(Closing
down did not, of course, imply a complete cessation of expenditure,
since the mines, or at any rate the deep-level mines, would have to be
maintained in an efficient condition, otherwise the main De Beers asset
would simply be destroyed.)
This
was the fundamental suggestion. On the financial side, he suggested
that De Beers should discount bills already drawn on the Diamond
Corporation by certain of the mines, partly to help the Diamond
Corporation, partly to avoid difficulties with the banks; '. . . the De
Beers company would then be discounting £420,000 of bills and the
amount available, as shown in the calculation of De Beers resources,
would enable them to do that even if the Diamond Corporation could not
meet any of its bills for two years, which I submit must be considered
undue pessimism'. The financial objective should be that 'no cash
payment need be made by Dicorp before 1 July 1932'. In other words,
there was to be a moratorium for a period of twelve months.10
He further suggested that:
.
. . De Beers on behalf of the conference producers approach the diamond
producers outside the Union with whom Dicorp has contracts with a view
to arranging that no producer, neither conference nor outside, shall deliver any diamonds to Dicorp for the six months July-December 1931, on
condition that the quotas thus held back be added to the ordinary
quotas during the next three years in the proportion of say one-fifth
in the first year, and two-fifths in the second and third years. . . .
He naturally suggested that there should be a quid pro quo. The Diamond Corporation should not further reduce prices:
...
As a return for the assistance the conference producers, and
particularly De Beers, extend to Dicorp we should stipulate that Dicorp
will, in selling, adhere to prices which will substantially maintain
the prices fixed in January.
