Summary
The Palestine Diamond Manufacturers’ Association (PDMA), the association of Palestine’s diamond manufacturers created in Netanya from May 1940 under Oved Ben-Ami as president and Chaim Friedman as administrative secretary, authorized by the government in late July 1940 under the Ottoman Law of Societies, and organized as a private monopoly under close government inspection and control (Diamonds and War — State, Capital, and Labor in British-Ruled Palestine, PDF p.66-68).
Details
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Its regulations were shaped in the government-nominated Control Committee of Rough and Polished Diamonds in Palestine, and the first shipment of small rough stones arrived from Hennig & Co. in August 1940 (Diamonds and War — State, Capital, and Labor in British-Ruled Palestine, PDF p.66).
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It was a monopoly in six senses: sole importer of rough diamonds to Palestine; membership open to Jewish applicants only; membership compulsory for anyone cutting or polishing in Palestine, with home work barred; De Beers and the Diamond Syndicate the single authorized source, with Hennig & Co. as sole sightholder and 1 percent of all import orders going to the President’s Fund; all polished stones oriented to export through PDMA quotas, with free local marketing barred; and factory ownership uniting importing, producing and exporting (Diamonds and War — State, Capital, and Labor in British-Ruled Palestine, PDF p.68-70).
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Recruitment of member-manufacturers was government-authorized; by mid-1942 it consisted of thirty-three factories, and in September 1941 screening of new candidates stopped completely until winter 1942 (Diamonds and War — State, Capital, and Labor in British-Ruled Palestine, PDF p.72, p.81).
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In autumn 1940 it introduced a collective agreement in the factories, meant both to appease the Histadrut and to allow other unions to sign so the Histadrut would not be the sole representative of the diamond workers (Diamonds and War — State, Capital, and Labor in British-Ruled Palestine, PDF p.98-99).
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De Vries argues it became during the war the most powerful and regimented employers’ association in Palestine, and that its organizational power was built, in Ben-Ami’s perception, also against labor (Diamonds and War — State, Capital, and Labor in British-Ruled Palestine, PDF p.68, p.81-82).
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It was not a member of the Palestine Manufacturers’ Association until 1943, and kept the Jewish Agency’s involvement — including arbitration in labor disputes — to a minimum, linking to the national institutions mainly through bank credit (Diamonds and War — State, Capital, and Labor in British-Ruled Palestine, PDF p.107, p.110).
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It made union splintering certain by recruiting apprentices from various workers’ organizations and requiring each union to sign any labor contract, while barring manufacturers from negotiating individually with workers and unions (Diamonds and War — State, Capital, and Labor in British-Ruled Palestine, PDF p.114-115).
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Under the November 1942 standstill order the number of manufacturers was set at a maximum of thirty-three until the end of the war, and from August 1943 control was enforced through the type of stones allocated and the new Diamond Control Board (Diamonds and War — State, Capital, and Labor in British-Ruled Palestine, PDF p.143-145).
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In winter 1944, amid the breakdown of trust with the MEW over suspected misreporting and outside-syndicate buying, Ben-Ami renewed the PDMA’s application to send representatives to London, and its confidential document warned the British that limiting the industry was tantamount to bringing its demise (Diamonds and War — State, Capital, and Labor in British-Ruled Palestine, PDF p.149-152).
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The DCB inquiry subcommittee of March-May 1944 cleared Ben-Ami of the opposition’s financial-mismanagement allegations while recommending his “benevolent despotism” be replaced by a more democratic structure, paving the way to split the PDMA into two manufacturers’ organizations (Diamonds and War — State, Capital, and Labor in British-Ruled Palestine, PDF p.158-159).
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The June 1943 collective agreement the PDMA signed abolished workplace and tool-usage fees and training fees, assured pay during declining supplies and lifted the controls over workers’ movements; in autumn 1943 the manufacturers turned back on it, refusing the promised 46 percent cost-of-living allowance (Diamonds and War — State, Capital, and Labor in British-Ruled Palestine, PDF p.178-180).
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The January 1945 London agreement let it expand its membership with supplies assured to new members, while the returning pressure of Belgium’s recuperation and the sudden 1945 supply reduction weakened it; in June 1945 it proposed transforming state control into attenuated regulation — “a gradual transfer to deregulation” — against its opposition’s firmer liberal campaign to abolish compulsory membership (Diamonds and War — State, Capital, and Labor in British-Ruled Palestine, PDF p.205, p.209-212).
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The Diamond Inquiry Committee (1945) report (December 1945, public June 1946) recommended it be transformed from a compulsory association to a voluntary one; in spring 1946 Ben-Ami’s “old guard” tried to run it so as to monopolize all rough imports and preserve power, a campaign that peaked that spring and virtually caused Ben-Ami to back away from too-personalized dealing with the syndicate (Diamonds and War — State, Capital, and Labor in British-Ruled Palestine, PDF p.215-218).
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In the 1946-1947 crisis its quarrels over rough allocation intensified, its relations with the government deteriorated, and the rise of home industry and the black market shattered its regimentation — members obtaining rough on the black market and diverting exports to local and regional Middle Eastern marketing (Diamonds and War — State, Capital, and Labor in British-Ruled Palestine, PDF p.230-233).
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In November 1946 it locked out the factories to press the unions to accept the Jewish Agency committee’s crisis proposals; in the 1947 crisis it could not commit on its members’ debts to the syndicate, pay or a collective agreement, and its members’ expanding non-syndicate purchases strained its syndicate relations (Table 7.2); in the latter part of 1949 its monopoly over the reception of rough supplies from London ended on the syndicate’s recommendation, a new Diamond Cutting Works Federation was in process, and the industry’s institutional power completed its transfer from Netanya to Tel Aviv (Diamonds and War — State, Capital, and Labor in British-Ruled Palestine, PDF p.237, p.244-246, p.260).