124
SIR ERNEST OPPENHEIMER
were
exempted. These rates of duty were subsequently doubled: and by Act 38
of 1919 provision was made for the establishment of a diamond-cutting
industry in the Union.
The
decision to create such an industry raised several issues of
fundamental importance. The great traditional centres of the
production of cut diamonds were Amsterdam and Antwerp; there were
cutting establishments elsewhere, in Paris, in New York, in the Jura,
in Germany—and some cutting had even been done in England—
nevertheless, the first-named places dominated the position. If an
industry was to be established in South Africa, were the cutters to be
subjected to the same terms of purchase as the rest of the world?4 Again,
it was common ground that to establish a new industry, of a highly
skilled kind, in face of international competition required special
measures of assistance: was a 10 per cent export duty on uncut stones
and exemption for cut stones enough, or should the industry receive
further assistance in the shape of bounties or special prices for
stones it required? And how far was the Union Government justified in
losing revenue from export duty, and risking the whole future of the
mining industry by attempts to divert trade from its old traditional
centres? And was there not a grave risk of encouraging illicit diamond
buying?
The
De Beers Consolidated Mines, which were, of course, vitally concerned
with the issues involved, had received information that the Botha
Government was 'determined' to proceed with the effort to establish a
diamond-cutting industry. The Dc Beers minutes for 24 March 1919 record
that a letter was read from the London transfer office, dated 21
February, in which, inter alia, they report upon an interview
between some of the directors in London and General Louis Botha, Prime
Minister of the Union, on the subject of the establishment of a
diamond-cutting industry in South Africa:
The
attitude adopted by General Botha was that his Government was
determined to carry the project through at all hazards and he could not
consider the suggestion of a State monopoly; the only point of
difference apparently is the question of price, as General Botha
rejected the company's offer to supply a fixed percentage of the total
production at current prices and insisted that a new industry in order
to succeed must be given certain advantages. He, however, undertook to
consider the company's proposals.
4 The underlying point at issue was whether cutters in South Africa were to be allowed to buy individual stones or were to buy, as the rest of the world was required to do, a particular series of stones.
