The jewels in a watch were, for the most part, the bearings. These were industrial jewels, not at all gem quality. They provided hard, low-friction, wear-resistant surfaces.

The basic number of jewels in an American “Basic Jeweled Watch” is 7, all of which are on the balance and escapement. The roller jewel, mounted on the balance assembly, is the reason for the odd number of jewels. All of the other jewels, up to 7 are added in pairs.

1 Roller Jewel
2 Balance Hole Jewels
2 Balance Cap Jewels
2 Entrance and Exit Pallet Jewels

These are all involved in the controlled release of mainspring power to the train and thus directly affect the timekeeping rate of the watch.

Additions Up To 15 Watch Jewels: From the 1860’s through the 1880’s, watches were said to be “Full Jeweled” or "Fully Jeweled" if they contained 15 jewels.

Moving upward from 15, jewels were added in pairs with the one exception being the upper center jewel in 16-jewel watches. The top center hole of a watch is subject to a relatively large amount of force. Poorly maintained watches of 15-jewels, or less, tend to exhibit wear in this hole. Thus, adding an upper center jewel reduces the friction and resultant wear associated with the higher forces. However, the lower center hole is relatively free of force, and hence, doesn't require a jewel. Thus, in the late 1880s, an upper center jewel began to be added, appearing is such watches as the 16-jewel, Columbus Railway King grade (and other Columbus grades). By the early 1890s, Illinois' 18-size, 16-Jewel Bunn (having no lower center jewel) was the highest grade watch in their line. It was right at that time that Dueber-Hampden Created and Heavily Promoted a new line of 17-jewel watches (having added a lower center jewel), causing the market to shift to 17-jewel and higher jeweled watches over the next five years.

Still, that 17th jewel generally isn't considered necessary and many high grade European watch makers didn't bother with it. It's not only the high grade European watches that don't have the unnecessary (well, very much less necessary) lower center jewel. In 1895, the best 18-size Elgin watch was the grade Nos. 149 & 150 (hunting-case and open-face), 20-Jewel Movement. However, market pressure forced Elgin to increase them to 21-jewel watches within a few years.

Adding additional jewels (beyond 17), up to 19, usually produced a demonstrable improvement in timekeeping accuracy. In adding 2 more jewels to bring a watch up to 21, the increase in accuracy was more theoretical than practical. Any number of jewels over 21 usually failed to gain any additional timekeeping improvement. It should be noted that additional labor to properly adjust a watch did more to improve accuracy than adding jewels above 16 or 19. In fact, the Elgin grade No. 240 B.W. Raymond, a 19-jewel, 18-size, Veritas model (three-quarter plate) movement, is considered by quite a few people to be one of the best timekeepers ever made.

On page 19 of a July 1905 Webb C. Ball Watch Company catalog, the following is stated:
"17 jewels equip a good railroad watch when properly finished and adjusted; 19 can be used by setting the two extra jewels in the barrel bearing; beyond that suggestions about additional jewels smack of brimstone and deceit."

For a good online reference regarding jewel types and descriptions, Robert Sweet has posted an Excerpt from Technical Manual 9-1575, (War Dept. Tech. Manual), 6 April 1945.Also, there is an excellent discussion of watch jewels entitled Why Watches Have Jewels on Wayne Schlitt's Elgin Website.

In viewing an American-built, 18-size, full-plate movement, a good rule-of-thumb to determine if it probably is a "full jeweled watch" (has at least 15 jewels) is to see if the top plate pivot holes are jeweled with screw-down jewel settings. If there are screw-down jewel settings, it is probably a 15-jewel movement. If not, and the jewels are friction-fit into the plates, than the movement has 11 jewels (or perhaps 13). This rule-of-thumb isn't infallible - there are exceptions, but it will hold up in most instances.

A quick check to see if an American-made watch has more than 15 jewels is to check to see if there is a Center Jewel in the upper plate or bridge. Almost all American-made 15-jewel watches (and lower, I can't think of an exception) lack this center jewel. However, the presence of the center jewel doesn't mean that the watch has 17-jewels. A significant number of American-made 16-jewel watches of the 1889-1894 era (plus or minus a few years) were fitted with an upper center jewel, but not a lower center jewel. For example, in the late 1880s, there were a number of 16-jewel Watches in the Columbus Line and by the early 1890s, Illinois' 18-size, 16-jewel Bunn (having no lower center jewel) was the highest grade watch in their line.

To determine if an American-made watch has more than 16-jewels there is another good rule-of-thumb that applies to watches built after 1890:
If it isn't marked as having more than 16 jewels, then it probably doesn't.
Like all rules-of-thumb, there are exceptions, but this applies in most cases. And, for those watches built prior to 1891 (when Dueber-Hampden launched an advertising blitz for its Line of 17-Jewel Watches), only a very small percentage (less than 1%) had 17 jewels or more. On an earlier version of this message board, Tom McIntyre (a person whose opinions are highly regarded) agreed with an estimate of 10,000 of such watches built prior to 1891, a time by which the American jeweled watch industry had produced millions of watches.