year
and was reintroduced in the following year and finally emerged as Act 2
of 1927. It increased the allowances specified in the previous act to
an over-all figure of 5 per cent, but, apart from this, it modified the
conditions of trade to the advantage of the cutter in two further
important respects. It no longer made it mandatory for the Minister to
direct a sale by 'series' if he issued an order on a producer or a
dealer, but only required him to do so in his discretion—the Minister 'may direct that such diamonds shall be taken in a series'.
Further,
under the 1919 Act the Government had been empowered to enter into an
agreement 'for the establishment in the Union by the other party ... of
a factory whereat such party undertakes that he will . . . carry on the
business of cutting or polishing rough or uncut diamonds'—though such
an agreement was not to convey a monopoly. The amending Act provided
that, if such an agreement were concluded, the Government was
empowered to allow the export of diamonds not exceeding one carat in
weight, 'in a partly manufactured state', at a rate of export
duty of 2| per cent for the first two years, and thereafter at the rate
of 5 per cent; the only proviso being that such stones were 'the
remnants of diamonds completely cut and polished by such cutter in his
factory in the Union'.
These
provisions cut at the root of the established procedures and opened the
door to obvious abuses. The discussions in the legislature gave Ernest
Oppenheimer the opportunity of making some devastating speeches: they
were not long, but they presented an overwhelming case against the
amendments. Apart from the fact that the proposed changes were
originally contained in the draft bill of 1919 and had been rejected
with the aid of the very parliamentary party which was now
reintroducing them, they undermined the whole industry. It was wrong in
principle to allow single stones to be bought at prices which
represented the cost of buying in bulk:
So
long as this demand for single stones was small no great harm would be
done, but when the trade develops—and the whole object of this bill is
to develop the diamond-cutting industry on a big scale—then we should
be faced with the position of having to sell a large number of single
stones and be left with the others on our hands. That in due course
would make us bankrupt.
In any case, the problem of valuing a single stone was insuperable:
it
is absolutely impossible to ascertain what an individual diamond costs.
As far as rough diamonds are concerned, undoubtedly the Minister has the
