for clear signs of improved conditions, and as such they are still unwilling to take on new capital expenditures or expand the size of their workforce. According to the report, manufacturers are “less optimistic than they were earlier in 2002.”

Russell Shor
Senior Industry Analyst

Over the last several months, there has been extensive discussion and research related to the color-enhanced yellow and orange-to-orangy pink sapphires that have been treated mainly in Thailand. The cause of color in these stones has been a major focus of the investigation into this new treatment, which scientifically is referred to as bulk or lattice diffusion.

But not all of the issues concerning bulk diffusion of yellow coloration into sapphire have revolved around the source of color. At the extreme temperatures required for this treatment, many other changes can take place. One of these is the partial dissolution of the corundum in the crucible (and potentially of the walls of the alumina crucible itself) through contact with fluxes, which can create an environment where synthetic corundum grows on the surface of stones. During our research on this new treatment, we have seen many examples of corundum “redeposition” on treated rough and preformed samples, often as groups of minute flat hexagonal platelets. Most of this synthetic corundum is removed when the stones are finished, but we have seen a number of examples—most commonly the treated yellow sapphires—where some of this material was left on the polished stone. Ken Scarratt, of the AGTA Gemological Testing Center, first published his observations on this phenomenon April 19, 2002, on the AGTA Web site.

The examples we have seen of synthetic growth on bulk-diffused sapphires have been quite different from past cases where the synthetic overgrowth has been intentional, such as with Lechleitner synthetic overgrowth on beryl or corundum. In those gem materials, the crystallographic orientation of the overgrowth has been consistent with the orientation of the base material. Synthetic corundum growth on the bulk-diffused sapphires is entirely random in orientation and tends to form clusters of tiny crystals. After the stones are polished, this random orientation manifests itself in two ways that make it relatively easy to identify the presence of synthetic material.

First is the appearance of the overgrowth in a microscope. With darkfield illumination, these areas look roiled, somewhat like areas of graining, although they are much more isolated than one would expect for natural graining. With transmitted light, however, it is possible to see the edges of many of the individual crystals within this roiled zone.

Second is the reaction of the areas of overgrowth to cross-polarized light. Because the synthetic crystals are randomly oriented, their directions of extinction should be different from one another, as well as from the host material. With proper orientation (which may require changing the position of the Polaroid plates or the stone), and with the host stone in the dark position, many of the synthetic crystals will be in their light position, which can be viewed easily in the microscope (see figure).

To help meet this identification challenge, gemologists must be aware of the possible presence of a synthetic overgrowth and know what it looks like.

For more updates from the GIA Gem Trade Laboratory, see the Gem Trade Lab Notes section of Gems & Gemology. To subscribe, visit www.gia.edu/gandg or contact Subscriptions Manager Debbie Ortiz at dortiz@gia.edu. Call toll free 800-421-7250, ext. 7142. Outside the U.S. and Canada, call 760-603-4000, ext. 7142.

Editor’s Note: This report was prepared by Shane F. McClure, director of West Coast Identification Services, GIA Gem Trade Laboratory, Carlsbad.

Understanding the scientific method has become increasingly important for members of the diamond industry. Manufacturers, dealers, and retailers continually make important business decisions, and these decisions are often based on competing claims about diamond appearance, especially as it relates to the diamond’s proportions. These competing claims make the scientific method essential, because only through research conducted using the scientific method can we critically evaluate the basis of these claims (i.e., the assumptions or hypotheses on which they rely). By comparing different claims in this way, we are better able to determine which claims have the highest validity, and this allows for more reliable business decisions.

The scientific method (as it is now understood) was described by Karl Popper in 1934. Before then, the method of induction often was used to find truths about the world. Induction assumes facts about the world solely through the observation of instances, that is, empirical evidence (e.g., we notice that all of the grapes we have eaten in the past had seeds, and therefore decide “all grapes have seeds”). Unfortunately, induction has several weaknesses.  For example, researchers may never know if they have seen a complete sample of the instances in question (e.g., we may never have eaten seedless grapes).  Also, there is a possibility that conscious or unconscious observer biases may affect the results (e.g., we may think that all grapes should have seeds, and so all seedless “grapes” are not really grapes at all).

Nevertheless, although one can never conclusively prove the truth of a claim through empirical observations, one can disprove it through observations of negative instances, which is called falsification.  Falsification leads to critical and rigorous science by testing for ways in which a currently held or proposed claim might be false or inaccurate (e.g., we purposefully examine all types of grapes that we can find to see if we can locate a grape without seeds).

The root of any claim or theory about phenomena in the world is an idea. The idea is stated as a hypothesis (i.e., a clear prediction of a phenomenon’s nature or behavior in a given situation). This hypothesis must be formulated in such a way that suggests a test or experiment that can prove it false (e.g., “All grapes have seeds”).

In addition, the hypothesis must have specified testing procedures that are detailed and repeatable.  This allows future falsification tests to be conducted by any group of scientists; the more independent falsification tests a hypothesis withstands, the more reliable and valid it becomes. Once a hypothesis has been validated, another important step in the scientific process is to publish it, along with its testing procedures, in a peer-review journal. This encourages further scrutiny of the hypothesis and its results.

Computer modeling sometimes may be used to provide another level of predictive power. In these cases, a falsifiable hypothesis would be formulated to test whether a computer model provided accurate results (e.g., whether it gave similar results to another form of testing, such as observation tests).

Additionally, mistakes are often a crucial part of the scientific method.  Rigorous testing sometimes brings to light new aspects of a hypothesis or aspects that need to be tested further. These further tests may lead to amendments to the hypothesis or even its replacement with a new, and hopefully more accurate, version.

The only absolute certainty one can have in science is that a particular hypothesis is false.  However, the more falsification tests a hypothesis withstands, the more justified one is in believing it to be valid. A hypothesis that withstands this scrutiny becomes known as a theory.  However, even accepted theories are provisional, and eventually may be proven false and replaced.

Because all truths are “provisional” in science, scientific truth often creates difficulties for the practical world of business. Businesses are forced to make policy decisions based on theories that are reliable, but are never absolutely certain.  Such hypotheses must be submitted to the most rigorous falsification tests possible to insure that policy decisions are based on valid and reliable hypotheses.

Click here  to view an expanded version of this discussion along with its references.

Editor's Note: This report was prepared by Mary Johnson, Ilene Reinitz, and James Shigley.

When you grade a star stone, you should consider the quality of the star and the gem’s bodycolor, cut, and clarity. The best star corundum is semi-transparent, but most star rubies and star sapphires are translucent or opaque. In the best gems, the bodycolor is similar to fine-color ruby or sapphire, although dealers often allow more purple in the color of star ruby. Inclusions tend to reduce saturation, and the resulting brownish or grayish bodycolor can diminish value considerably. Use a standard daylight-equivalent fluorescent grading light to judge the gem’s bodycolor.

To examine the star, hold a penlight about 6 in. (15 cm) from it. Move the light back and forth to see how the star moves across the stone’s surface. The star should be sharp and intense, and the rays should be straight and evenly spread, not “pinched.” The star should be complete, with no missing rays. It should be centered at the top of the dome, and it should extend across the entire stone. It should “roll,” or travel, easily across the surface of the cabochon as you move the light back and forth.

The cabochon shape should be pleasing and symmetrical. The dome must be fairly high in order for the star to be sharply focused. If the dome is too shallow, the star will be weak, and it will lack sharp contact of the rays at the center. Check to see if there’s excessive weight below the girdle – it shouldn’t amount to more than 20 percent of the gem’s total depth. Look for chips at the girdle.

You can test the gem’s symmetry by spinning it on its base on a flat surface. If the stone “wobbles,” or the star seems to move back and forth, the stone is asymmetrical.

As with chatoyancy, there’s a very fine balance between transparency and the definition and intensity of the star. Too much silk will make the body appear translucent or opaque, but if there’s too little, the star will be faint. The best star corundum has fine transparency with just enough silk to show a well-defined star. It should be free from strong color banding, cracks, and other distracting inclusions. If the cracks reach the surface, they might trap dirt and weaken the stone. Surface polish should be good, without any imperfections that disturb the movement of the star across the surface.

This discussion on asterism and evaluating star gemstones is part of GIA’s Colored Stones course, and it is also in GIA’s Colored Stone Grading Lab manual. For additional information on GIA courses and diploma programs, click here, or email  eduinfo@gia.edu, or call 800-421-7250.

Job seekers interested in the glamorous and lucrative world of gems and jewelry can meet with some of the world’s most prominent gem and jewelry companies for an exciting day of recruiting, networking, interviewing, and career counseling Oct. 18 at GIA’s Jewelry Career Fair and Open House in Carlsbad, Calif. Spaces are still available for firms who want to recruit for qualified candidates to fill openings.

Among the many top companies already scheduled to recruit are Tiffany & Co., Ben Bridge Jeweler, Robbins Brothers, and Zale Corporation.

Acclaimed as the jewelry industry’s largest and most successful recruitment and career opportunity event, GIA’s Jewelry Career Fair is open to everyone. The event will feature panel discussions and career counseling with many of the jewelry industry’s leading executives and noted experts. The generosity of these leaders in volunteering their time and effort to the event is an integral element to the success of the event. For example, job seekers will learn about hiring trends in the jewelry industry, elements for starting your own jewelry business, and survival tactics for new designers. In addition, GIA President William E. Boyajian will personally present an inspiring and motivating seminar on effective tools for creating a successful career in the jewelry industry.

Last year, more than 600 participants took advantage of learning how to set career goals, meet objectives, and develop a career strategy – as well as how to create a more effective resume. “I met some really good companies that went the extra mile in helping me,” said 2001 participant Julie Murray of Toronto, Ontario, Canada. “This was definitely worth the while.”

This year’s Jewelry Career Fair in Carlsbad will present the same dynamic opportunities for those attracted to an exciting career in this industry. The Institute currently has hundreds of positions in its job database, and many more need to be filled through Career Fair. The event will also be an open door occasion for those who are curious about GIA to visit the expansive 18-acre campus overlooking the Pacific Ocean and see all the Institute has to offer.

Jewelry Career Fair, founded by GIA and The 24 Karat Club of Southern California, is sponsored by The VNU Jewelry Group. The event begins at 8:30 a.m. – with recruiting beginning at 9:30 a.m. – and concludes at 3:00 p.m. It will be held at GIA’s world headquarters at 5345 Armada Drive, Carlsbad, Calif. For more information, call GIA’s Jewelry Career Fair hotline at 800-421-7250, ext. 4100, visit the Career Fair Web site, or email careerfair@gia.edu.

GIA GEM Instruments is offering new special discounts to Alumni Association members. Items include a handheld Darkfield Loupe that highlights small inclusions for easy detection, and the book, Photoatlas of Inclusions in Gemstones, by Dr. Edward J. Gübelin and John Koivula, Chief Research Gemologist for GIA.

To learn more about these Alumni specials, or to purchase online, click here. To request the latest GEM Instruments catalog call (760) 603-4200 or e-mail GEM@gia.edu.

For newcomers who wish to discover the exciting world of gemstones, diamonds and precious metals, or for professionals who want to update their skills, GIA’s traveling Extension classes are the perfect means to learn and acquire new skills. Become a world renowned Graduate Gemologist soon by completing your core requirements in Kansas City, Portland, Carlsbad and New York City.

With Kansas City Extension classes already in full swing, time is running short, so be sure to sign up right away for these classes: Advanced Diamond Grading Lab (Saturday, Sept. 21); Detecting Synthetic Diamonds and Synthetic Moissanite (Saturday, Sept. 21); Advanced Gemology (Sunday, Sept. 22); Gem Identification (Sept. 23-27); Colored Stone Grading (Sept. 30-Oct. 2); and the one-day Pearl Grading class (Oct. 3). Student Lab will also be open Sept. 24-27 (nights) and Sept. 28-29 (days).

Portland, Oregon is the host of several upcoming Gemology Extension classes, however, spaces are limited, so sign up for these classes now: Diamond Grading (Oct. 14-18); Advanced Diamond Grading Lab (Saturday, Oct. 19); Detecting Synthetic Diamonds and Synthetic Moissanite (Saturday, Oct. 19); Advanced Gemology (Sunday, Oct. 20); Gem Identification (Oct. 21-25); Colored Stone Grading (Oct. 28-30); and the one-day Pearl Grading class (Oct. 31).

In Carlsbad, GIA’s world headquarters, seats are rapidly filling for these popular Jewelry Manufacturing Extension classes: Platinum Fundamentals (Sept. 30-Oct. 3); Advanced Setting (Sept. 30-Oct. 14, night class); CAD/CAM (Oct. 7-18); and Casting 1 (Oct. 7-11).

To enroll, or for more information on these classes, or any GIA Extension classes held throughout North America, please call 800-421-7250, ext. 4001, e-mail eduinfo@gia.edu.

Don’t forget Extension classes in the Big Apple! Diamond Grading (Oct. 5-Nov. 2 Saturdays only) and Advanced Gemology (Oct. 14) are almost full, so sign up at once. To reserve a space for any New York Extension classes, please call 800-366-8519, ext. 3063.