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WORLD CRISIS AND WORLD LEADERSHIP
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231
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American Corporation, to proceed with the internal reorganization
of the South African diamond industry. The result was the circulation
of a memorandum dated 8 January 1931, entitled 'Administrative
organization of De Beers Consolidated Mines Limited'. The memorandum
argued that too much authority was vested in the general manager, so
much so that at times officials had refused to disclose information to
the directors and even the chairman, 'unless and until authorized to do
so by the general manager'. The memorandum continued:
Even
if attention is confined to the mining interests it will be seen that
they consist, first, of a large number of properties, including three
big operating mines, owned in freehold or in leasehold by the De Beers
company, and, secondly, controlling shareholdings in four important
diamond-mining companies, namely, Premier, C.D.M., Jagers and Cape
Coast. Notwithstanding that the holdings in the latter companies may
confer control, the fact remains that these companies are actually
independent entities whose affairs must be administered through their
respective boards. Furthermore, the position of the De Beers company vis-a-vis those companies is totally different from its position vis-a-vis the
properties of which it is the sole proprietor, in that in the case of
the Premier company the position of the Government as partners must be
recognized and in the case of the C.D.M., Jagers and Cape Coast that of
the outside shareholders. In these circumstances it is both
impracticable and in the highest degree inadvisable that the
management of the De Beers mines and the independent mining companies
should be vested in one general manager or in one organization.
The
foregoing reasons provide ample justification for reviewing the whole
system of the De Beers administration, in fact they make it imperative
that this should be done.
With
the acquisition of the controlling shareholdings referred to, the De
Beers company will, in mining affairs, become comparable to the Rand
gold-mining groups, in that it will be responsible for the
administration of a number of mining enterprises distinct from one
another in many of their characteristics and with different
shareholders and yet having many interests in common.
The
Rand groups have found that the solution of this problem lies in the
consulting engineer's system, the efficiency of which forms the subject
of favourable comment by every engineer who visits the Rand, and the
fact that it is employed by all the groups without exception affords
further testimony as to its excellence.
It
is, therefore, proposed that the De Beers company should establish a
consulting engineer's department. Briefly, the function of that
department
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