of
Mines and it came as a great shock to Ernest Oppenheimer in August 1930
to be accused of misrepresenting the facts. A very sharp letter6 was sent to the Minister on 13 August, referring to previous correspondence, and ending:
In
conclusion, having a full appreciation of my responsibilities to the
diamond industry, I should be failing of my duty if I did not take this
opportunity to place on record my opinion that the diamond trade is now
in a highly unsatisfactory condition from which it can be extricated
only by prompt and wise action on the part of everyone concerned in the
control of the industry. . . .
The Department of Mines, however, refused to accept the explanations furnished.
This
attitude of suspicion obviously did not make it easier to arrive at an
agreement on the technical problem of arranging a ratio between sales
of 'outside' goods and of 'conference' goods, though 'outside' goods
included, for the purposes of the agreements, 'all diamonds,
from whatever sources obtained and whether from inside or outside the
Union of South Africa, other than conference producers' diamonds'.
6'.
. . My letter of 21 May also stated, for the information of the
Honourable the Minister of Mines, that the producers operating in the
Belgian Congo and Angola, for political reasons, objected to the
inclusion of references to limitation of output in sales agreements
made in London, but that in practice they had loyally adhered to the
policy of limitation and that there was no reason to believe that their
co-operation in this essential factor would at any time be withheld.
'In
view of the foregoing, I desire emphatically to repudiate the statement
made in paragraph 2 of page 2 of your letter now acknowledged that Mr.
Hirschhorn and I misrepresented the facts when advising the Honourable
the Minister of Mines of the position in regard to the disposal of the
diamonds produced from extra-Union sources; furthermore, in view of the
fact that, as before stated, the relative agreements have been in the
hands of the Honourable the Minister of Mines for a considerable
period, and that I have fully advised him of the general position in
this connexion, I fail to understand why the question as to whether the
Congo and Angola agreements do or do not effectively control the sale
of diamonds produced in the territories concerned is only now raised. I
would, however, direct the attention of the Honourable the Minister of
Mines to clause (xi) of the 'Forminierc' agreement, which clause
prohibits the sale of diamonds to any firm or company other than the
Syndicate, except as provided in the agreement; as there is no
provision in the agreement for sales elsewhere than through the
Syndicate, it follows that Forminierc can sell to the Syndicate only.
In practice the effect of the conÂtract is to control and limit both
sales and production.
'Clause
3 of the Angola contract gives the Syndicate the right to buy all
diamonds produced by the company in excess of those to be delivered in
satisfaction of the firm sales prescribed by the contract. This was the
clause I had particularly in mind when advising the Honourable the
Minister that the Congo and Angola producers, for political reasons,
objected to limitation of production being definitely prescribed by an
agreement contracted with parties domiciled in London. The clause docs,
however, provide that diamonds produced in excess of the agreed amounts
must be offered to the Syndicate, the effect of which is to place the
Syndicate in a position to prevent the Angola company disposing of
diamonds outside the Syndicate. . . .'
