cannot
manufacture in this country, but with the stipulation that the
diamonds should in the first place be offered to the party from whom
they were purchased at the price which could be obtained from another
purchaser. On the whole it appeared to me that the Government was
sympathetic in its attitude and anxious to assist in overcoming the
difficulties with wrhich the industry is at present faced. I
am hopeful that, in the near future, we shall be in a position to
announce that some scheme of effective control of output and limitation
of sales has been devised in consultation and co-operation with the
Government. . . .
In
spite of the friendly atmosphere at the conference, as soon as the
Mines Department settled down to a detailed examination of the various
agreements, serious divergencies of opinion were revealed. The two
sides differed on the size of the aggregate quota; on the size
of the Government quota; on the question whether the Cape Coast Company
was to be given a quota at all; on the disposal of the Merensky
diamonds; on the method of controlling alluvial production (though they
agreed that some action would be necessary if alluvial
production exceeded ^3,000,000 a year); on the method of supplying
South African cutters with diamonds; on the amount of the provisional
price to be paid to producers (that is, the margin to be retained by
the Syndicate) and on the allocation of profits; on the question
whether there should be three- or six-monthly determination of the
volume of trade; on the length of time during which the agreements
should run, and on the question whether 'inferior diamonds' should, or
should not, be included in deliveries. As if these points of difference
were not enough, the Government added three new requirements, the
first, the right of the Government to 'appoint a representative in
London or South Africa, or both, with full powers to obtain
information as to transactions in diamonds from outside the Union as
well as from inside, examine books of the Syndicate and be present at
sales of diamonds coming from the Union'. Secondly, it required a
specific pledge that the members of the Syndicate should bejointly and
severally liable. Lastly, it demanded 'some ratio between the sales by
the Syndicate of conference producers' diamonds and their sales of
outside diamonds from the Union and South West Africa'. Moreover, as a
rider to this demand, an even more drastic claim was set up: the right
to 'suspend or terminate all sales agreements ... if the volume of
trade for the conference producers for any period of six months falls
below -£3,000,000 unless the Syndicate elects to take that amount from
the producers'. This, at a time when confidence was already
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