Chatham Created Gems and Diamonds | Tom Chatham
About Carroll Chatham
In the 1920’s, Carroll Chatham at the age of 12 built his first gem growing laboratory in his family’s garage. By 1938 he had mastered growing emeralds and went on to growing rubies, sapphires and other precious stones. In 1965, his son Tom Chatham joined him in business and was eventually able to fulfill his father’s lifelong dream of culturing diamonds in a laboratory. Today Chatham produce gemstones on an international scale- all of which are structurally and chemically identical to gems mined from the earth. Not only do they grow their own gems, but they cut and facet their own jewelry as well. For more information on Chatham created Gems and Diamonds visit: https://www.chatham.com
Interview Transcript:
Alan
Welcome back. I’m visiting here today with Tom Chatham. And Tom, welcome to today’s show.
Tom
You’re welcome. Glad to be here.
Alan
So Tom, you’re you’re an icon in the in the in the gym industry, a lot of people were your products, they may not know where it came from, though. So can you give the listeners background of, you know how you got where you are today and in the business model that you’ve run?
Tom
Well, the real icon was my father, Caroll 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. Caroll 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 Caltech in Pasadena, started a business. The Second World War took 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 or chemistry and math, but it was really a waste of time. He was so good. Handbook of Chemistry is about six inches thick, and he memorized it. I mean, I can already find things in it, much less memorize it. I got to work with him for 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 Caroll Chatham came from the Old School of Chemistry in the 20s and 30s, you tasted things, you smelled things, you know, if you could stand the smell you put up with it? Well, some of these things we now know are are very dangerous. But I came to him and 65 and we began work on Ruby. He had already accomplished emerald, and was written up in many periodicals and newspapers, in front pages, and even in Ripley’s Believe It or Not this young kid growing emeralds in San Francisco. And we develop processes for all of the important gemstones. First, it was emerald, then Ruby, then blue sapphire, Blue Sapphire was extremely difficult, and we couldn’t figure out how to grow it. And its little backup, Sapphire and Ruby are all the same corundum and little coloring agents dope. And 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 a crystal to go bad. I mean, the crystals will 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 orange sapphire, or pink sapphire, or white Sapphire. So it’ll let 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 involve taking over other companies were competitors at the time. The Holy Grail of crystal growth has been diamond. And that’s what Caroll 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, getting 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 is curious?
Tom
I have pictures of his laboratory he built when he was 12 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 to 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 don’t try and mix a big bowl of gunpowder together because just rubbing it together can set it off. You know, so little things like that. But it was great growing up and in 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 the iron, and that’s potassium. And that’s, you know, you mix those two together, and you get those colors. You know, we, at 12 years old, we could care less, you know, just big booms. So, so I came into the laboratories and 65 and.
Alan
At the age of 21 you’d grown up around the environment or your your dad, the chemists. So clearly, you had you gone through school at the time, or what was your feeling is like, yeah, you’re more tutored than you were schooled in 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 in sharing everything with a 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 tell you grows emeralds. That didn’t work.
Alan
Now they did a TV program way back when on on your dad, you asked for it or ask for it.
Tom
It always says Jack Smith, it was black and white. I’m gonna say 1957-58?
Alan
It made it a little bit easier to explain as to go watch TV and see what my dad does.
Tom
They came in and into the laboratories. And he tried to explain verbally what he was doing. He wouldn’t show him 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 they wanted to know how can you separate if it’s identical, if it’s the same as a natural emerald, how can anybody separated 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 Indian what have you. So if you study enough emerald, you can become an expert at separation. And we share all of our products with the all of the major gemological institutes around the world, they study them, they learn where to what to look for in the stone, and then they make the determination. But my father had a different way of separating the stones. He wasn’t a geologist, he was way above being a geologist. He was a chemist. But the difference between gemology and chemistry is the chemistry you often get into destructive identifications. You have to take the thing apart to know what it’s made out of, well, Geology that’s a big no, no, you don’t want somebody destroying, you know, the corner of your $5,000 emerald. The Carol 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 will 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 at all. 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 or all of a sudden, the natural emerald blows up. chatters and it was priceless to see Jack Smith’s face See The Emerald that he paid for it explode. And my father very calmly said this is a way you can absolutely separate the two different products. He went up water content and the natural emerald will make it explode in the chat and we’ll be fine because we don’t use any water in our process.
Alan
Tom, I need to take a quick break and visit here today with Tom Chatham. He’s the CEO of Chatham Med, lab credit gems 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 gemstones and diamonds and your dad started this over 80 years ago. And then you join in 1965. And boy, how the industry has changed. But I want to I want to roll into lab created gems versus natural, naturally mined once, why would someone want to purchase one versus the other and and is the price point roughly the same because these are, this is not something where you put 5000 a day out this is this is a real process to make a gemstone?
Tom
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, and 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 where it has too many inclusions. Emerald is fragile, it can break easily, when somebody hits a ring, what 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 gemstones.
Alan
Let’s differentiate. So just for the listeners out there, you know maybe when we talk about lab credit, we think about cubic zirconia. And something I mean we’re we’re we’re way off that where it’s it’s a year to make these differentiating natural versus a gem created is not always easy as it?
Tom
Not easy at all, I mean that the experts have come to up after we’ve developed a product and get samples by 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’s 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 chatter more it’s Colombian or African. But the host material the Emerald is identical but it has to be properly disclosed. I mean that’s it’s a controversial area right now 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 the world is going to come to an end in the Emerald business and it didn’t world is gonna come to an end and the Ruby business and it didn’t.
Alan
So the the the discretionary mind of the consumer so the like if the natural versus the lab created, processes are roughly the same. Why there’ll be a price differences. It’s a silly question. But it is at the same time when the market is bearing the price you, if I understand this correctly, what you’re able to do is you’re able to give a deliverable for mass production 5000 units or something were at mine, diamond is not going to be the same.
Tom
It’s difficult, okay. I mean, I’ve had a chore, we sometimes supply natural gemstones, people on a special order basis. And I had somebody who requested twice 12 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, you’re crazy, you can’t do that. You’re gonna be all over the world trying to collect this. And I said, Why is it so hard to have 12? Stones? The same? That? You know, don’t you? I mean, 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 what, that’s the difference between that’s good, 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
Yeah, which is interesting, it says, so sometimes in this industry, people will go into the large shopping malls, and see a jewelry store here in there, and not really give a thought about, you know, how these stores across the United States are supplied. And the reality is you’re giving a very good quality gem, but you’re able to because you’re able to produce in the mass quantities, these stores can exist. If Am I say that right?
Tom
Well, not quite right. It’s not that we can I mean, that’s certainly true. It’s that we will Yeah, okay, we have that drive to be more competitive. What can we do the natural doesn’t want to do it, they can do it. But they will lose a lot of yield. And I’ve given talks to natural stone people said this is what you know, this is why we’re successful and you’re not. And well, we can’t do that. It Oh, it’s easier for you because you make the stone. So wait a minute, you’re saying I’m cheaper than you are. So we of course, you’re cheaper. I said wait a minute. What are your natural stones come from? You pick them up off the ground for nothing? Oh, no, we’ve got all sorts of costs. If 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 are give you our take heart attack.
Alan
Tom, I need to take a quick break and visit here today with Tom Chatham. Chatham created gems and diamonds and we’ll be right back after these messages.
Alan
Welcome back. And because I’m here today with Tom Chatham of Chatham, creative gems and diamonds and Tom fascinating story how your father started the these processes some 80 years ago and developed and perfected the, the the creation of gems and diamonds, is it following a natural process? And this is not done overnight? You know, I understand it must have been tough for the purists to say, well, natural versus, you know, created stone. But what challenges have you faced over the years with the purists versus what you’re doing there?
Tom
Yes, there are. A lot of purists in the gym industry. They 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 cell phones you know the computerization is all based on growing a crystal at 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 a culture pearl in 1910. And it competed with the natural pearl that used to be extremely valuable. I mean, the car to a building was traded for a strand of culture pearls back in, I don’t know, in the 50s. So that fear was there. And when Carol 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, DC Federal Trade Commission, and Carol 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 urs ads or 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 wasn’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, DC, that was cheap. It was not cheap. It was 1959 through 62. And the opposition, I think, knew the Carroll Chatham would not divulge how we made the stone How could you culture the stone you have in the judge even said You know, I’m 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 goodness 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 is contempt of court. One year in jail and $5,000 a day in my private 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 thought for a few minutes just Okay, everybody in chambers, you know, he knew he made a mistake. There’s no way you can legally get away with us either. Forcing my father yeah, 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 can’t you refuse to divulge. I understand that. Let’s find some other words that will satisfy everybody and my policy as well we we’ve had a lot of people working on it. We can’t figure out other words that would be a good descriptive phrase that meaningful and honest. And the judge suggested created because you’re creating emerald my fastest Yeah. And will want you call a Chatham created emerald. Greg, we hadn’t even thought of that. And signed off on it three years to get that word. No, it didn’t take three years to get that we got to that point Yeah. In six months Okay. signed off on it. changed all the advertising change the corporate name, change everyone’s business card. All the advertising we were doing change to Chatham created emerald. Got another cease and desist order. Prove that you’re creating emerald or metal cease and desist. This was a different fight. Okay. Proving that we created emerald was 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 GAA what is chatter make? What is he creating well? Are they would sometimes mumble, or emerald, speak up? Speak up? Yes. I
Alan
Are you patented?
Tom
No patent.
Alan
No patents?
Tom
You can’t my father had good advice when he went to a patent attorney when he first grew emerald and he says, Ash shouldn’t I patent this process? And he said, Well, what do you make and let me see it. And he said, 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 in opposition were 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 in the court. We’re talking about laws. And the 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 G IA that saw the bees and other places, you know, what is Chatham making? And they kept having to answer while 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 was so misleading that it wouldn’t be fair to the public because the FTC works 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 it just for clarifying as the the listeners are, you know, we’re going through this using cubic zirconium. As a replacement for Diamond we were this is apples and oranges. When we’re talking about a Chatham created Jemen diamond, this is not anywhere close to the comparison of a cubic zirconium to a diamond. Is that okay?
Tom
Not at all. The only thing Chatham will produce is identical to the naturally occurring gemstone. Killing Chikungunya is an imitation. Okay, yeah. of diamond. So it was Moissanite. It’s a different compound, our emerald, ruby diamond sapphires, what have you are identical in chemical structure, Crystal and structure, hardness. Everything that a material is measured by is identical in our product.
Alan
Thank you. So So you finally were able to get through all this the second round of lawsuits, I had that thing, finally end?
Tom
That finally ended in 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 adjust for you, and go after the other people using it? Because we had competitors in the 50s and 60s, Union Carbide at an emerald process? And a few other people did that. We said no, we don’t think they should be called synthetic Gator. If they’re making a product. It’s like ours, they should have the same rights that we do. And so we’re not going to try and hold on to this precedent. We want it to stand and as it should, as it does today.
Alan
So when we’re looking at the the gym said you do grow and diamonds, what is the hardest one to grow with the hardest gemstone to grow?
Tom
Oh, that’s a difficult question. All of them require different environments. crystal growth is 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 to 10 carats size of rough and it’s it’s the environment though that is extreme. We’re talking 1300 degrees centigrade under 700,000 pounds per square inch. And to accomplish that, the steel is three three, excuse me three storeys high to maintain this hydraulic pressure that is trying to melt itself because of the temperature push itself apart. Can pewters are controlling everything. And it’s a very complicated environment to recreate that and if we don’t we get graphite. We don’t get diamond.
Alan
So for the listeners, every every show that we do, we videotape it, put it back to our website at Grl seo.com. And in Tom has shared that he’d be willing to share a picture here of, of one of these machines, three stories high. And in you said 700,000 pounds per square foot per square inch. Wow.
Tom
Yeah. Wow.
Alan
That’s a long push. Yeah, that’s a lot of pushing in the end. And it speaks to 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
That time give after 80 years. Not only you creating the gems and diamonds, but you also cut some stones or?
Tom
Cut a lot of stones. My father started the company as a mind wood 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 at the price we can afford.
Alan
Now, any of the listeners curious in the question, Can I kind of get a Chatham stone off the internet or has a person find 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 and find retailers by punching in a zip code. Some cons 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 busy here today with Tom Chatham. He’s the C. E o of Chatham created gems and diamonds. Tom, we’re out of time today, but it’s been a pleasure having you on today’s show.
Tom
Thank you. My pleasure.
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In the 1920’s, Carroll Chatham at the age of 12 built his first gem growing laboratory in his family’s garage. By 1938 he had mastered growing emeralds and went on to growing rubies, sapphires and other precious stones. In 1965, his son Tom Chatham joined him in business and was eventually able to fulfill his father’s lifelong dream of culturing diamonds in a laboratory. Today Chatham produce gemstones on an international scale- all of which are structurally and chemically identical to gems mined from the earth. Not only do they grow their own gems, but they cut and facet their own jewelry as well. For more information on Chatham created Gems and Diamonds visit: https://www.chatham.com
Alan is managing partner at Greenstein, Rogoff, Olsen & Co., LLP, (GROCO) and is a respected leader in his field. He is also the radio show host to American Dreams. Alan’s CPA firm resides in the San Francisco Bay Area and serves some of the most influential Venture Capitalist in the world. GROCO’s affluent CPA core competency is advising High Net Worth individual clients in tax and financial strategies. Alan is a current member of the Stanford Institute for Economic Policy Research (S.I.E.P.R.) SIEPR’s goal is to improve long-term economic policy. Alan has more than 25 years of experience in public accounting and develops innovative financial strategies for business enterprises. Alan also serves on President Kim Clark’s BYU-Idaho Advancement council. (President Clark lead the Harvard Business School programs for 30 years prior to joining BYU-idaho. As a specialist in income tax, Alan frequently lectures and writes articles about tax issues for professional organizations and community groups. He also teaches accounting as a member of the adjunct faculty at Ohlone College.