APPENDIX II (See section X, p. 147, above)
ernest oppenheimer's own account of the crisis in the Diamond Syndicate as sent to the Minister of Mines on 28 March 1925, is as follows:
After
the negotiations between the old Diamond Syndicate and the four Union
producers had finally and definitely been broken off—which fact, in
terms of the old Syndicate arrangement, automatically dissolved that
Syndicate, with the exception of the liquidation of its stock—Mr. Brink
approached me, in view of my corporation's huge interest (over
.£2,000,000) in the Consolidated company, with a view to my assisting
the company by purchasing the diamonds on minimum terms which he
outlined.
I
then made one more effort to induce the old Syndicate to accept these
terms, and actually went so far as to say that I would buy the diamonds
for my own account and if they came to terms with the other three
producers, they could take them over. Not only did they point blank
refuse to deal on the minimum terms, on the ground that they would at
no time agree to periodic and automatic price adjustment, but neither
would they accept my proposal to take over the diamonds. This led to
the final break and I purchased the South West diamonds on Mr. Brink's
terms for account of the Anglo American Corporation of South Africa
Limited.
Subsequently
I made an identical offer for the De Beers and Premier diamonds. I was
asked to keep my offer open for a number of days, to which I agreed.
This period of time was used by De Beers to communicate my terms to the
members of the old Syndicate, who had by then submitted a worse offer,
so that they could amend their offer to make it appear equally good.
The Syndicate did amend their offer and I was finally informed that my
offer was refused as the company had made other arrangements for the
disposal of their diamonds. I was given no chance to improve on my
offer, which I would undoubtedly have done as is proved by the fact
that I did improve subsequently on the South West offer.
The
question now arises whether the old Syndicate can look upon it as
unbusinesslike that the Consolidated company, with the approval of the
Government, sold its diamonds for five years without giving it an
opportunity of competing. Considering that the old Syndicate were not
prepared to even accept the minimum terms suggested by Mr. Brink and
would make no advance whatever on their previous offer to purchase on
the basis of the 1924 rates, it would certainly have been a waste of
time to ask them whether they would be prepared to deal on still worse
terms, especially as they did not give De Beers, Jagersfontein and
Premier as good terms as I had offered.
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