India was the only known source of diamonds during the Middle Ages, and merchants of Venice and Genoa controlled their importation into Europe. But when the Portuguese discovered the sea route to India in 1497 they were able to cut the Italians out of this as well as the spice trade. Most of the jewellers in Lisbon being New Christians,1 as forcibly baptized Jews were then called, they came to be the principal buyers of unpolished or rough diamonds there. Since the king of Portugal's factory or agency at Antwerp was the staple for pepper and other Portuguese colonial products In the six? teenth century, it also became a staple for rough diamonds.
The economic characteristics of the diamond industry are unique. Polishing large gemstones is capital intensive and polishing small stones is labour intensive. This meant that it was profitable to polish large stones close to the market, in cities like Nuremberg, Florence, Madrid, Paris and London, but small stones in specialist centres, where low wages and the division of labour minimize the costs. Antwerp became such a centre in the sixteenth century, but this changed after 1648 when its port was closed and the Antwerp diamond-polishers' guild limited recruitment. In Amsterdam, which took over the role, the majority of gemstone merchants were Portuguese Jews. As the main buyers of rough diamonds, they financed the industry by putting their stones out to the diamond polishers, very few of whom were Jews,2 and organized the sale of polished stones to jewellers in all the capital cities of Europe.
Trade in gemstones requires the facilities of a major city, low interest and insurance rates, reliable law-courts and a secure and efficient postal service. Because diamond gemstones cannot be sold by sample and take time to sell,
1 This is clear from the petition of the Old Christians for representation in the government of the goldsmiths' guild. Virgilio Correa (ed.) Livro de Regimentos dos Offici?es Mec?nicos da mui nobre e sempre leal cidade de Lixboa (1572) (Coimbra 1926).
2 E. R. Samuel, 'Manuel Levy Duarte (1631-1714): An Amsterdam Merchant Jeweller and his Trade with London' Trans JHSE XXVll (1984) 17.
the wholesaler has to be ready to give long-term credit. In order to survive, he needs to know, without delay, of any change in the personal circum? stances of a customer which might make him no longer worthy of trust. This calls for a network of reliable gossip, which is why successful gemstone mer? chants usually come from minority communities. These form social villages within the city and are well provided with gossip. The Italians formed such urban villages in fifteenth-century Bruges, Nuremberg, Paris and London. In the seventeenth century the Portuguese Jews of Amsterdam, Hamburg, London and Venice had this characteristic.
The big merchants used to assemble buying commissions from merchant jewellers, who were prepared to invest in the trade. Spanish coin would be despatched to India earmarked for the individual investors. By acting together, the competing merchants and jewellers could raise larger sums and invest them