An antitrust case in the diamond industry: The United States v. the De Beers cartel (1948)

Abstract

This paper examines an antitrust case filed in 1945 by the United States Department of Justice against the diamond cartel led by the South African firm De Beers. By the end of the interwar period, the Belgian Congo firms in the cartel were the largest producers of industrial diamonds in the world. Demand for this product had stagnated during the interwar period but increased during World War II, as industrial diamonds were needed by the arms industry. This resulted in a partial shift of De Beers’ production away from jewellery diamonds to support the allied war effort. This article focuses on the background of the case and engages with reasons why the Department of Justice filed the complaint. It examines the De Beers production historically, before investigating the lawsuit’s arguments. The strategic importance of the US diamond stockpile was the central issue. The paper considers the historiography of the diamond industry and discusses historians’ hypotheses regarding the case. Although dismissed in 1948, the case resulted in changes in the cartel’s organisation and in greater scrutiny of De Beers’ activities. The case marks a turning point for the cartel, which then entered an adaptation phase that ensured its survival until nearly the end of the century.

Keywords:

• Cartels
• antitrust
• diamonds
• United States
• Belgium
• South Africa
• Congo
• Angola
• mining
• luxury
• advertising
• arms industry

1. Introduction

The United States Department of Justice (DOJ) filed an antitrust lawsuit against the De Beers diamond cartel and a number of cartel members in the New York State courts in 1945. This paper examines the history of the case, the reasons for the decision to drop the case in 1948, and the influence it had over the diamond industry. Despite the fact that the United States v. De Beers et al. case was dismissed, this lawsuit marks a turning point in the history of De Beers and, more broadly, in the international politics surrounding cartelised post-war industries (Fellman & Shanahan, 2020, pp. 196–197; Ingulstad, 2015, pp. 70–73). This study is based on the archives of two of the defendant firms, Bécéka (Société minière du Bécéka) and Forminière (the Société Internationale Forestière et Minière du Congo), both members of the De Beers cartel. These documents are in the Sibéka archives at the Archives Générales du Royaume in Brussels, Sibéka being the new name given to Bécéka during decolonisation. These archives are the most complete available on the antitrust case, allowing a thorough examination of the court case and of the activity of the cartel firms involved, led by South Africa-based De Beers during the immediate post-war years. Congo (today the Democratic Republic of Congo) was a relatively new entrant in the cartel, since Forminière and Bécéka were founded three or four decades after the first South African mining operations (Newbury, 1989, p. 366; Reekie, 1999a, p. 107). At the end of the interwar period, Congo was the largest producer of industrial diamonds in the world, and South African production was lower than before, amounting to between 10 and 20% of the world production in caratage (De Vries, 2010, p. 18; Reekie, 1999b, chapter 5 (n.p.)). This is thus a less researched part of the diamond cartel’s history than that of its South African foundations, expansion, and leadership, and of the London-based corporation that centralised the operations of transformation, marketing and sales (Newbury, 1987a, pp. 1–42; 1987b, pp. 5–26; 1995, pp. 1–22; 2016, pp. 101–124; Reekie, 1999b). Based on this new evidence, the paper asks what the reasons were for the US to file this first antitrust case against the cartel. The cartel was in operation for half a century before the US filed a case. Research for this paper examines why the DOJ filed the case: was it to guarantee the US stockpile, or were there other reasons? Previous publications have indicated rivalries between diamond trade cities, and suspicions that diamonds were leaked to the enemy, for instance. This paper uses the new evidence from the archive to examine the relevance for the case. The second section in the paper reviews the secondary literature. The third section contextualises the case in terms of the cartel’s history. The fourth section turns to the secondary literature that has addressed the issue of potential leaking of diamonds to the Axis powers. The fifth, sixth, and seventh sections examine the three arguments that the DOJ used in court to support the antitrust action, and show that these arguments were not sufficient for the DOJ to win the case. The eighth section turns to the dismissal of the case, and the influence that the case nonetheless had in the history of cartels. The conclusion summarises the findings and establishes the case as a turning point in the history of the diamond industry.

2. Secondary literature

Works on the history of cartels as economic organisations are used here to contextualise the antitrust case (Fellman & Shanahan, 2015, 2020, pp. 195–203; Gooding, 1998, pp. 4–5; Ingulstad, 2015, pp. 70–73; Shanahan & Fellman, 2022, pp. 1–24; Storli, 2014, pp. 445–467). A significant publication among the secondary literature in this article is the Bécéka company history by Odile De Bruyn, who was in charge of cataloguing the firm’s archives (De Bruyn, 2006, 2007). Scholars have examined the production conditions, which varied across countries and chronological periods, and the specificities of the diamond trade, which was international from its start and which relied on mutual agreements rather than legally written contracts (Cayen, n.d.; De Bruyn, 2006, 2007; Lancsweert, 1946; Le diamant au Congo belge, 1946; Moyar, 1959; Orru et al., 2007, pp. 173–207). This reliance on highly internationalised networks and simultaneously on interpersonal norms fostered discipline within the diamond cartel and contributed to its stability for most of the twentieth century (Berger et al., 2020, pp. 123–148; Bernstein, 1992, pp. 115–157; Lamoreaux & Sawyer, 2019; Levenstein & Suslow, 2011, pp. 455–492; Storli, 2014, pp. 445–467).

Important historical works examine the De Beers cartel formation and growth, with significant attention being given to the leadership of founder Cecil Rhodes and continuator Ernest Oppenheimer. Colin Newbury distinguishes Rhodes’ activity as a businessman from his work as a statesman, although he sees continuities between Rhodes’ different roles, his manoeuvring, and his placement of elites in strategic positions. The Guggenheims brought more structure to their management of the cartel’s finances (Newbury, 2016, pp. 101–124). De Beers invested significantly in Forminière and Bécéka, new entrants whose production had to be reined in to preserve the high and stable value of the stones. The mining operations in Congo worked in constant collaboration with the Brussels headquarters, which in turn maintained a dialogue with the Belgian government and the Ministry of the Colonies, based in Brussels (De Bruyn, 2006; Declercq, 2020, pp. 249–266; Hillman, 2010, pp. 144–145). The attention from Belgium is congruent with a colonisation phase characterised by a compliance with Western modernisation and industrialisation, along with philanthropy programmes (Nzongola-Ntalaja, 2002, pp. 66–77). Duncan Reekie has discussed the reasons why cartel members pursued collaboration and, after examining the economic conditions of the cartel members’ association, concludes that it was a marketing arrangement, rather than collusion, that kept the cartel members together. The same factor is also advanced as a main explanation for the exceptional longevity of the De Beers cartel (Reekie, 1999b). Reekie’s historical analysis is consistent with the facts listed in the United States v. De Beers et al. lawsuit accusation. In this respect, the case reveals close scrutiny of the observance of cartel discipline by its Belgian Congo members. On other occasions, the disciplining of cartel members appears in the Sibéka archives, including cases of members tempted to stray, as detailed in the case study of the Mwadui mine owned by John Williamson in Tanganyika (today in Tanzania). The Sibéka archives show that the managers of the Belgian Congo mines watched Williamson with the aim of keeping him in the cartel fold, which meant, first and foremost, discouraging him from selling outside the DTC (Diamond Trading Company) agreements [AGR (Archives Générales du Royaume de Belgique), Sibéka 1484, Travel report of Gérard Cravatte, 27–28 August 1956; Knight & Stevenson, 1986, pp. 423–445].

3. Concentration and stability of the diamond production in historical perspective

During previous centuries, diamonds were found in many countries, including India, Russia, Canada, and Brazil. But it became apparent from nineteenth-century explorations that the most important sites for diamond mining were in the southern part of the African continent. South African diamond production was the base of the consolidation of several firms under the direction of Cecil Rhodes and his successor Ernest Oppenheimer. The discovery of new mining sites, as well as economic and financial crises, considerably influenced diamond value on international markets. The formation of the De Beers cartel, and the choice in the 1920s of one London intermediary – the Diamond Syndicate, which was replaced by the DTC in 1934 – to retail the stones aimed to anticipate risks and control diamond prices internationally (Dorsett, 2005, pp. 145–182).

Diamonds were discovered in the Kasaï region of Congo after several exploratory missions in the region. In 1906, Belgian and international entrepreneurs founded a Congolese limited liability firm (société congolaise à responsabilité limitée): Forminière (the Société Internationale Forestière et Minière du Congo). The first Kasaï diamonds were found in 1907 (Polinard, 1951, p. 3). Half of Forminière’s capital belonged to Congo Free State, the private colony of Leopold II, king of the Belgians, and half came from the US entrepreneurs Thomas Fortune Ryan and Daniel Guggenheim (De Bruyn, 2006, p. 8; Le Diamant au Congo belge, 1946, pp. 9–10): in total, Forminière’s capital amounted to 3.5 million Belgian francs in 1906 and was increased to 16 million in 1919 (Le Diamant au Congo, 1946, p. 10).

South of Congo was another diamond-rich region in the colony of Angola. In 1912, the Portuguese colonial authorities founded the Companhia de Pesquisas Mineiras de Angola Pema, and in 1917, the Diamang (Companhia de Diamantes de Angola), based in Lisbon, with a board in Belgium. Forminière took a financial interest in Diamang (Buelens, 2007, pp. 400–401; De Bruyn, 2006, p. 9). From the 1920s, Ernest Oppenheimer, at the helm of De Beers in South Africa, held a controlling share in the capital of Forminière. In Congo, Mibéka was founded in 1919 as a branch of the Compagnie du Chemin de Fer du Bas-Congo au Katanga, with a capital of 10 million Belgian francs. In 1920, Bécéka entered into a contract with Forminière for the exploitation of mining concessions, and in the following decade the extraction of diamonds grew more than eightfold (Bruyland, 2021, p. 117; Harms, 1975, pp. 73–88).

Leopold II handed over the Free State of Congo to Belgium in 1908, and its share in Forminière’s capital then became part of the investments of the Belgian colony. The colony officially banned the use of forced labour. The firms engaged in diamond exploitation in the Kasaï region used social perks to attract Congolese workers, keeping the salaries low but organising housing, health programmes, schooling, and food rations, to stabilise the workforce (Buelens, 2007, p. 401; Le Diamant au Congo, 1946, pp. 21, 25). The personnel lists show that the manual workers on site were nearly all Congolese, and the leadership was composed of Westerners (De Bruyn, 2006, pp. 6, 46–62, 82). According to Richard Derksen, Forminière used a method for labour contracting that he defines as casual, rather than forced (Derksen, 1983, pp. 49–65). In this context, casual meant that workers could leave their post, but, if they did so, they lost the social and material advantages offered by the firm. The influence of the wartime effort on mining production, however, remains under-researched (Dumett, 1985, p. 396).

In addition to the extraction of diamonds, Forminière managed gold and tin mines, and rubber, coffee, cocoa, palm, and wood plantations, and transported harvested products (Buelens, 2007, pp. 200–201, 339). In order to support the growing economy around diamond mining in Kasaï, the company diversified its activities into crops and cattle farming (Le Diamant au Congo, 1946, pp. 9, 16). Kasaï was fairly inaccessible when prospecting started before World War I, and the firm invested gradually in its onsite operations, which required heavy machinery, adding facilities for the washing operations, a hydropower plant constructed in the early 1930s, and a building for the electromagnetic separation of diamonds. To bring equipment to the sites, it was necessary to build infrastructures created primarily to facilitate the extraction of natural resources, with long-term consequences for the organisation of societies (Herbst, 2000, pp. 108–110). In addition to heavy machinery, the operations in Congo needed smaller equipment that the firm shipped regularly from suppliers in Belgium and Great Britain. Importation routes could be adapted if an international crisis struck – the most challenging of which was World War II, when most tools and machinery could no longer be shipped from Europe and had to be partly supplied from the US. This aspect is developed later in this paper, since it was discussed during the antitrust case (AGR, Sibéka 2024, 2025; Le Diamant au Congo, 1946, p. 17).

All diamond mines yielded both larger stones for jewellery and smaller, imperfect stones reserved for industrial uses, but the proportion of each differed between sites. During the 1930s, several mines on the African continent produced an important amount of industrial-quality stones. When the demand for these stones stagnated, De Beers kept a large amount of them in stock in order to avoid depreciating their market value. Over 90% of industrial-quality stones on the market were then coming from the Belgian Congo diamond mines, in which the De Beers cartel owned a controlling interest. During World War II, diamond industry interest shifted from producing jewellery stones to industrial-use stones. The latter, known as crushing boart, also spelled bort, defined as ‘a diamantine substance containing impurities’ (AGR, Sibéka 2028, Jugement, p. 9), was in demand for making, for example, sound-recording needles and a variety of abrasive tools, including those necessary in the arms industry. The complaint filed by the DOJ listed the following uses for industrial diamonds:

Diamond drills, saws, shaping tools, gear grinders, thread grinders, and wire drawing dies are used in making gunsights, bombsights, binoculars, compasses, chronometers, gauges, radio wires, magnetos, dynamos, transformers, electric motors, and pistons and crankshafts bearings for airplane motors. Diamond tools are used to true the abrasive wheels used in making crankshafts, camshafts, valves and connecting rods, and to true the tungsten carbide tools used in the manufacture of shells. (AGR, Sibéka 2028, Summons, p. 6)

From the production sites, diamonds were traded to locations across the globe (Cayen, n.d.), such as Mumbai and Surat in India, Tel Aviv in Israel, Johannesburg in South Africa, Antwerp in Belgium, and especially London in the UK – the most important trade centre, for the cutting and retail of the stones. In her research, Lisa Bernstein has shown that the diamond trade was based primarily on unwritten norms and bonds of trust. The importance of family in the structure of the trade contributed to the effective transmission of knowledge internationally and to strong cartel discipline (Bernstein, 1992, pp. 115–157). The cartel members made agreements with the DTC for organising sale of the stones during ‘sights’ that took place in London at intervals of a few months (AGR, Sibéka 2028, Jugement, pp. 9–10; De Bruyn, 2006, p. 126; Le Diamant au Congo, 1946, p. 17). In 1937, Bécéka founded Diamant Boart to manage its industrial diamonds production, and Bécéka retained ownership of 80% of this specialised branch (De Bruyn, 2006, p. 10). In the mid-twentieth century, the Belgian Congo was the largest producer of industrial diamonds in the world (Buelens, 2007). At the time of the lawsuit, 80% of the total weight in diamonds produced globally was used for industrial purposes, and 98% of the stones produced in Congo were industrial (AGR, Sibéka 2028, Jugement, p. 10).

4. Wartime context and suspicions of trafficking with the enemy

The diamond antitrust case of 1945–1948 was the first in which De Beers was involved. Raymond Dumett, who has examined the importance to the war effort of the African extractive industries, wrote that the DOJ did not have sufficient evidence for the case (1985, p. 385). Eric Laureys gave little attention to the case in his comprehensive history of the Antwerp diamond industry (2005, p. 322), probably because the Sibéka archives were not yet accessible when his work (as well as Dumett’s) was written (Laureys, 2005, pp. 522–523). Historians are divided on the reasons for, and the relevance of, the case. For Dumett and Laureys, the US had little grounds to support its antitrust action. But Janine Roberts, who published a history of the diamond industry focusing on the exploitation of local populations in various regions of the world, wrote that despite this state of affairs, there was a supplementary reason for the DOJ to file the case: there was a suspicion that some members of the De Beers cartel had leaked diamonds to the Axis powers, primarily Germany and Japan, during the war (Roberts, 2007, pp. 116–145). In her history of uranium mining at Shinkolobwe in Congo, Susan Williams also suggests that diamond trafficking in Congo was a factor (Williams, 2016, pp. 98–102).

At the onset of World War II, the cartel had entered agreements that it would serve only the Allied powers, but the US Board of Production considered that De Beers’ monopoly was causing a rise in prices that prevented the US from acquiring a larger stockpile. The lawsuit’s arguments centred on the strategic importance of industrial diamonds in wartime. While antitrust lawsuits may focus, for example, on monopolies on know-how or patents, in the United States v. De Beers et al. case it was not access to knowledge but access to the commodity that was the central claim of the DOJ (Fellman & Shanahan, 2020, p. 197; Glick, 2019, pp. 295–340; Lamoreaux & Sawyer, 2019). Janine Roberts’ interpretation was that the US had an agenda besides the antitrust action, which was to expose diamond trafficking between cartel members and the Axis powers during the war. Her argument was that the leaking of diamonds to the enemy, probably in high quantities, allowed the arms industry of Germany to keep its production going, and delayed the end of the war (2007, pp. 116–117). Roberts’ account rests upon oral histories and the archives of the secret services of the US and Great Britain, but not the Sibéka archives. She points in her book to three main potential sources for leaked diamonds: Congo and Angola, where diamonds were mined, and Antwerp, where they were cut (Roberts, 2007, pp. 126–145). The authoritative study on the Antwerp cutters is Eric Laureys’ book Meesters van het diamant, for which he consulted both US intelligence sources and the archives of the Antwerp entrepreneurs during the occupation. Laureys argues that most Antwerp entrepreneurs were under pressure during the occupation as a result of their Jewish ancestry (Laureys, 2005, p. 314; Roberts, 2007, p. 118), perhaps resulting in the supply of diamonds to the Germans. He also discusses the post-war enquiries regarding collaboration of some diamond entrepreneurs and workers. While trafficking may have occurred, Laureys found no evidence for large-scale supply of industrial diamonds to the enemy, and he demonstrates that Roberts’ sources are insufficient to support her arguments for trafficking (Laureys, 2005, p. 326).

The documents relating to the lawsuit kept in the Sibéka archives do not mention the leaking of diamonds from Forminière or Diamang, but some evidence from the archive is worthy of discussion. While the minutes of the lawsuit and extensive correspondence between members of the cartel, experts, officials, and civil servants fail to provide proof that cartel members sold diamonds to the Axis powers, some of these documents show an ongoing concern around the agreements made with Allied forces for the supply of diamonds (De Vries, 2010, pp. 20, 46). The topic of potential trafficking, on its rare appearances in the archives, is always framed as a danger to avoid, ensuring that no trafficking was allowed from Forminière’s Belgian Congo production sites (AGR, Sibéka 2030, Exposé, pp. 4–5). An explicit mention of supply to the enemy appears in a press clipping from the London journal Financial News, dated 8 February 1945:

After the collapse of Germany and Japan it may be found that the inadequate supply of industrial diamonds in these two countries was a contributory factor to their defeat, and that an Allied victory would have been achieved earlier, had it not been for the large stocks seized by the enemy in Belgium and Holland. … The Belgian Congo, it is pointed out, has a virtual monopoly of crushing bort, of which US war industry needs the huge amount of 10 million carats annually. Belgium agrees to sell this to the syndicate for patriotic reasons and because the Antwerp cutting industry needs other stones from the syndicate besides Congo bort. Without this centralization Belgium could easily obtain several times the present price. (AGR, Sibéka 2030, Diamond Broker)

Stories of diamond trafficking in Central Africa existed already during the interwar period. An example of such narratives can be found in Hergé’s graphic novel Tintin in the Congo, published in 1931, which contains a plotline about the discovery of a diamond trafficking conspiracy between Congo and the Chicago mob (Hergé (Georges Rémi), 2006, p. 52). The book is much criticised today for Hergé’s racist depiction of the colonised Congolese (Williams, 2016, p. 100). In his study of the diamond mining industry in Namibia, historian Steven Press has exposed the prejudices and the exactions against the local colonised population, who were constantly suspected of trafficking (Press, 2021, pp. 162–163).

The broader context of the history of cartels during the war years was characterised by great concerns about the ways in which cartels may have supported the German war economy (Bertilorenzi, 2014 pp. 236–269; Djelic, 2005, pp. 55–76). In the Sibéka archives, as far as the World War II era is concerned, the topic of trafficking appears to be discussed only around the question of the agreements reached between the Congolese colonial firms and the Allied powers in order to supply the latter, including for the US stockpile. Correspondence between Forminière managers and De Beers cartel leaders, and other sources such as press clippings kept in the same archive, show recurring concerns around protecting the Congo minerals from falling into enemy hands (AGR, Sibéka 2030, Note on the agreements, pp. 1–4). The archives document that in the lawsuit’s last phase, the firms of the Belgian Congo were required to deliver the complete numbers in order to justify their entire diamond production, and to justify any irregularities in production and shipping, which the firms did by sharing figures, including those presented in Table 1.

Table 1. Movements of all diamonds in US between June 1942 and December 1944.^a

	Trade carats	Government carats	Total carats
Stocks at 30 June 1942
Boart and powder	7,743,000	865,000	8,608,000
Other	3,566,000	422,000	3,988,000
Total	11,309,000	1,287,000	12,596,000
Shipments from UK and Canada
Boart and powder	21,593,000	4,500,000	26,093,000
Other	6,055,000	–	6,055,000
Total	27,648,000	4,500,000	32,148,000
Stocks at 30 September 1944
Boart and powder	5,036,000	5,365,000	10,401,000
Other	5,498,000	768,000	6,266,000
Total	10,534,000	6,133,000	16,667,000

^a AGR, Sibéka 2027, Note from A.H. Lee to Firmin Van Brée, 13 February 1945.

The firms were also required to give details of the production conditions in Congo. In their answers, the firms highlighted the pressure placed by the management on the Congolese workers in order to reach their goals for the war effort, in which Congo played a decisive role, and the need to keep a relatively even production rhythm in order to ensure enough employment for the local working population (AGR, Sibéka 2030, Note addressed to Alfred Moeller de Laddersous, p. 2). Workers in mining in Congo had often migrated internally to take up the work, which created a greater pressure to guarantee them steady work. With a past history of forced labour, the Belgian colonial authority was under international scrutiny to guarantee acceptable work conditions (Marchal, 2017). The Sibéka archive files show the leadership’s concern for the stability of labour and the objective of keeping diamond production out of the reach of enemy forces (AGR, Sibéka 2030, Exposé, pp. 4–5).

An additional question is the potential leaking of diamonds from Angola, which had a much smaller output of industrial diamonds than Congo. Angola was a colony of Portugal, then one of the few neutral countries in Europe. In the Sibéka archives, a few documents mention the ambiguous position of Angola towards Germany, but the Angolan mining firm Diamang had entered the same agreements as Forminière to supply the Allied forces, and the archives do not show substantially different policies between Congo and Angola regarding diamonds (AGR, Sibéka 2030, Note on the agreements, pp. 1–4).

De Beers exercised a great deal of control over the mining and trading of diamonds during the twentieth century, an issue often questioned in the public sphere. New sources of diamonds were increasingly exploited in other parts of the world, and De Beers sought to integrate new entrants, such as the Belgian firms, that represented a second generation in the cartel and to absorb diamond surpluses that endangered price stability on international markets (Declercq, 2020, pp. 249–266). Over the second half of the twentieth century, these strategies allowed De Beers to retain control over the commercialisation of diamonds, especially via the London-based DTC and a few cutting centres, until too many new entrants and the instability created by the Soviet Union’s fall in 1991 eventually eroded the cartel. De Beers liquidated their stockpile, and new antitrust actions were filed against the cartel in the early twenty-first century. The central argument in this paper is that the erosion of the cartel began at the time of the first court case United States v. De Beers et al., which is examined in greater detail in the next paragraphs (Behrman & Block, 2000; Spar, 1994, pp. 70–87).

5. Arguments supporting the antitrust action

Most of the diamonds used in the US came from firms that were members of the De Beers cartel and were sold via Great Britain (AGR, Sibéka 2028, Jugement, p. 11; De Bruyn, 2006, p. 126; Le Diamant au Congo, 1946, p. 17). During World War II, the monopoly that De Beers had created came under scrutiny in the US. The DOJ thus filed a complaint in the US District Court for the Southern District of New York during the Fall session of 1944 (filed 29 January 1945) against a group of firms forming the De Beers diamond cartel under the Sherman Antitrust Act and the Wilson Tariff Act (AGR, Sibéka 2028, Summons, p. 1; ‘An Act to protect trade and commerce’, 1890).

The defendant firms were De Beers Consolidated Mines Ltd, Diamond Corporation Ltd, DTC, the Société Générale de Belgique, Bécéka, Forminière, Diamang (Companhia de Diamantes de Angola), The Consolidated Africa Selection Trust Ltd, and the Sierra Leone Selection Trust Ltd. Among these companies, the mining firms referred to themselves as the Conference Producers. The group originated from the mines of South Africa, either owned by De Beers or in which De Beers had acquired governing participations. During the 1920s and 1930s, while no further important diamond-mining sites were discovered in South Africa, De Beers invested in the diamond mines of Angola, the Belgian Congo, Ghana, and Sierra Leone. A group of engineers and consultants, especially Sidney H. Ball, who had participated in exploration missions in Congo more than two decades earlier and consulted for Forminière from his office in downtown Manhattan when the case opened, were among the defendants (AGR, Sibéka 2028, ‘Défense’, p. 6). The individual defendants were Herbert H. Vreeland, Albert E. Thiele, Solomon R. Guggenheim, Clendenin J. Ryan, George K. Sturm, Lute J. Parkinson, and Russell Johnson Parker (AGR, Sibéka 2028, Summons, p. 8). Vreeland, Thiele, Guggenheim, Ryan and Sturm were mining tycoons, and

the American stockholders of Forminière. They hold stock therein under a voting trust agreement called the Congo Mines Participation Agreement. The interest and voting rights in Forminière so held by said individual defendants are substantial, and they acting together with Société Générale control Forminière. (AGR, Sibéka 2028, Summons, pp. 8–9)

Parkinson was an agent for De Beers, and Parker a managing director of the Consolidated Selection and the Sierra Leone Selection (AGR, Sibéka 2028, Summons, p. 9). De Beers owned financial interests in most of the mining sites in South Africa, in Diamang in Angola, and in Forminière in Congo. The group of firms cited as defendants were responsible for the mining and selling of around 95% of all the diamonds produced worldwide at the time of the proceedings (AGR, Sibéka 2028, Jugement, p. 11) (Table 2).

Table 2. List of the corporate defendants in the antitrust case US v. De Beers et al.^a

Firm	Foundation date	Location	Additional information
De Beers Consolidated Mines Ltd	1888	36 Stockdale Street, Kimberley, Cape of Good Hope, Union of South Africa
Diamond Corporation Ltd	1930	Principal office: Kimberley, Cape of Good Hope, Union of South Africa	De Beers owns 80% of its outstanding stock, and the remaining 20% is owned by Consolidated Diamond Mines of South West Africa Ltd
Diamond Trading Company Ltd	1934	Principal office and place of business in London, England, and an office and place of business in Kimberley, Cape of Good Hope, Union of South Africa	De Beers and Diamond Corporation each own 50% of its stock
Société Générale de Belgique	1903	Brussels, Belgium	It owns 77% of the 40,000 outstanding shares of the corporation designated below as Bécéka, and owns stock in Forminière and Diamang
Bécéka (Société Minière du Bécéka)	1919	Belgian Congo
Forminière (Société Internationale Forestière et Minière du Congo)	1906	Tshikapa, Belgian Congo
Diamang	1917	Lisbon, Portugal
Consolidated African Selection Trust Ltd	1924	United Kingdom, producer of diamonds in the Gold Coast
Sierra Leone Selection Trust Ltd	1934	United Kingdom	Wholly owned subsidiary of Consolidated Selection

^a AGR, Sibéka 2028, October term, 1944, Summons filed 29 January 1945, ‘In the District Court of the United States for the Southern District of New York, United States of America, plaintiff, v. De Beers, et al.…, defendants. Complaint’, pp. 2–4.

The DOJ accused the defendants of having from the 1920s united in a conspiracy to restrain the US commerce in diamonds, to monopolise their commerce, and to fix and stabilise the price of diamonds. The defendants were accused of having created a monopoly by forcing all diamonds from Africa to be sold to the US via a single intermediary, the DTC, based in London (AGR, Sibéka 2028, Jugement, p. 13). Such a monopoly meant that the US could not buy freely – and potentially more cheaply – from other sources, and had to treat with the DTC. The plaintiff further reproached the defendants for stabilising the price of diamonds on international markets, including by limiting the quantity of stones brought into circulation simultaneously (AGR, Sibéka 2028, Jugement, pp. 12–13). The London intermediary indeed released only part of its stock at a time, in order to maintain the same high prices on international markets (AGR, Sibéka 2028, Jugement, p. 16; Shanahan & Fellman, 2022). A historical example of this policy was that the cartel members had had to buy half of the Diamond Syndicate’s stocks during the Great Depression in order to cushion the effects on prices (AGR, Sibéka 2028, Jugement, pp. 16, 18; Bernstein, 1992, pp. 115–157). Such a monopoly control of the supply by the cartel members and the DTC brought the price of diamonds ‘to arbitrary and exorbitant levels’, argued the DOJ, an argument that is central to the case, and also to the Sibéka files (AGR, Sibéka 2028, Jugement, p. 19). On this point, Raymond Dumett rightly notes that De Beers mined fewer diamonds from South Africa during the war and therefore relied upon its stockpile, and that the most important production efforts occurred in other countries in which the cartel operated, especially the Belgian Congo and Angola (Dumett, 1985, p. 386).

The DOJ’s central argument was that the US wanted to buy diamonds directly from the mining operations in Congo at better prices for military reasons in order to reinforce its stockpile of industrial diamonds (Dumett, 1985, pp. 381–408), and that the cartel was standing in the way:

Diamond Trading Company has systematically prevented the accumulation in this country of a stockpile of industrial diamonds. In sales of industrial diamonds to manufacturers and dealers in the United States Diamond Trading Company has systematically prevented purchases by such companies in amounts that would establish for them more than a few months’ supply on hand. When it was feared that German arms might invade England and overrun Africa, the Board of Economic Warfare sought to purchase large quantities of industrial diamonds from the defendants to prevent capture of their existing stocks and to create a stockpile here. The Board succeeded only in obtaining an agreement to establish a stockpile in Canada in the possession of defendants, by the terms of which agreement this stockpile in Canada could be drawn upon for sale and use in the United States only as stocks in this country fell below 90 per cent of what they were on 30 June 1942. (AGR, Sibéka 2028, Jugement, p. 21)

De Beers’ defence argued that the cartel had worked with the US, and that Canada’s industrial-diamonds stockpile was accessible to the US by way of mutual agreement, should the US stocks dwindle. The proceedings continued with the plaintiff accusing the cartel of having, over the war years, increased diamond prices while diminishing the quality of the product proposed for sale to the US. The US was, as argued by the Board of Trade, the largest purchaser of diamonds in the world, and the conditions offered by the cartel were considered unacceptable in the war economy context. De Beers’ defence refuted this argument on the basis that the price and quantities offered to the US were, in their evaluation, correct.

6. De Beers advertising communication: the construction of a monopoly

The second point emphasised by the DOJ in the antitrust case was the nature of the communication developed by the De Beers cartel. The communication methods used by the cartel were diverse. A streamlined process of regular reporting took place between the Belgian colonial and South African branches that smoothed the exchanges, and similar processes existed with the Angolan branch. Member firms also developed effective business-to-business advertising communication, notably for the sales of industrial diamonds. The Belgian subsidiary Diamant Boart emphasised a high level of technical information and service to its industry clients. Forminière and Bécéka also developed communication around the anniversaries of the firms, with dedicated commemorative publications recording their growth and emphasising their social programmes in the colony. Such public relations efforts were aimed at the management and workers, and aimed to promote the colonial enterprise in the metropole (De Bruyn, 2006, p. 10).

The DOJ brought the market for jewellery diamonds into consideration in the lawsuit, denouncing the monopolistic activities of the cartel in marketing De Beers diamonds in the US. Arguably the monopoly of the cartel was most visible in the marketing of branded gemstones for retail (AGR, Sibéka 2028, Jugement, p. 25). There was thus a divergence between the type of product that the plaintiff sought to acquire and the focus on diamonds sold as luxury products (Donzé et al., 2021, p. 8). On this question, the DOJ outlined the usual method of selling jewellery-quality diamonds, which happened during four main ‘sights’ per year held in London between the DTC and buyers, who were expected to commit to paying a fixed sum in advance for a ‘box’ of diamonds preselected by the DTC (AGR, Sibéka 2028, Jugement, pp. 20–21; Bernstein, 1992, pp. 115–157; De Bruyn, 2006). The lawsuit emphasised the monopolistic presence of De Beers on the US market as a seller of jewellery products, notably by way of highly visible and persuasive mass advertising campaigns (AGR, Sibéka 2028, Summons, pp. 2–4, 9–24), still published to this day, albeit with considerable adaptations in the media and messages (Elle Magazine, 2022, 15 December, French edition, De Beers double-page advertising spread). As the flagship brand for jewellery diamonds, De Beers has with remarkable consistency managed its brand image to sell diamonds as desirable objects to the middle classes in the US and the rest of the world. In 1938, the cartel became a major client of the renowned advertising agency N. W. Ayer & Son, Inc., founded in Philadelphia in 1869. The firm was pioneering in working on consumers’ emotions, as analysed by historian Pamela Laird (Fox, 1984, pp. 21–22; Laird, 2001, pp. 244–245). N. W. Ayer & Son remained in business until 2002, when it was bought by the French group Publicis, one of the big four advertising multinationals (Pouillard, 2005, 44–58). It was N. W. Ayer & Son that came up with the idea of advertising the jewellery diamonds sold by De Beers as the symbol of eternal love. The high-quality campaigns designed by the agency aimed, argued the DOJ, to make private customers believe that diamonds were rare, valuable, and desirable commodities (AGR, Sibéka 2028, Jugement, p. 21).

The plaintiff further detailed the activity of N. W. Ayer & Son for De Beers, which far exceeded the design of advertising campaigns. N. W. Ayer & Son was also in charge of the public relations of the firm, including building goodwill and preventing the US press from publishing negative information on De Beers. In addition, the agency employed shoppers to investigate the retail price of diamonds in the US and to report on the domestic regulations relating to diamond prices, on complaints from purchasers with the DTC, and on the activity and wages of the diamond cutters based in New York and Philadelphia. De Beers paid for all these operations via its US bank accounts (AGR, Sibéka 2028, Jugement, pp. 22–24). Such activities were complemented by similar research by the DTC and De Beers in the US. By bringing the matter of advertising communication to the court, the DOJ aimed to demonstrate that De Beers and its subsidiaries had conspired to fix and maintain the price of diamonds at a high level in the US, thereby restraining trade. Such a conspiracy would raise the penalties meted out in the eventuality of a conviction (AGR, Sibéka 2028, Jugement, p. 24).

7. Blocking and release of the defendants’ bank accounts in the US

The DOJ’s requirements were to prevent the defendants from further combining and conspiring to restrain the diamond trade in the US. In order to do so, it required the freezing of the defendants’ bank accounts within its territory. An important part of the efforts of De Beers’ defence then went into demonstrating that the geology consultants who worked for the cartel were not engaged in business activity for De Beers in the US. The documents that accompanied the defence of the New York-based geology consultant Sidney H. Ball detail how he was hired by Forminière as a private external consultant in geology, and that he was in no way an employee in a fixed post for Forminière in New York. De Beers’ defence argued that the payments Ball received from Forminière were consulting fees and not a fixed salary. This point proved central to the case’s eventual dismissal because, if the defending firms had no proven activity in the US, it was not possible to condemn them on the grounds of the Sherman and Wilson Acts.

Other payments that Forminière sent to Sidney H. Ball in New York were to pay for materials that he bought on behalf of Forminière in the US. Such materials were, before World War II, bought mainly by Forminière’s consultants in Europe, but because of wartime market disruption, such purchases were now partly made in the US, and the merchandise, mostly tools and equipment, was sent from there to Central Africa. Table 3 shows that the purchases of equipment in the US were insignificant before the war, and that they increased markedly in 1941, to reach between a third and a half of the equipment expenditures for the Belgian Congo operations in 1943 and 1944. De Beers’ defence therefore argued that Ball’s activities were entirely caused by the reorganisation of international trade during the war and had nothing to do with cartel activity in the US (AGR, Sibéka 2026, Plaintiff, v. De Beers et al. p. 4; Sibéka 2028, 5013). A similar line of argument was followed in the case of another New York-based geology consultant, who was hired by the Angolese cartel member Diamang to carry out similar activities in the US as Ball had (AGR, Sibéka 2027, Sidney H. Ball correspondence; Sibéka 2028, ‘Supreme Court’).

Table 3. Purchases of equipment and tools made by, or for, Forminière in the US and any other countries.^a

Year	Purchases made in the United States, in US dollars	Purchases made in the United States, in Belgian francs	Purchases made in all countries, in US dollars	Purchases made in all countries, in Belgian francs	Exchange value rate
1931	5,566	199,438	392,644	14,073,330	35.8424
1932	2,475	88,880	261,986	9,408,334	35.9115
1933	1,543	44,832	334,035	9,705,622	29.0557
1934	2,408	51,807	634,895	13,659,704	21.5149
1935	2,276	62,563	976,899	26,853,214	27.4882
1936	1,988	58,803	1,245,310	36,835,044	29.579
1937	10,613	314,357	2,067,487	61,238,993	29.62
1938	7,522	222,579	1,380,846	40,859,948	29.5905
1939	3,507	103,786	1,066,411	31,559,498	29.5941
1940	627	18,810	395,187	11,855,636	30
1941	146,294	6,583,235	272,407	12,258,331	45
1942	191,988	8,639,460	1,283,334	57,750,072	45
1943	451,771	20,329,695	1,277,884	57,504,809	45
1944	537,434	24,184,530	1,300,816	58,536,753	45
1945	351,148	15,345,167	1,258,087	54,978,435	43,70
1946	110,938	4,847,990	1,709,912	74,723,198	43,70

^a AGR, Sibéka 2030, ‘Relevé des achats faits par, ou pour le compte de Forminière aux Etats-Unis d’Amérique et en tous pays’. 1948.

At that point in the lawsuit, the bank accounts that the defendants used to purchase the material that the mining firms on the African continent needed were blocked by order of the courts dated 6 April 1945. The defendants filed a petition with the US Supreme Court requiring that the measure blocking their US bank accounts be revoked (AGR, Sibéka 2025, Letter from Louis Oppenheimer; AGR, Sibéka 2028, Jugement, p. 19; Sibéka 2028, ‘Arrêt’, p. 1565). The defendants objected that this measure was detrimental not only to the business of the cartel but also to the constitution of the stockpiles of strategic importance in Canada and the US. However, contemporary discussions of the lawsuit outside the courts and reported in the Sibéka archives files suggest that the continued blocking of the bank accounts was considered a threat that risked having the effect of driving some of the defendants, especially the mining tycoons, to relocate their activities and taxes away from the US. The ‘flight of capital’ argument became part of the discussions outside the courtroom in 1945. Although the monopolistic activities of the cartel were increasingly perceived in a negative way, as shown in the arguments discussed above against De Beers’ high prices and communication strategies, the ‘flight of capital’ argument points to the broader context of difficulties experienced by the US in enforcing its antitrust law (AGR, Sibéka 2028, ‘Défense’, p. 3).

8. Dismissal of the antitrust case and consequences for the status of cartels in the post-war era

Alfred Moeller de Laddersous, a prominent Belgian colonial administrator and subsequently head of sales of Forminière, addressed Forminière’s board in Brussels on 14 June 1945, saying that the agreements concluded by the cartel members in the Belgian Congo had been

their best protection and the best guarantee of the allies against the flight towards the countries of the Axis. The Congolese production has constantly remained under our control and under the control of the organization that we had agreements with in the allied countries. The last development of the case is an order from the Supreme Court, dated from 25 May, that reforms the judgment in first instance, and gives the order to unblock Forminière assets [in the United States]. (AGR, Sibéka 2030, Exposé, pp. 4–5)

The judgement of May 1945 thus allowed the cartel members to use their US bank accounts again and was considered a fundamental step in ensuring the continued supply of mining sites in Central Africa with equipment and tools. The Supreme Court judged that hampering the activity of the cartel members would be detrimental to the activity of the mines supplying the Allies (De Beers Consol. Mines, Ltd. v. United States, 1945). The case had not yet reached an end. The files show that the case stalled somewhat in 1947 owing to illness among the presiding judges. In May 1948, the antitrust case was finally dismissed on the grounds that there was insufficient support for it (AGR, Sibéka 2028, United States District Court, Southern District of New York, United States of America v. De Beers Consolidated Mines Ltd. et al. Civil No. 29-446, Judgement of Dismissal, 5 May 1948; Newbury, 1989, p. 353). The table below summarises the major steps in the case until its dismissal (Table 4).

Table 4. Major steps in the US v. De Beers et al. antitrust action.^a

Date	Action	Court
29 January 1945 (October 1944 term)	Complaint filed by the United States Department of Justice against the De Beers cartel members	District Court of the United States for the Southern District of New York
28 February 1945	Affidavit of Sidney H. Ball	United States District Court, State of New York, County of New York
6 April 1945	Motion for leave to file petition for writ of certiorari, petition for writ of certiorari and brief in support of the petition	Supreme Court of the United States
25 May 1945	Release of the bank accounts of the cartel members in the United States	Supreme Court of the United States
28 January 1947	The attorneys Cravath, Swaine and Moore, acting in the defence of De Beers et al. ask for the procedure to be quashed and the complaint dismissed	United States District Court, Southern District of New York
4 May 1948	The action is dismissed without costs (the motion is quashed)	United States District Court, Southern District of New York

^a AGR, Sibéka 2028.

The proceedings and the Sibéka files allow the pursuit of the question of the possible reasons why the US brought the case against the cartel. The DOJ’s reason for wishing to halt the cartel’s activity, as listed in the proceedings, was to ensure the US’s present and future stockpile of strategic raw materials (AGR, Sibéka 2026, Letter from A. J. Moeller). During the war, it became clear that the US depended on external sources for access to diamonds, a product that did not have a substitute at the time – artificial diamonds were not yet considered reliable enough for industry purposes, although they were already used in the German arms industry (Danziger, 2022; Dumett, 1985, p. 406).

The arguments raised during the case regarding De Beers’ exclusive advertising for jewellery diamonds were a specific aspect of the lawsuit as monopolies on luxury business were apparently not an important target for antitrust law, perhaps because luxury products were inessential by definition (AGR, Sibéka 2027, annotated copy of Israel B. Oseas; Donzé et al., 2021, pp. 11–12). Both the gem-rich mines of South Africa and the industrial-diamond-rich mines of Congo yielded industrial and gem diamonds, but the destination of the products was different (AGR, Sibéka 2028, Jugement, p. 18). Overlaps were unlikely, other than when smaller jewellery diamonds might be used for industrial purposes in the case of a penury. However, C. B. Slawson, a University of Michigan geologist, dismissed such a possibility on the grounds that the industrial diamond stocks in Canada and the US during the war were evaluated as sufficient (AGR, Sibéka 2028, Letter by C. B. Slawson). Not all the diamonds in the US stock had been crushed for industrial use, according to Slawson, whose expertise was solicited by the Belgian members of the cartel during the course of the antitrust action (AGR, Sibéka 2027, 2028). A question was thus whether some of the best diamonds found in the stockpile could be used for jewellery, and whether the US also had an interest in acquiring higher-quality diamonds in addition to industrial diamonds. The defence insisted that the US had enough stockpile remaining to ensure the continuous functioning of their arms industry, and the presence of an important stockpile in Canada was also used by the defendants to buttress the argument that the Allies had done everything to keep diamonds available to the US (Ingulstad, 2015, pp. 59–79). During the war, the colonial authority of the Belgian Congo, the main source for industrial diamonds, had to ensure that its production did not fall into enemy hands (Williams, 2016, pp. 1–12). The research in the Sibéka archives shows that the first antitrust case of the US against the De Beers cartel was dismissed in 1948 on the grounds that there was insufficient support for the case, and yet it remains useful to consider the influence that the case had in the allied countries’ general changes of attitude towards cartels during the post-war era (Sibéka 2028, United States District Court, Southern District of New York, United States of America v. De Beers Consolidated Mines Ltd. et al. Civil No. 29-446, Judgement of Dismissal, 5 May 1948).

Documents relating to the lawsuit do not confirm diamond trafficking to the enemy as being a reason behind the case, and neither do the Sibéka archives show that the cartel members that supplied the most important quantities of industrial diamonds leaked part of their production to the enemy. These results are consistent with the research of Susan Williams who, in her book on the supply of uranium from Congo to the US, wrote that the spreading of narratives and even rumours of trafficked diamonds served as a cover distracting attention from the sending of uranium from Congo to the Manhattan Project.

Another point, made by Eric Laureys, is that the US was unhappy with the central place occupied by Antwerp in the trade and retail of diamonds. The context of the German occupation of Belgium created momentum for the US to reinforce the position of New York as a new diamond capital, supplanting Antwerp – and its partnership with Palestine − in this role (De Vries, 2010, p. 109; Laureys, 2005, p. 330). In this context, World War II provided an opportunity that New York could seize while Antwerp was struggling under occupation. In the process of enhancing the position of New York as a global diamond capital, obtaining a direct supply of diamonds outside the cartel structure was an obvious goal for the antitrust action. Antwerp, however, regained its place as a cutting centre during the post-war era, working as before with the DTC in London, and resulting in a diminishing of the activity of the cutters in Palestine, a business that had grown during the war (De Vries, 2010, pp. 181–188, 212; Laureys, 2005, pp. 312–316, 330).

Most importantly, the court case was a symptom of a change in international politics about cartels, as comprehensively discussed by Harm G. Schröter (Schröter, 1996, pp. 142–152). Even though the antitrust case was dismissed, it marked a reassessment of the overpowering weight of De Beers, and exposed flaws in its leadership. The dominance of mining tycoons, the US difficulty in buying diamonds despite the agreements made by the Allies, and the inflated diamond prices on consumer markets were discussed in detail during the proceedings (Newbury, 1987a, pp. 1–42; 1987b, pp. 5–2; 1989, pp. 351–353). The De Beers cartel did indeed have an unusual longevity, which Duncan Reekie attributed to a marketing entente between members rather than collusion (Reekie, 1999a, pp. 292–307). While De Beers was not condemned in 1948, the case acted as a warning for cartels to adapt to newer times. In the post-war era, the US reinforced its stockpile, and Europe gradually entered phases of decartelisation (Ingulstad, 2015, pp. 59–79: Schröter, 1996, 142, 146). De Beers and the Congo diamond producers entered a new agreement on prices under President Truman’s Stockpiling Act of 1946, and in 1948–9 the US bought more stockpile from the Belgian Congo producers, showing an erosion of the cartel (De Bruyn, 2006, pp. 132–138; Spar, 1994, p. 54). The cartel then went through several restructuring phases. The leadership of Forminière and Bécéka was central to the discussions that led to new rules redrawing the boundaries of, and control over, the cartel activity. In Belgium, the leadership of the firms involved in cartelised organisations created a forum for discussions about the urgent reform of cartels, also called ‘ententes’, in 1946. The United States against De Beers et al. case triggered concerns among the Belgian industrialists who were members of cartels, many of those involved in the colonial economy. The Belgian group reflecting on cartels began working on new mechanisms of self-regulation in 1946 and considered which concessions they could make if they wanted cartels to survive in the post-war era (AGR, Sibéka 2030, Février 1946, Note; Sibéka 2030, Report 3). Forminière and Sibéka retained a central role in the De Beers cartel, while the production of diamonds from Congo, especially of industrial quality, remained very high and their contribution to the US stockpile became more important during the post-war era (AGR, Sibéka 2030, Février 1946, Note; Ingulstad, 2015, pp. 59–79; Laureys, 2005, p. 324; Hillman, 2010, pp. 170–171; Sibéka 2030, Report 3). In this respect, the antitrust case was announcing more restrictive post-war policies on cartels (Schröter, 1996, pp. 129–153).

9. Conclusion

After World War II, the production of industrial diamonds would bring Bécéka to the pinnacle of diamond-producing firms worldwide (Buelens, 2007, pp. 404–407; De Bruyn, 2006, p. 116). Congo gained its independence on 30 June 1960, and during the last year of colonisation, Bécéka was the third largest firm in the Belgian Congo (Buelens, 2007, p. 339). At the point of independence, Forminière remained a Congolese society, and Bécéka formed a Belgian firm. Subsequently Bécéka founded a branch in Congo called the Société Minière de Bakwanga, 99% owned by the Belgian firm. A decision of the general assembly of the firm shareholders on 21 March 1962 changed the name Société Minière du Bécéka to Société d’Entreprise et d’Investissements du Bécéka, abbreviated to ‘Sibéka’. This new name, Sibéka, was used to designate the firm’s archives (AGR, Sibéka, 2017, Letter from M. Moeller de Kettenis). As underlined by several historians of the diamond industry, the postcolonial period remains under-researched (De Bruyn, 2006, pp. 117–119), although the political reasons for the instability of the Kasaï region, which seceded from the Republic of Congo (future Democratic Republic of Congo) in 1960 and was then reunited to it in 1962, have been discussed by historians (Nzongola-Ntalaja, 2002, pp. 101–107). The government of Mobutu, pursuing nationalisation politics, decided on a takeover of the Société Minière de Bakwanga by the state, without compensation, in 1973. This decision was modified five years later, when the government decided to retrocede 20% of the capital of Bakwanga to the former Sibéka owners as compensation (De Bruyn, 2006, pp. 117–119; Decker, 2018, pp. 691–718). Since the Mobutu regime (1965–1997), DRC rulers have, recurrently, used diamonds as a commodity to assert political power (Monnier et al., 2020), and DRC is considered to be one among a number of countries that suffer from the ‘resources curse’, being plagued by conflicts despite an abundance of resources (Dietrich, 2002; Orru et al., 2007, pp. 173–207; Ranestad, 2015).

This article has examined the history of the United States v. the De Beers et al. antitrust case from 1945 (Fall session of 1944) to its dismissal in 1948. Raymond Dumett underlined the importance to the war effort of the minerals produced in African countries, concluding that ‘the US government tried to bring a lawsuit against De Beers and Forminière under the Sherman Antitrust Act, but failed to build a tenable case’ (Dumett, 1985, p. 386). In light of the archives held by Sibéka, which allow a more in-depth view of the arguments made on both sides of the case, this paper has examined the reasons for the case’s filing. In their complaint, the US stated that they depended on foreign supplies for unsubstitutable minerals necessary for the war industry (Dumett, 1985, p. 406). Geology experts such as C. B. Slawson were asked to provide an opinion on the argument that the cartel prevented the US from building a stockpile commensurate with the war effort. Slawson’s answer was that the US had a stockpile – even though they criticised the quality thereof as inferior – and that, furthermore, the cartel was willing to keep supporting the growth of a stockpile in Canada, which the US could access. The lawsuit proceedings make it obvious that the cartel members were well disposed towards reinforcing the Canadian stockpile. Furthermore, the timing of the lawsuit evokes the strategic importance of acquiring minerals for the US, also in view of its military activity after the end of World War II.

The question of protecting the diamond production sources in the Belgian Congo and, to a lesser extent, Angola, was addressed in the case, as were documents on the quantities and conditions of diamond production. Some historical enquiries (Roberts, 2007, pp. 116–145; Williams, 2016, pp. 98–102) evoked the leaking of diamonds from Congo as the motivation for the DOJ to file the case, but there is nothing, either in the proceedings or in the Sibéka files, that gives evidence of it. The Sibéka archives do not reveal large-scale diamond trafficking between the Central African producers and the Axis powers during World War II. Towards the end of the case, cartels became increasingly unpopular in Europe, partly because of the bad reputation earned by the cartelised German economy under the Nazis. The post-war era was thus marked by a gradual decartelisation of most of the previously cartelised European economies, as studied by Harm G. Schröter (Schröter, 1996, pp. 129–153). The De Beers cartel remained active for the remainder of the twentieth century – remarkable longevity for a cartel, but as shown by Debora Spar, the cartel went through considerable changes in membership and in policies, becoming more flexible towards buyers during the post-war era (Spar, 1994, pp. 70–87). The lawsuit records confirm that central to the case were the specifics of the cartel’s diamond pricing strategies and advertising, which created a lasting Veblen effect. However, the lawsuit was dismissed because the accusations around the activities of the defendants in the US could not be proved. The documents annexed to the legal proceedings in the Sibéka archives show that the personalities of the defendants, especially the mining tycoons, played a role in the case’s dismissal, in that the US government feared the flight overseas of these tycoons and their fortunes (Newbury, 2016, pp. 101–124; Sibéka 2030, Note addressed to Alfred Moeller de Laddersous, 22 February 1945).

A complementary point raised in the US’s arguments was the monopolistic tendencies in the cartel’s communications, as realised by the agency N. W. Ayer & Son, in which De Beers’ communications around diamonds framed the stones as exclusive and luxurious. This aspect aligns with the definition of the cartel as a marketing entente, and possibly also with the US ambitions, described by Eric Laureys, for New York as an emerging world capital of the diamond trade while New York’s competitor Antwerp was mired in the problems caused by the German occupation of Belgium.

The examination of the antitrust case filed by the DOJ against De Beers confirms that the reason for filing the case was the need to supply the US stockpile, which continued in the post-war era, in order to support the US armament industries in newer conflicts in the Pacific region and elsewhere (Ingulstad, 2015, pp. 59–79). The cartel signed further agreements in 1946 and contributed to selling the US stockpile during the ensuing years. The Belgian managers of Forminière and Bécéka, along with other entrepreneurs, launched a series of urgent meetings aimed at adapting the activity of the Belgian cartelised firms – not only in diamonds but in numerous other domains, including cartelised domains of the colonial economy such as copper and cotton – to a post-war era, during which most governments became less tolerant of cartels (Schröter, 1996, pp. 146–147; Sibéka 2030, Report, ‘Comité belge pour l’étude des ententes internationales’: première réunion, 22 janvier 1946). The Belgian cartel committee in the 1946 meetings, euphemistically called ‘international ententes’, clearly perceived the end of an era. In this respect, the case was a powerful signal that the diamond cartel would have to become more flexible over the next decades, which it did by focusing on commercialisation, accepting new entrants, and selling stockpile to the US (Reekie, 1999a, pp. 292–307; Spar, 1994, pp. 60–87).

Acknowledgements

I thank the anonymous reviewers, the editor, Kristin Ranestad, and Espen Storli, for reading previous versions of this paper. Earlier versions of this research were presented at the Norwegian Economic History Association Seminar on 20 January 2022, Oslo Metropolitan University, and at the Geosciences, Knowledge and Capitalism workshop at the University of Oslo, 7 December 2023, and I thank the participants for their comments. I also thank Odile De Bruyn for answering my questions about the Sibéka archives.

Disclosure statement

No potential conflict of interest was reported by the author.

Additional information

Funding

Parts of this research have received support from ERC CoG grant 818523, Project CREATIVE IPR.

Notes on contributors

Véronique Pouillard

Véronique Pouillard is a Professor of International History at the University of Oslo.