Solomon Barnato Joel, Just Solly to the powerful and powerless alike, may have been the richest man in the world. It was hard to tell, difficult to get an accurate reading on matters as personal as that in those days. Following the mysterious death by drowning of his uncle Barney Barnato, the founder of the DeBeers diamond cartel, young Solly Joel assumed total control of that vast enterprise. From his base in diamond mining, Joel branched out to gold mines and soon manipulated and dominated the world market in both stones and precious metals. A flamboyant character, who thrived on bravado and basked in the glory of public attention, Solly Joel was among the first of the great industrialists and entrepreneurs to invade popular culture. With no thought of profit, he bought up the famed Drury Lane Theater in London and established a stable of the finest racehorses in the world.
His most daring adventure, the one deal everyone speculated about, was his strange and unique relationship with the Russians. When the Bolsheviks deposed the Czar in 1917, they found themselves embarrassed to become the world’s richest diamond owners. Centuries of accumulation, an act of unprecedented rape of Russian national treasure, had now devolved to and given the Communists the world’s largest, most valuable collection of diamonds. Desperate for money, hard currency with real trade value, and ideologically burdened with the Czar’s excesses, the Bolsheviks were easy prey to Solly Joel’s machinations. In a daring stroke of international hubris, Solly Joel offered to take the Czar’s diamonds off their hands and give the Bolsheviks the enormous sum of 250,000 English pounds, the most prized currency in the world. Moreover, Joel made the offer sight unseen. He would take the entire collection, as is. The Russians, in a sign that they understood nothing about money and really did mean it when they said they would usher in a new financial age for the world, accepted. They delivered the goods-in fourteen cigar boxes-and Solly Joel dutifully transferred the quarter million pounds. Improbable as it was-a schoolboy’s logic dictated otherwise-both sides concluded the transaction with apparent satisfaction. One of them had been had, and it wasn’t Just Solly. By securing the Czar’s entire collection for himself, Joel was able to stymie any possibility of the future sale of phony pieces, paraded as secret jewels from the vault of the late Czar. Had this happened, the diamond market might have spun out of control. As well, he completely eliminated the potential for any damage that might affect worldwide diamond prices had others purchased the collection. In this way, Joel ensured that all the Czar’s diamonds would not come on the market at once. Over the coming years, until his own death in 1931, Solly Joel was able to reintroduce, as he called it, piece by piece, some of the most spectacular diamond jewelry ever made. His financial wizardry was such, he did so while increasing prices, not depressing them. Of course, the Bolsheviks had no idea what those stones were really worth. They were the proverbial Christians being tossed to the lions. They were soft food for the predator. Solly Joel bought them sight unseen because he knew their actual value was perhaps twenty or fifty times what he paid. To this day some who know the diamond trade well say that figure was closer to a hundred times what Joel paid. Just Solly rightly figured the Russians for patsies. Why not the Georgians too? The purpose behind Solly Joel’s approach to Djemmal-Eddin Messadou was to find out about the Czar Nicholas II ten Ruble coins. He’d heard that the nephew of the Lion of Dagestan had tons of them.
The Present
In the last year of his reign, Nicholas II, the Russian Czar, issued a new ten Ruble coin. Of course, it had his likeness on it-a side view, the left, the one he always considered his best side. And it was made of gold, each coin containing. 2489 ounces. The international price of gold, in 1917, was fixed at $20.67 an ounce. The Czar’s new ten Ruble coin carried a value, in 1917, that Chita had already figured at $3.10 American. At today’s prices, each coin was worth about $75. She whistled at the thought of four million of them.
She already had learned that most of these coins were minted in Switzerland. Others in France. None in Russia. When the Bolsheviks overthrew the Czar, they canceled the contracts and asked for their gold back. They had no use for coins showing the Czar’s face. Neither the Swiss nor the French were eager to comply. There were costs involved, they said. They were vague about specifics. A halt in production meant expenses would be incurred. They told their Bolshevik clients, things had to be done properly. Procedures had to be followed. The Russians-these new ones now in charge-thought simply by saying stop, they could end the matter and have their gold promptly returned to them. The Englishman, Solly Joel, had shown these Communists knew next to nothing about diamonds. Louis Devereaux delighted in telling her that story. “Well,” he confided in her, “it turned out they knew even less about gold.” So offended were they by the sheer sight of the Czar’s face, they ordered the Swiss, and the French also, to melt down all existing coins. Add it to the gold still on hand, they instructed, and ship it all back to Moscow. They had no immediate plans for the use of the raw gold. They had other more pressing matters to deal with. Although they demanded its return, the Bolsheviks failed to threaten those who delayed or refused. How could they have known? They were innocents traveling down an unfamiliar road. None of them had dealt with international bankers before. They had no idea that no one gets their gold back without the threat of bloody, painful death. How could they have been so stupid? Chita thought of herself as much like the Communists who took over the Czar’s empire. Was she not forceful, resolute and self-confident? Unmistakably, however, and very much unlike her, the Reds were also totally ignorant about money and the people who controlled it. No banker wants his throat cut. Short of that, they’ll do anything to keep what’s theirs, and what’s yours too. She knew it and feared the loss of her own fortune, the risk to her lifestyle, and had nothing but contempt for the Russians. They had no idea at all what they were up against.
Like water when the temperature dips below 32 degrees, events freeze over just as quickly in the world of finance as they do in the often more chilly realm of politics and government. The Russians could run roughshod over their own. No one else really cared. Revolution here. Revolution there. The Communists had a firm grip on the Russian Bear. But they were impotent to influence the wild horses, the sleek stallions of international finance. By the time the Communists decided to do something, to take strong action, European bankers-Solly Joel was their hero!-had robbed them blind. The Bolsheviks, screwed out of much of their own gold reserves, were reduced to forbidding the use of Czar Nicholas II ten Ruble coins as legal tender at home. A lot of good that did. Gold is gold. Everyone knows it, especially in time of war. The coins were widely circulated and found their way into every crevasse of the Russian Empire, now property of Communists who, in their intellectual isolation, believed the means of production were now theirs.
Devereaux’s tales of Frederick Lacey, Lacey’s esteemed father-in-law and the notorious gold coins rescued from the clutches of the tyrant, enthralled her. Were the stories of the gold true? Had the Georgians trusted Lacey with that much? She didn’t know. She wasn’t sure. She couldn’t say. She wouldn’t rule it out. She wanted it, she told Louis. She wondered, was Frederick Lacey the only one who knew-the only one who knew where the gold was? Did he write that secret down in his private journal, the one Louis told her about? Was that too much to hope for? It hardly mattered, she thought. Louis kept telling her that Lacey’s confession was the key to everything. JFK was more than enough. The Czar’s gold would be a bonus, he called it, a present from him to her.