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136
SIR ERNEST OPPENHEIMER
(a) a new syndicate including Barnato's; and
(b) a new syndicate without Barnato's.
There were advantages attached to the first alternative:
It
would be perfectly feasible for Barnato's, A. Dunkelsbuhler and
Company, the Anglo American Corporation and Johannesburg Consolidated
Investment to say now that they will not go into a syndicate led by L.
Breitmeyer and Company, and that they would form a syndicate of their
own. The Anglo American Corporation is quite strong enough and
sufficiently liquid to take 25 per cent in any syndicate. Should
Barnato's not be willing to take such a step, or even be unwilling to
come to an understanding on these points, I feel that we are going to
be left. On the other hand, a definite statement now as to our policy
would finish the imperious talk of L. Breitmeyer and Company. If no
arrangement is come to now, the Anglo American's position would be a
very awkward one at the end of the year, assuming that L. Breitmeyer
and Company and the Central Mining get their 35 per cent, Joel a
similar percentage, and Mosenthals and A. Dunkelsbuhler and Company
121 per cent each. Only 5 per cent remains, and then we run the risk of
Joel wanting to divide it with the Johannesburg Consolidated.
On
the other hand, he also had some strong cards to play: Consolidated
Diamond Mines was a party to the inter-producers' agreement, and with
the Government concerned with the bargaining between producers and
distributors, the most favourable competitive bid would be bound to be
accepted. Nevertheless, on balance, it was worth while to do all that
was possible to secure the adherence of Barnato Brothers and he
proposed a bold step to that end. He put the whole situation in the
following terms:
The
fact of the Anglo American Corporation being in the Syndicate will
therefore make it much easier to get South West Africa to agree to
favourable terms. Should Barnato's refuse to come to some tentative
arrangement now with regard to future percentages, then it is a sure
sign that we can expect no assistance from them when the contract is
being discussed. It is just as well to consider this position. The four
producers can only sell jointly and, under Government chairmanship (Mr.
Malan will preside at the inter-producers' conference, whenever it
takes place), will only accept the best offer. It seems therefore
advisable (assuming that no satisfactory arrangement could be come to
with Barnato's) to consider the idea of forming a syndicate of our
own. Such a new syndicate would undoubtedly succeed in either securing
the contract with the four producers or breaking up the existing
combination. It would succeed, because it can offer better terms than
the old syndicate since it would have no old stock or commitments. Of course it would be
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