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6o
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SIR ERNEST OPPENHEIMER
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be
only 25 per cent. Undoubtedly, the Government interest made agreement
with De Beers and the Syndicate more difficult. Government had such a
large financial stake in the mine, moreover, that a large output was
required to compensate the minority shareholder for the total costs
involved. The mine was, in fact, a very large one: the output per load
was relatively smaller than at Kimberley and the stones were
predominantly small stones (in spite of the discovery there of the
Cullinan Diamond of 3,024 carats). If an agreement was to be arrived
at, tact was necessary: unfortunately it was absent.
From
the start, Alfred Beit, in particular, was anxious for De Beers to
arrive at an agreement with the Premier Mine. But the then dominant
spirit at De Beers—Francis Oats—was more than sceptical: he, at first,
thought the mine 'salted'—'the whole thing was a fake'. This obviously
did not make for friendly relations—though De Beers did allow the
Premier to use the then new 'grease tables' against payment of a
royalty. The Premier set up its own selling organization in London and
embarked upon a vigorous production programme. In spite of falling
yields per load, output rose between 1904 and 1907 from 750,000 carats
to 1,890,000 carats; the aggregate De Beers output, though it
fluctuated, was 2,056,000 carats in 1904 and 2,062,000 carats in 1907.
The burden of keeping aggregate output within the absorptive capacity
of the market was clearly taken by De Beers; though, in those years
until 1907, a rising tide of world prosperity meant that, for De Beers
stones, prices were rising. Prices were stable for Premier stones in
1904 and 1905, and they rose sharply in 1906.
The
situation was to alter abruptly in 1907. At the annual meeting of De
Beers on 30 November 1906, Francis Oats had been somewhat scornful of
the
several
discoveries of diamondiferous deposits [that] have been made in other
parts of the country during the past few years, the real or supposed
value of which has in no instance been minimized by those interested.
... I can only say that we are not alarmed or disturbed by these new
discoveries, for, judging from the work done up to the present, our
five mines are high grade in comparison with any of these new
propositions.
By
the time of the next meeting on 14 December 1907, the American market,
taking some 70 per cent of the output, had collapsed, Europe was also
suffering from a depression, and there was heavy unemployment hi the
cutting centres of Antwerp and Amsterdam. The selling arrangements with
the Syndicate, which dated from 30 July 1906, called for a six-monthly
delivery of diamonds to the monthly value of
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