West
Africa. The board was to consist of five persons, three representing
the producers and two the Administration, but, in fact, the
arrangements provided for left the Administrator in a position of very
considerable authority; the board was a consultative and advisory and not a
mandatory body, so that the last word, e.g. in the allocation of quotas
and the power to make regulations, lay with the Administrator, who was
also free to revoke at any time the tenure of a member. It thus came
about that the representation at producers' and sellers' conferences of
South West African diamond interests was in the hands of the
Administrator. This was to cause much difficulty in the troublous days
ahead.
Even
if the relations between producers and distributors had been entirely
free from difficulty in the Union in the immediate post-war years, it
was unlikely that the Union Government would have been willing to see a
situation arise in which it would be virtually in control of production
and distribution in one part of the area and not possess any
controlling power at all in the rest. In fact, there developed
difficulties between the producers and the distributors, and among the
distributors inter se, which were to culminate in the
formation of a new syndicate by Ernest Oppenheimer—events which are
described in the next section. These difficulties furnished the direct
occasion for intervention. The upshot was the passage of Act 39 of
1925—'an act to provide for the control of the sale and export of
diamonds and for the establishment of a diamond control board in the
Union'. The powers assumed were very wide: the Government was given
authority to fix quotas and minimum prices: to create a 'Union Diamond
Board' with power to purchase, sell, deal in and hold stocks of
diamonds, and to export diamonds from the Union, including the right to
'demand and receive diamonds from any producers named by the
board ... for export and sale on their behalf; and to create a monopoly
of sale and export through the board' (section 16(1)). Further, by
later provisions of the statute, the Government was given power to
validate agreements for the sale of diamonds, to prohibit export of
diamonds not sold in terms of such validated agreements, and to convene
conferences for negotiating agreements. Inter alia, the
Government might require, as a condition of approval, preference to be
given to purchasers within the Union and to require that 'all and any
particular sales of diamonds shall be by tender', under regulations to
be prescribed.1 The proposed
1
The clause containing this preferential right had been inspired by
Ernest Oppenheimer himself and later proved to be of great tactical
importance to him. Vide infra, pp. 151, 153 and 162.
