FROM CRISIS TO CHAIRMANSHIP OF DE BEERS 193
decision
to create a State diggings: the advent of Government-produced diamonds
made it easier, if the Government thought fit, to pursue a preferential
policy towards the new enterprise.
This was not the only aspect of the new venture to cause resentment.8 As
early as 1924 De Beers had expressed the view that, if a
diamond-cutting industry were to be set up, it should be a
Government-owned enterprise, in order to avoid many difficulties. When
the contract came up for discussion in the Assembly in the summer of
1928, it was referred to the Select Committee on Public Accounts. Sir
David Harris, who on this occasion assumed the role of principal expert
speaker in the Assembly (Ernest Oppenheimer being in Europe), also
appeared before the select committee, and on 19 April 1928 made an
important pronouncement there on behalf of the Diamond Syndicate:
I
am not opposed to the industry being established, but I am opposed to
De Beers starting it. We produce the rough diamonds and we sell them to
the Syndicate and they pay cash. I have always held that the people who
should start the cutting industry on a decent scale is the Syndicate
because they are in a better position to do it. I have been trying to
induce the Syndicate, being a South African, to start the industry and
at last I have succeeded. They are prepared to start without a subsidy
at all. On 30 March last I received a cable from them containing terms
and proposals on which it is prepared to establish a cutting and
polishing industry in South Africa.
This
statement of Sir David Harris was a httle fanciful: as a matter of fact
on 24 March 1928 the following cable had been sent to him signed by
Solly Joel and Ernest Oppenheimer.
Understand
diamond-cutting agreement referred to select committee. What is your
opinion result? If necessary think we should do something ourselves
without subsidy in order to destroy agreement which, if allowed as
provided by clause II, would be serious danger whole trade. Advisable
you should confer confidentially Smuts.
In
the detailed offer which followed, it was specifically provided that
'Sir Ernest Oppenheimer would make all the necessary arrangements
8
For a slashing attack reference may be made to the speech delivered by
Sir David Harris at the thirty-ninth annual general meeting of De Beers
on 9 December 1927, Annual Report for 1927, pp. 31-2. As early
as 1919, De Beers had decided, as Sir David Harris pointed out, quoting
from his own speech in that year, to erect a cutting factory containing
ioo mills, to 'be let to approved persons on very reasonable terms to
encourage them to cut and polish diamonds. . . . Eight years have
elapsed since that proposal was made, and during the whole of that
period we did not receive one application for the hiring of mills.'
