There’s a picture of young Tom Chatham where he can be seen playing on the floor with a bottle of emeralds. Despite being identical to the ones that were mined from the earth- to him they were an everyday household item. Fast forward, Tom’s career was truly unique- after all, not many people can say that they grow gemstones for a living.
Alan: Welcome back I'm visiting here today with Tom Chatham, Tom welcome to today's show.
Tom: You're welcome, glad to be here.
Alan: So, Tom you're an icon in the gem industry a lot of people love wear your products they may not know where it came from those so can you give the listeners background of how you got where you are today and the business model that you run?
Tom: Well the real icon was my father Carroll Chatham who was the first man to be successful in growing emerald on a commercial basis. We weren't the first- a lot of people give us that credit but there were people in the mid-1800s' growing emerald but it was just laboratory curiosities. Carroll Chatham was a genius in his own right. He had grown emerald in his own laboratory in San Francisco before he went to college and then after Cal Tech in Pasadena started a business, the second world war took a little time out of that, but created laboratories in San Francisco where he grew emerald. I joined him in 1965 when I was about 21 and he was very good at chemistry and my majors in college were chemistry and math but it was really a waste of time- he was so good. The handbook of chemistry was about six inches thick and he memorized it- I mean I could already find things in it much less memorize it. I got to work with him many years before his death in 1983. He died when he was 68 years old unfortunately- from the kind of work he did. We are very careful with the chemicals we deal with but Carroll Chatham came from the old school chemistry in the 20's and 30's you tasted things you smelled things. If you could stand the smell you put up with it well some of these things we now know are very dangerous. But I came to him in '65 and we began work on ruby. He had already accomplished emerald and was written up in many periodicals and newspapers and front pages and even in Ripley's Believe It or Not, this young kid growing emeralds in San Francisco. And we developed processes for all of the important gemstones. First it was emerald, then ruby, then blue sapphire. Blue sapphire was extremely difficult, we couldn't figure out how to grow it- and a little backup, sapphire and ruby are all the same corundum and little coloring agents dopants we call them make the color in the stone. So, ruby has chromium, blue sapphire has iron and titanium and it causes certain things in the crystal to go bad. I mean the crystals would come out black- or they would come out colorless so we spent years and years on that, after that because we felt so inept at growing blue sapphire we said let's go sideways and look at other members of the corundum family to see if either we're stupid or there's something here that we don't understand. And sure, enough there were other things involved with growing blue sapphire that were not involved in growing an orange sapphire or pink sapphire or a white sapphire. So it led us knew that there was something going on here and we did finally figure it out and we went on from there to grow alexandrite, opals... some of that involved taking over other companies that were competitors at the time, the holy grail of crystal growth has been diamond and as Carroll Chatham was actually trying to do in his youth- was grow diamond but it requires such a dangerous environment high pressure high temperature that after almost blowing up his father's house in San Francisco- came very close to it- his father was in the lumber business, knew nothing about this, youngest of five kids- what he was doing in the cellar garage.
Alan: How old was he, just curious?
Tom: I have pictures of his laboratory he built when he was 12.
Alan: Oh my goodness.
And he grew up in an era that the corner drugstore was called a chemist and if you know what to ask for, they'd sell it to you. So, growing up with my father and we had a laboratory in our garage, he build taught us how to make gunpowder, how to make rockets, how to make bombs... luckily nobody lost a finger but he also taught us how to be careful with chemistry and this is dangerous and just don't try and mix a big bowl of gunpowder together because just rubbing it together can set it off, you know some little things like that. But it was great growing up and learning that, as a matter of fact fourth of July where we had a lot of different firework displays around the Bay Area. What kind of got to my brother and I was my father's explanation of why all the colors were what they were. I mean oh yeah that's iron and that's potassium and that's you know you mix those two together and you get those colors. At 12 years old we could care less, you know just big booms. So I came into the laboratories in '65 and-
Alan: At the age of 21 you'd grown up around the environment of your dad the chemist so clearly had you gone to school at the time or what was your feeling? It's like you're more tutored than you were schooled than this?
Tom: I didn't really appreciate what my father had accomplished because I was around it so much. I mean there are pictures on our website of my father and mother and my brother and I sitting on the living-room floor playing with a bottle of emeralds and I'm like three years old and so it was always something like that, it was always somebody wanting to interview my father and he always believed and sharing everything with the family so we were all together and we would watch these interviews and live TV programs what have you, so I just thought it was sort of normal. The only thing that wasn't normal was if someone asked me in middle school what does your father do for a living I couldn't say he grows emeralds it didn't work.
Alan: Now they did a TV program way back when and on your dad, You Asked For It?
Tom: You Asked For It with Jack Smith.
Alan: What year was this?
Tom: It was black and white, I'm going to say 1957-58-
Alan: Made it a little bit easier to say go watch TV and see what my dad does.
Tom: They came into the laboratories and he tried to explain verbally what he was doing, he wouldn't show them what he was doing, our laboratories are off-limits to anybody to walk through, but it was it was an interesting film shoot because they wanted to know how can you separate if it's identical if it's the same as a natural emerald how can anybody separate it. And the basic gemological differences in the gemstone can be studied to such an extent that you can identify what mine a particular emerald came from, what country it came from- Colombia produces certain inclusions of a certain type. The Muzo mine in Colombia has its own distinct inclusions and the same holds true for Africa and India and what have you, so if you study enough emeralds you can become an expert at separation. And we share all of our products with the all the major Gemological Institutes around the world, they study them, they learn what to look for in the stone, and then they make their determination. But my father had a different way of separating the stones he wasn't a gemologist he was way above being a gemologist he was a chemist. But the difference between geology and chemistry is that- chemistry you often get into destructive identifications, you have to take the thing apart to know what it's made of. Well in gemology that's a big no-no, you don't want somebody destroying you know the corner of your $5,000 emerald. But Carroll Chatham had a foolproof method that he showed on this TV program, You Asked For It. And they did a setup that the host wasn't quite sure what was going to happen but my father said, well you get me a natural emerald of about a carat size and I'll use one of my emeralds and I'll demonstrate on live TV how you separate the natural from the Chatham. And so, Jack Smith the host said okay you're on your own, you're the chemist. And so, my father took these stones, wrapped a little piece of wire around each one, put it in the torch and as they turned red and the host is getting on camera off camera looking at this emerald heating up not knowing what's going to happen and all of the sudden the natural emerald blows up- shatters. And it was priceless to see Jack Smith's face. To see the emerald that he paid for it explode. And my father very calmly said, "this is the way you can absolutely separate the two-different product. Heat one up, the water content in the natural emerald will make it explode and the Chatham will be fine because we don't use any water in our process."
Alan: Tom, I need to take a quick break, I'm visiting here today with Tom Chatham, he's the CEO of Chatham Lab Created Gems and Diamonds and we'll be right back after these messages.
Alan: Welcome back I'm visiting here today with Tom Chatham he's the CEO of Chatham Lab Created Gems and Diamonds and your dad started this over 80 years ago and then you joined in 1965 and boy how the industry has changed but I want to roll into lab-created gems versus natural naturally mined ones. Why would someone want to purchase one versus the other and is the price point roughly the same because this is not something where you put five thousand a day out, this is a real process to make a gemstone.
Tom: Right as I explained earlier some of these crystals take up to a year to grow so it's not a mass production type of process and time is money but for a given quality of natural emerald versus Chatham there's going to be a substantial difference in price. Where we meet is where the quality of the natural becomes so poor that it is perhaps not safe to wear, it has too many inclusions. Emerald is fragile, it can break easily when somebody hits a ring have you. So, our stone tends to be tougher and for the same price we can give a better quality of stone and calibrated and properly cut so that's what we're trying to make our advantages in those areas that are hard to find in the natural gemstone. So, you could come to us and say I want a seven by five-millimeter pear shape and we would have it and you wouldn't find that in the natural gemstone so we have made it easier to make jewelry with our stones and we have to constantly stress the fact that it is identical to the natural gemstone.
Alan: Let's differentiate, so it's just for the listeners out there you know maybe when we talk about lab created we think about cubic zirconium and we're way off that where it's a year to make these, differentiating natural versus a lab created is not always easy is it.
Tom: No not easy at all. I mean the experts have come to us after we've developed a product and get samples, buy samples and we usually donate samples for them to study and look for characteristics that will reflect the environment that stone grew in- whether it grew in the ground or grew in our laboratory. There is usually something in there consistently that can become a standard of that particular identification and so that holds true with all of our products they know that it's a Chatham if they find this particular included crystal inside the stone. Doesn't have to be there but if it is there, you can identify where it came from. No, it's Chatham or Columbian or African, but the host material, the emerald, is identical but it has to be properly disclosed. It's a controversial area right now and has been for many years. Whenever we come out with a new gemstone some people in the world run around like chicken with his head cut off right in the world is going to come to an end in the emerald business and it didn't. The world is going to come to an end in the ruby business, and it didn't.
Alan: So, for the discretionary minded consumer, so if the natural versus the lab-created processes are roughly this same, why would there be a price difference? It's a silly question but at the same time when the market is varying the price, if I understand this correctly, what you're able to do is you're able to give a deliverable for mass production of five thousand units or something where for mine diamond is not going to be the same.
Tom: It's difficult, we sometimes supply natural gemstones to people on a special-order basis and I had somebody who requested twelve pieces of blue sapphire in carat size rounds so they would all be matched and they all had to be approximately the same size so I went to my friends in the natural stone industry and I said this is what I'm after they said oh you're crazy you can't do that you're going to be all over the world trying to collect this. And I said why is it so hard to have 12 stones the same? There's no shortage of blue sapphire production, I mean it's a rare stone but it there's still millions of stones. And they said that's just the way it is. And I said you know that's the difference between us because I'll cut 12 blue sapphires that are identical close to identical if I get an order and that's a difference between your industry and my industry because I'll try and satisfy the needs, the demands of the industry versus satisfying the pocketbooks of the miners.
Alan: It's interesting, so sometimes in this industry people will go into the large shopping malls and see a jewelry store here and there and not really give a thought about how these stores across the United States are supplied. And the reality is you're giving a very good quality gem, but because you’re able to produce in the mass quantities these stores can exist. Am I saying that right?
Tom: Well not quite right, it's not that we can- I mean that's certainly true- it's that we will. We have that drive to be more competitive, what can we do that the natural doesn't want to do, they can do it but they will lose a lot of yield. And I've given talks to the natural stone people said this is why we're successful and you're not. And well we can't do that- it always easier for you because you make the stone. And I say wait a minute, are you saying I'm cheaper than you? Of course. I said wait a minute, where do your natural stones come from? You pick them up off the ground for nothing. Oh no we've got all sorts of costs. Well I realize you do but you are picking them up off the ground for free, I am not, I'll show you some chemical bills that will give you a heart attack.
Alan: Tom, I need to take a quick break, I'm visit here today with Tom Chatham of Chatham Created Gems and Diamonds and we'll be right back after these messages
Alan: Welcome back I'm visiting here day with Tom Chatham of Chatham Created Gems and Diamonds and Tom, it's a fascinating story of how your father started these processes some 80 years ago and developed and perfected the creation of gems and diamonds in following a natural process and this is not done overnight, you know I understand it must have been tough for the purist to say, well natural versus created stone, but what challenges have you faced over the years with the purest versus what you're doing there.
Tom: Yes, there are a lot of purists in the gem industry, they love what they do, they have a passion for the natural gemstone, they think it's a miracle of nature which it is from their point of view but from our point of view it's just chemistry. It's a difficult form of chemistry, but it's a part of chemistry that we really enjoy today more than anyone can imagine. The cellphones the computerization is all based on growing a crystal, that's what's in the center of that thing. But when it comes to adornment and gemstones and jewelry, people get a little carried away and they got carried away and probably it was based on what happened when Mikimoto came out with the cultured pearl in 1910. And it competed with the natural pearl that used to be extremely valuable. I mean the Cartier building was traded for a strand of cultured pearls back in I don't know- in the 50's. So that fear was there, and when Carroll Chatham introduced his stone, his emerald, that same fear was there with the big retailers on Fifth Avenue in New York. And somebody had placed friends in high places- Washington D.C., Federal Trade Commission... and Carroll Chatham called his stone Chatham Cultured Emerald he felt that that was the most accurate descriptive phrase to use. He would not use the word synthetic because it was so misused even back in the 40s and 50s to mean anything that was ersatz or you know fake so he refused to use the word synthetic and these people in high places got the FTC to issue us a cease and desist order and the way that works is you sign off on the cease and desist- there weren't any fines or punishment involved and you must call your stone synthetic and my father refused. So, when you refuse you get your day in court a day in court took three years in Washington D.C.
Alan: Ooo... that wasn't cheap
Tom: Not cheap. It was 1959 through '62 and the opposition I think knew that Carroll Chatham would not divulge how he made the stone. How could you make the stone? And the judge even said it. I'm a chemist, I understand chemistry. For the good of society, we want you to explain your process. Well that was a lot of baloney. Good as society I mean who needs an emerald. My father refused and the judge said to my father, if you refuse to tell us how you're growing these stones its contempt of court. One year in jail and $5,000 a day. My father says you might as well put me in jail now because I will not divulge my secret process- my whole life's work for your satisfaction. And the judge stopped for a few minutes, okay everybody in chambers. He knew we made a mistake there was no way you can legally get away with this either forcing my father in contempt of court.
Alan: Your dad knew that.
Tom: We had good legal advice, so in chambers the judge said, listen you know we got to get over this somehow. We're at this point where you refused to divulge, I understand that, let's find some other word that will satisfy everybody. And my father said well we've had a lot of people working on it we can't figure out other words that would be a good descriptive phrase meaningful and honest and the judge suggested created because you're creating emerald. And my father says yeah. Why don't you call it Chatham Created emerald? Great we hadn't even thought of that, and signed off on it,
Alan: Three years to get that word.
Tom: No, it didn't take three years to get that, we got to that point in six months. Signed off on it, changed all the advertising, changed the corporate name changed everyone's business card, all the advertising we were doing, changed to Chatham created emerald. Got another cease and desist order: prove that you're creating emerald or cease and desist. This was a different fight. Proving that we created emerald easy proving that we cultured an emerald was difficult. And it still took two and a half years to get that through with experts coming in from the GIA- what does Chatham make, what is he creating... well though they would sometimes mumble, emerald, speak up, speak up. What is he making?
Alan: Are you patented?
Tom: No patents, my father had good advice, he went to a patent attorney when he first grew emerald and he says, why shouldn't I patent his process? And he said, well what are you making, let me see it. And they were smart enough to see that if you can't tell how you make it by looking at the finished product, what do you want to patent it for, patents are readable. The people you know in opposition who are even more upset with created. They said he's now put himself on a level with God creating an emerald. Luckily, we didn't have to you know consider that aspect and in the court, we're talking about laws and I don't know if you call it prosecution, but the government called in all of the top gem experts in New York, the head of GIA, Sotheby's and other places, so what is Chatham making? And they kept having to answer, well he's making an emerald. And the judge even at one point says these are all government witnesses, they sound more like Chatham witnesses. And finally he came to the conclusion he says, Chatham is creating emerald and I'm going to allow that word. It isn't disallowing the word synthetic which we also tried to prove with so misleading that it wouldn't be fair to the public- because the FTC works for both ways I mean they want to protect the public's right in buying any product, but they want the public to understand that this is not a fake and phony stone and that's what synthetic conveys to them.
Alan: And just for clarifying for the listeners as we're through this, using a cubic zirconium as a replacement for Diamond- this is apples and oranges when we're talking about it Chatham created gem and diamond, this is not anywhere close to the comparison of a cubic zirconium to a diamond.
Tom: Not at all, the only thing Chatham will produce is identical to the naturally occurring gemstone. Cubic zirconium is an imitation of a diamond, so is Moissanite, it's a different compound. Our emerald, ruby, diamonds, sapphires what-have-you are identical in chemical structure, crystalline structure, hardness, everything that a material is measured by is identical in our product.
Alan: Thank you so you finally were able to get through all the second round of lawsuits? How did it end?
Tom: It finally ended in its 1962 with the judge issuing a decision in our favor and it became a precedent in the industry, it's used now worldwide and my opposition actually- opposition meaning the natural gemstone people- said well why don't you protect that and make it just for you and go after the other people using it- because we had competitors in the 50's and 60's. Union Carbide had an emerald process and a few other people did. We said no, we don't think they should be called synthetic either. If they are making a product that's like ours they should have the same rights that we do and so we're not going to try and hold onto this president. We want it to stand as it should, as it does today.
Alan: So, when we're looking at the gems that you did grow and diamonds, what is the hardest gemstone to grow?
Tom: That's a difficult question, all of them require different environments. Crystal growth is very similar in all different materials but they all require different environments under which they will crystallize. So, emerald is a combination of four different elements that makes it more complicated so we have to slow things way down and that's why it takes 11 months to grow a crystal. Diamond on the other hand is only carbon and that being one element on the periodic chart, if you get the right conditions you can quickly grow diamond and we grow diamond in about two weeks time up to 10-15 carats size of rock. It's the environment though that is extreme. We're talking 1,300 degrees centigrade under 700,000 pounds per square inch and to accomplish that the steel is 3 stories high to maintain this hydraulic pressure that is trying to melt itself because of the temperature push itself apart- computers are controlling everything and it's a very complicated environment to recreate and if we don't, we get graphite- we don't get Diamond so far the listeners at every show that we videotape and put it back to our website at groco.com said he'd be willing to share a picture here of one of these machines three stories high that's 700,000 pounds per square, wow.
Alan: That's a lot of pushing and there's not a lot of people that are doing what you do.
Tom: No, there's more than in any other gemstone because it's not a new process, General Electric made Diamond in 1954 and my travels and experiments in Russia showed me that they were making diamond even before we were. They had no idea how much diamond they actually had in Russia so for the war effort and whatever diamond is a very important commodity in the Machine world and machining exotic metals like beryllium cannot be cut with anything else but diamond.
Alan: Now Tom, after 80 years, not only you're creating the gems and diamonds but you also cut some stones?
Tom: We cut a lot of stones, my father started the company as a mine would, selling the rough to cutters. I came in and saw the benefits of cutting the stone and marketing the product ourselves to the wholesale retail store and now we make jewelry, but cutting we have about 300 people in China that are cutting stones. We used to cut everything in the United States and unfortunately that particular field became unpopular in the 50s and it was too expensive so we've literally chased the dollar around the world finding cutters with the talent and that the price we can afford.
Alan: Now any of the listeners curious in the question, can I get a Chatham stone off the internet or as a person find you or do they go to the retail?
Tom: Well you can find us on the internet at Chatham.com and you will see our products, you can read about our story. My father's work, my work what we have for sale, find retailers by punching in a zip code, sometimes on occasion we will sell directly if there are no retailers but we always involve retailers anyway and they get a nice surprise check from us.
Alan: I've been visiting here today with Tom Chatham, he's a CEO of Chatham Created Gems and Diamonds, Tom's we're out of time today but it's been a pleasure having you on today's show.
Tom: Thank you, my pleasure