I98 SIR ERNEST OPPENHEIMER
and
the Government to have the right to 'put' 100,000 carats immediately.
This offer was coupled with the condition that Government would release
for export 240,000 carats of Merensky diamonds at the rate of 10,000
carats a month, but 'if
we are required by the Government to take immediate delivery of
100,000 carats, the Government shall simultaneously release to the
association for export 100,000 carats of the latter's diamonds'.
Government refused to couple the two sets of transactions.11
On 13 February 1929, however, as the result of stiff bargaining, Ernest
Oppenheimer signed an agreement with the Government for the purchase
of three parcels valued at approximately £562,000 each, or £1,750,000
in all: the first parcel to be composed of 45,720 carats inspected and
valued by the Syndicate; one of the conditions being that 'the
Government to be at liberty to set aside out of the said two subsequent
parcels such diamonds for cutting purposes in the Union as in its
discretion it may deem fit. . .'. Another condition was that the
Syndicate, in spite of these very large commitments, undertook not to
reduce prices to De Beers for any diamonds bought from it in the second
half of 1929 and to guarantee to buy, during the same period, a minimum
of £3 million from the producers as a whole.
No
consistent policy in regard to the Alexander Bay diamonds ever
eventuated, though 'Merensky diamonds' were released from time to time.
At the time of the collapse of the international diamond market as a
result of the international economic crisis in the early thirties, a
substantial unsold balance remained.
The
final technical problem which occupied Ernest Oppenheimer during this
period was the question of how to supply diamond cutters in South
Africa with the stones they required. There was no disposition on his
part to question the desirability of establishing such an industry: the
establishment of the Kimberley Diamond Cutting Company proved the
contrary. But there was a danger of the European diamond industry
being adversely affected by too generous a policy towards the South
African cutters, and of consequential damage being done to the
producers, whose contribution to South African economic life and to
government revenues was very considerable.
Ernest Oppenheimer addressed two communications to the Minister
11 In
the light of the situation discussed in the succeeding section, it is
important to note that the terms of the offer of 17 November, 1928
though 'made in the name of the Diamond Syndicate', had been
communicated to the 'big four' producers and 'negotiations with them
are now proceeding which, if they are satisfactorily concluded will
result in their taking a 50 per cent interest in this offer to the
Government'.
