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CHAPTER IV
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The Diamond Story
PART TWO
FROM CRISIS TO CHAIRMANSHIP OF DE BEERS
1926-1930.
These five years —from Ernest Oppenheimer's forty-sixth to his fiftieth
year —posed some fundamental problems. In addition to the growing
output of diamonds in the Congo and Portuguese West Africa, and
elsewhere, diamond production in Southern Africa was, for the time
being, revolutionized by the dramatic discoveries of alluvial diamonds
at Lichtenburg in the western Transvaal and in inhospitable
Namaqualand. Ernest Oppcnheimer had become a director of De Beers
Consolidated Mines in July 1926 and naturally nourished the ambition to
become chairman, though his being head of the Diamond Syndicate was an
obstacle. He obtained control over the potential production of the
Lichtenburg area and of the 'Merensky' diamond hoard of Namaqualand:
and these acquisitions greatly strengthened his hands in negotiations
with De Beers—negotiations which at times were the reverse of pleasant.
He was striving for unification of all diamond-producing interests
under his leadership. In the end his views prevailed and he became
chairman of De Beers in 1929. During these years also the
reorganization of the marketing mechanism became a matter of urgent
discussion: the problem to be solved was the creation of an
organization which would give the producers control, i.e. the
replacement of the Diamond Syndicate by a 'buying and selling company'.
What finally emerged was the Diamond Corporation.
Throughout
this period also negotiations with Government were continuous and
arduous. The passage of the Precious Stones Act, 1927, gave Government
wide powers: Government entered the field of production by creating the
State diggings in Namaqualand and Government also affected the
situation by its selling policy and its attitude towards the South
African diamond-cutting industry.
,5, I .,.
ith the formation of
the 'new' Syndicate, Ernest Oppenheimer's power and prestige in the
diamond world were, of course, greatly increased. He had established
the vitally necessary friendly relations with Barnato Brothers, without
which the new Syndicate could not have come into existence. These
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