The
Minister foreshadowed a policy of 'conciliating the diggers' by opening
up of new ground, and of helping to solve the 'poor white' problem by
limiting the number of Natives to be employed. It was expected that
this 'white labour' policy would be apphed, not to the older areas, but
to Namaqualand, where also the experiment of a State-run diamond
enterprise was to be attempted. These two policies were duly
implemented: they naturally impinged on the position of private
enterprise. The labour policy not only affected working costs, but the
adoption of such a policy enabled Government to attach conditions to
the grant of rights to operate, wliilc the inauguration of State mining
in Namaqualand (officially embodied in Proclamation No. 58 of 16 March
1928) brought into existence a producer not a party to any agreement
limiting output and not under any obligation to sell the output through
the Syndicate. But, perhaps equally dangerous was the proposal to
pursue the policy of'conciliation' by opening up new ground, i.e.
proclaiming new fields. Ernest Oppenheimer always, and rightly,
insisted that the easiest method ot dealing with temporary
over-production so far as alluvial diamonds were concerned, was to
delay, or altogether stop, the proclamation of new fields and the
Government had power to do this under the Act of 1927. It was
administrative discretion, and not the legal position, which threatened
disequilibrium.
The
dangers attaching to possible independent action by Government were
rendered all the more pressing in the light of the known desire of the
Government to encourage a diamond-cutting industry in South Africa.
Ernest Oppenheimer had already protested against the provisions of the
1926 Diamond Cutting Bill (finally passed as Act No. 2 of 1927), which
required the producer to sell single stones to cutters: the entry of
Government into the producing field aggravated the situation in this
respect also, since it was in September 1927 that a contract was
finally entered into with an Antwerp firm for the construction of a
diamond-cutting factory at Kimberley, the concessionaries being given
subsidies for training apprentices and a substantial reduction in the
export duties on certain grades of diamonds, as well as other
privileges. The contract included a clause (no. 8) to the effect that
'the Government may in its discretion take such necessary steps to
ensure an adequate supply of diamonds of such class, quality and
description as may be required for the factory's operations at prices
not in excess of those at which such diamonds shall be sold by the
vendors to other purchasers'. Clearly this clause was drafted before the
