♦ I ♦
THE immediate problem with
wliich Ernest Oppenheimer had to deal, both in his new capacity as
chairman of De Beers and as the South African representative of the
Diamond Syndicate (later as chairman of the Diamond Corporation) was
the negotiation of new agreements between the conference producers—the
'big four'—and the negotiation of a new sales agreement between them
and the Syndicate—the old contracts were due to expire at the end of
1930. Even had conditions been normal, this would have been a more
difficult task than it had been on previous occasions. The Union
Government possessed important powers of intervention; it was itself a
producer and, as such, could affect the diamond market by its sales
policy; it had also taken upon itself the 'protection' of the South
African diamond-cutting industry. Though not the owner of the
'Merensky' diamonds, it had assumed power to control the disposal of
such diamonds by their owners. Finally, it had created, at the end of
1929, an advisory body, the 'Diamond Control Advisory Committee'.1 One
of the members of that committee was P. Ross Frames, whose attitude was
not always friendly. If there were a lack of good will, there might be
intolerable delays and even the risk of complete breakdown; but even
given good will, administrative delays might complicate the situation.
And
the situation was very far from being normal. The diamond industry had
been exposed to trade depressions before; it had evolved a technique of
not forcing the market, resisting price reductions and reducing output
for dealing with them. It knew that trade recession in the United
States of America would affect its position, but that, given patience,
equilibrium would be restored. But the crisis wliich developed at the
end of 1929 and which deepened in subsequent years differed in degree,
in kind, and in direction from previous crises. The
1
Ernest Oppenheimer had first heard mention of this body in September
1929, at a meeting with the Secretary to the Treasury, and regarded it
with great suspicion: 'the appointment of such a board would be one of
the greatest hardhips for the producers', he noted on 11 September
1929, 'and everything should be done to prevent it'. However, on 30
December 1929 he wrote to the secretary of De Beers that he had again
seen Mr. Farrer, who told him 'that the so-called Diamond Control Board
would be appointed as from I January; that it really is purely an
advisory committee and that the title "control board" was a misnomer....
I threw out the hint to Farrer that, if the idea of an advisory
committee was not conceived in a spirit of antagonism to the industry,
it might be much more sensible to ask the producers, both mines and
alluvial, to appoint an additional member to the advisory committee.'
