covering
the output of the three months, October to December of that year, and
this contract was followed by an agreement dated 3 February 1890; the
1890 Syndicate comprised ten firms, each with a specific quota.
Dunkelsbuhler's quota in that year was 10 per cent and the signatory
for the firm was Bernhard Oppenheimer. The contract running at the time
of Ernest Oppenheimer's arrival in South Africa was the one dated 2
December 1901: Dunkelsbuhler's quota was 12 per cent, and eight firms
participated. This contract introduced a new principle of fundamental
significance: that of the division of profits between the Syndicate and
De Beers. 'At last', wrote one official of De Beers to another, 'we are
going to have a share in the huge profits which for so many years have
been pouring into the pockets of the Syndicate, to our detriment.' This
was to beg the question of what the situation would have been like if
sales and production had not been controlled.
The
fact is that the relations between the producers and the distributors,
which were to give Ernest Oppenheimer so much trouble in the years
between the wars, until the problem was finally resolved by him, had
given rise to difficulties from the very beginning. There was the
obvious difficulty that the creation of the Syndicate interfered with
the livelihood of diamond merchants, not themselves members of the
Syndicate, both in Kimberley and in London. There was the further
difficulty that some members of the Syndicate were also members of the
board of De Beers and that their interest as merchants might conflict
with their interests as shareholders and board members of De Beers. This particular difficulty was met by the creation of a 'diamond committee', consisting of those directors who were not members
of the Syndicate, though this did not necessarily make for harmony
within the board itself. There were also difficulties in the early
days, when there was a formal London board of the De Beers company,
between the Kimberley board and the London board. At times the policy
of the latter drew violent protests from the former. At an early stage,
Rhodes, in his anxiety to build up a 'reserve fund' for De Beers,
engaged in clandestine sales of diamonds in London, a policy which
could not, obviously, be continued without great risk of scandal and
the breakdown of the whole established selling machinery.8 In any case, Rhodes's views on what the diamond sales policy of De
8 The first systematic (though, in fact, only partial) account of these transactions will be found in A. Williams, Some Dreams Come True, Cape Town, no date (but probably 1948), pp- 327-30.
