While engagement rings have been around for centuries, diamonds are a fairly late addition to the party. For many years, there just weren't that many diamonds on the world market, so diamond engagement rings were pretty rare.
In the 1870's, miners began discovering huge veins of diamonds in South Africa. Diamonds went from being a scarce gem to a fairly common commodity. This was bad news for anyone who had diamonds and wanted to make as much dough as possible. It didn't take long for diamond mine owners to come upon a plan.