FROM CRISIS TO CHAIRMANSHIP OF DE BEERS 197
at
its own expense and risk with such government officer and at such place
as the Government may appoint. . . . Such diamonds or any part thereof
shall only be released for disposal...
at the absolute discretion of the GovernÂment and the value of any
diamonds disposed of without the written authority of the Government
shall be paid as liquidated damages to the Government.
The
only concession made to the association (it was, however, an important
one) was contained in paragraph 7 of the undertaking. The disposal of
the right of ownership to the diamonds was expressly reserved.
Nevertheless, even if disposed of, the diamonds remained on deposit
with the Government and 'no part of such diamonds shall be released for
export . . . except upon the written authority of the Minister of Mines and Industries . . .'. Ernest Oppenheimer mig ht, indeed,
acquire the diamonds, but, unless he also obtained an export quota, or
a sales quota, he ran the risk of indefinitely locking up capital. It
was not until 4 October 1928 that Ernest Oppenheimer was able to cable
Louis (then at sea en route for London):
Have
just received message from Acting Minister of Mines that at this
morning's cabinet meeting Government agreed to release 100,000 carats
H.M. Association diamonds and sell to us 100,000 carats Government
diamonds simultaneously.
He
had, in fact, scored a triple success. He had induced Government to
take a first step towards accepting the principle of co-operation and
sales through one channel, in other words, warding off the danger of an
independent sales policy by a new producer :10 he had
secured a first release of the Merensky diamonds and reduced the
financial risks connected with them; lastly, he thoroughly alarmed De
Beers, at any rate the Kimberley directors, and made them most anxious
to come to terms with him in regard to the future relations between the
Syndicate and the older producers—on this much more will be said later.
It might have been expected that the policy of dealing pari passu with
the Merensky diamonds and the State diamonds, once having been embarked
upon, would have been consistently followed. In fact, this was not the
case. In November 1928 Ernest Oppenheimer made an offer to Government
to purchase 360,000 carats from the State alluvial diggings at the rate
of 15,000 carats per month, payment to be in cash
10
On 15 October 1928 Ernest Oppenheimer cabled to the Diamond Syndicate,
London, that 'Government have verbally promised that they will not sell
any diamonds for considerable time and then through us'.
