one channel, and that the fullest co-operation exists between the Government and ourselves must inevitably lead to disaster.
It
is my duty as chairman of De Beers, and as a man keenly interested in
the welfare of this country, solemnly to warn you that a great national
industry is in imminent danger of complete collapse.
To this letter he received a reply (dated 3 February 1932) to the effect that:
I
do not appreciate the purport of this letter and I must ask you kindly
to be more explicit and if you have any complaint under the three
headings mentioned by you, to state clearly what is undermining the
confidence that you speak of.
Sir Ernest answered on the following day:
I
must thank you for your letter of yesterday's date, in which you ask me
to be more explicit than in my letter to you of the ist instant and
state clearly any complaint which I wish to make as regards the
undermining of confidence in the diamond industry.
I have no hesitation in reiterating that a great national industry is in imminent danger of collapse for the following causes:
(1)
Confidence in the efficient control of production has been rudely
shattered by rumours which have appeared in die Press, and which have
as yet not been officially denied, to the effect that the Government
intends to throw open further farms in Namaqualand for prospecting. In
addition, in a recent interview we had with the Government Diamond
Valuator, he stated definitely that in times such as these, the
intention of the Government was to increase materially its production
from State diggings by an immediate increase in their staff and that
they had plans ready by which at no distant date they would be able to
erect a plant capable of vastly increasing their production.
Now
I feel that you must be the first to realize how deeply all this must
alarm anyone who is vitally interested in the diamond industry and who
realizes that the only method of bringing back the prosperity of that
industry is to ensure that production does not exceed demand. The only
reason why uncontrolled alluvial production in the past has not led to
complete destruction of the trade is that then the old Syndicate was
able to employ its resources in buying up such production, which is one
of the causes of the large stock of the alluvial diamonds from
Lichtenburg and Namaqualand held by the corporation. As you yourself
must know the Diamond Corporation has no longer any resources with
which further to protect the trade in this manner.
(2)
It appears from our recent interview with the Government Diamond
Valuator that in order to assist South African cutters the Government
will not hesitate to violate that fundamental and essential principle
of the diamond
