willing
you should occupy position, felt dual position as chairman and
practically head Diamond Syndicate incompatible. I explained that you
were acting chairman Consolidated Diamond Mines, showing it was a
possible proposition. Morgan, Grenfell and Company see our point of
view . . . [and] thought your full plan would obviously be best for all
concerned.
By
this time, it is evident the discussion of the 'full plan' was
encountering very heavy weather. The proposal in itself was simple
enough: De Beers was to take over all diamond interests and accept Ernest Oppenheimer as leader.
It
must not be overlooked, in following the course of negotiations, that
Ernest Oppenheimer was in a very strong position—stronger, in fact,
than that of De Beers. He had the ear of the Opposition and was on no
unfriendly terms with the Government; he controlled the Syndicate, he
had acquired important interests in the H.M. Association shares, and he
had interests in Angola and African Selection Trust, as well as
friendly relations with the Congo companies and in British Guiana. He
was associated with Solly Joel in Lichtenburg and at Alexander Bay and,
if not a majority holder in De Beers itself, he and his associated
companies held very large parcels of its shares. If the market
weakened, he could acquire more De Beers shares if necessary, and so
increase his hold. He had powerful friends in the City of London; his
prestige was high and rising. Against all this, De Beers suffered from
lack of leadership in South Africa, and the increased competition of
alluvial directly affected it both as regards the output of the Premier
Mine and the Kimberley mines. It took a very long time—it had not yet
arrived—for the older hands at De Beers fully to grasp the strength of
Ernest Oppenheimer's position; the case was fully deployed later on.
But it is clear that even at the beginning of 1927, Ernest
Oppenheimer, though playing for high stakes, did so in the knowledge
that he held an exceedingly good hand.
He
had begun by explaining the Alexander Bay situation to the De Beers
board in Kimberley, and it was already evident that he was in a
fighting mood. On Saturday, 7 April, the secretary De Beers, Kimberley,
wrote to the secretary of the London transfer office
a
telephonic message was received from Sir Ernest Oppenheimer about 10
o'clock with reference to Port Nolloth diamonds, saying that he had
bought the Merensky diamonds, that they were worth .£12 105. od. per
carat, and that 300,000 carats of such diamonds had been proved. Sir
Ernest stated that he had an option, which expired at 12 o'clock that
day, to purchase
