best
possible technical advice, but I challenge anyone to value a single
diamond to within 5 per cent. I challenge anyone to say that any given
diamonds are worth just £100. They may, in fact, be worth £105 or they may be worth £95.
In a large parcel of diamonds experienced valuators find that the
mistakes made in one lot are equalized in another. Say, for instance,
that two expert valuators, Mr. Brink for one, and if I may mention
myself for the other, were to value a large parcel of diamonds, the
total valuation would probably be approximately the same in each case,
but in individual stones we might differ much more than 5 per cent.
As regards the concessions made on partly manufactured stones of under one carat in weight—
let
me tell the Minister that, if the whole production of the Union were to
be taken and cleaved, there would hardly be a single stone weighing
more than one carat, so that the proposed concession is really being
made on the whole production of the Union. . . . An infinitesimal
amount of work and money is required for simply cleaving or sawing a
stone as compared to the cost of producing a brilliant. Yet the process
of cleaving produces a partly manufactured stone in terms of the Act,
and would entitle a man to the enormous concessions which the Minister
proposes.
The profits would encourage competition; the first coiner would
reap
the full advantage, but the next man who comes along and contracts for
perhaps a large percentage of the output will discover that the value
of diamonds has already dropped as the result of the concessions given
to the first man, and in this way the diamond market will be undermined.
This
speech was made on 4 June 1926. He returned to the attack in the next
year—on 3 February 1927. He challenged the assumption that the bill was
necessary in order that cutters could get the stones they needed: 'we
have not made it difficult for a man to get the diamonds he wants, nor
have we sold them to him at prices which were unprofitable to him.' The
amendments were 'reflections on the existing trade in rough diamonds
and they are uncalled for reflections'.6
5
He summed up: 'I submit, however, that the very fact that this
exemption of duty for diamonds of one carat and under has been asked
for practically proves that only the smallest portion of the production
of diamonds in South Africa can be successfully cut, even if the
present amendments are carried into law. As we have quite enough
troubles in the diamond trade, I feel that this amending bill should
not be passed at the present moment. What is wrong with the measure is
the very principle on which it is based. The advantage a cutter obtains
under the bill is an ad valorem advantage. He saves the export
tax and he obtains diamonds at a somewhat reduced price. But the value
of a particular diamond has very little to do with the cutting
expenses. The poorer the quality of the diamond and the smaller its
size, the less its value and the more expensive the cutting charges.
Therefore, how can an ad valorem duty, which in the case of a
very valuable stone would afford undue protection, be of help in the
case of the bulk of the diamonds produced in South Africa, as at least
75 per cent of them are of one carat and
