In 1931, Robert M. Shipley founded the GIA as an educational institution. In 1934, three later, Shipley created the AGS, or American Gem Society, as a collective of jewelers and retailers who agreed to adhere to rigid standards in evaluating and selling their products. By doing this, Shipley hoped to create an ethical cornerstone in the professional world to complement the ideals taught at the GIA.
For decades the two institutions have coexisted symbiotically--in fact the AGS offers educational courses in Gem Appraising that require GIA Gemology courses as prerequisites! The one thing that the AGS did not offer was its own grading certificates, although they had been developing the idea of a diamond grading system for about thirty years. The GIA Diamond Grading Report had meanwhile become the most respected in the industry, and was the standard worldwide. But by the mid-1990s the technology had finally advanced to where the AGS system was feasible.

In 1996 the AGS shook up the industry by opening up its own grading laboratory--in direct competition with the GIA--complete with its own grading certificate, the AGS Diamond Quality Document. Moreover, the AGS created a whole new standard of grading, replacing both the Clarity and the Color Grade with a 0-10 number. For instance, instead of F VS2, a diamond would be graded 1.0 Color and 4.0 Clarity. But the real controversy arose from the grading of cut the same way. Whereas GIA reports only state table percentage and length-to-width ratio, the AGS 0-10 Cut Grade takes into account all proportions including crown angle and pavilion depth, as well as polish and symmetry. The AGS insists that these proportion factors are crucial in the proper evaluation of a round brilliant diamond. The GIA, not surprisingly, disagrees. (See our article on Ideal Cut). All jewelers and dealers who are members of the AGS now issue the AGS Diamond Quality Document with their diamonds, and many fine diamonds from other reputable retailers will now have AGS certification instead of GIA. The AGS also offers a Diamond Quality Report much more similar to the GIA's, for dealers and retailers that prefer not to have proportions graded.
Depite the conflict between the two institutions, both remain highly respected for their impartiality. AGS members are required to adhere to strict standards in truth in advertising, truth in pricing and business practices. These practices include full disclosure of gemstone treatments and enhancements. The American Gem Society also enforces a Grievance and Review policy which is provided for consumers' protection.
Whether or not AGS Diamond Quality Documents will become as popular as GIA Diamond Grading Reports remains to be seen. Many fine retailers are proud to offer AGS certificates with some of their diamonds, because the AGS has firmly established itself as commited to Shipley's vision of being "Dedicated to Ethics, Knowledge and Consumer Protection."