Mine,
partly for cash and partly in deferred shares; secondly, for the
purchase by De Beers from the Anglo American Corporation, partly for
cash and partly in deferred shares, of 1,324,600 preferred shares and
of 1,324,600 deferred shares in the Consohdated Diamond Mines of South
West Africa. In both cases, the cash payments were to be spread over a
period of five years. Thirdly, it was proposed that the Diamond
Corporation acquire 200,000 shares in the Cape Coast Exploration
Company from Barnatos and Anglo American Corporation, payment again to
be spread over five years.
So
much for the 'rationalization' (it was the contemporary fashionable
phrase) of the productive side of the industry. On the trading side, it
was proposed, first, that the Diamond Corporation should acquire on 31
December 1930 the Syndicate stock of diamonds, payable in debentures to
an amount of .£3,500,000. Secondly, as from 1 January 1931, the
Syndicate was to cede to the Diamond Corporation the contracts with the
conference producers. Thirdly, Dunkelsbuhler and Company and Barnato
Brothers were to act as agents for the Diamond Corporation until the
end of 1934. If, at that time, the agency arrangements were not
renewed, the 'producers' were to take over the shareholdings of the
agency firms in the Diamond Corporation. The capital of the Diamond
Corporation was to be doubled and De Beers was to appoint the chairman,
who was to have a casting vote. In effect, it was to be a 3-tier
arrangement: control of production by De Beers, control of diamond
purchases by the Diamond Corporation, and technical sales arrangements
by two member firms of the old Syndicate.
Partly
because certain directors felt that they were being 'rushed' and partly
because of doubts as to the method of financing, the reorganization
scheme was held up. On 8 October 1930, at a board meeting of De Beers,
when Ernest Oppenheimer was in the chair, he addressed his colleagues
at length:
...
I should like to explain to my colleagues the whole position. I read
the remarks made by Mr. Stow at a meeting of the board held on 16 July,
in the course of which he said that, before considering the matter on
its merits, he wished to protest strongly against the manner in which
it had been put before the board. The position was that, prior to my
leaving for England, Mr. Hirschhorn on several occasions discussed with
me both the Diamond Syndicate position and also the question of the
Consolidated Diamond Mines company, because we knew then that Mr. Joel
was seriously ill and that it was of great importance that Messrs.
Barnato Brothers' money should remain available for the diamond
business. . . .When I got to London I
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