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SIR ERNEST OPPENHEIMER
The indirect effects
of the depression and of the monetary disorganization were equally
serious. South Africa felt the full impact of falling raw material
prices, aggravated, so long as the country remained on the gold
standard, by the lower yield of exports in terms of South African
pounds. Inevitably, the employment situation generally was unfavourably
affected, and, with the fall in the money value of the national income,
the public revenues were also adversely affected. Such a situation
would, of course, predispose Government to be intensely critical of any
proposal likely to increase unemployment still further, and to incline
it favourably towards policies, such as the proclamation of new
diggings, which, though they might aggravate the position of the older
producers, staved off the clamour of indigent diggers. These were the
social and political factors which require to be taken into
consideration in judging the Government's attitude towards the
situation which was speedily to develop.
The
advice which was tendered from London—that is, to take steps towards
the restriction of output—was, of course, in accord with traditional
practice in times of depression and was entirely consistent with Ernest
Oppenheimer's own line of thought. In fact, in March 1931 De Beers had
already requested Government to sanction a reduction in the working
week from six days to five. In May of that year, Alpheus Williams, the
general manager of De Beers, according to Ernest Oppenheimer's speech
in the House of Assembly on 2 March 1932,
saw
Dr. Pirow, the Government Mining Engineer, in Cape Town . . . and told
him that in view of the continued depression in the diamond market, De
Beers would be forced, in terms of the contract, to give six months'
notice of their intention to close down at the end of December. Mr.
Williams reported to me that the Government Mining Engineer
particularly requested that such notice should not be given. He said
that it 'would upset the country and the men' and cause the 'greatest
inconvenience to the Government' and that if notices were not given,
and it was nevertheless found essential later to close down, the most
sympathetic consideration would be given to our representations.
Ernest
Oppenheimer now (June 1931) commenced a scries of discussions with the
Government and with his own colleagues. On both sides discussion of the
direct problem of restricting output widened: it was not possible for
the Government to avoid bringing in the question of the relative sales
of conference goods and outside goods, and it was impossible for Ernest
Oppenheimer to dissociate the position
