WORLD CRISIS AND WORLD LEADERSHIP 301
it.
As one example of this I need only point out that no mention is made of
the Diamond Corporation accepting a quota in respect of its huge
accumulated stock.
Again,
on the subject of income tax, you will note that notwithstanding that
Mr. Frames admits that we are seeking the advice of 'eminent English
counsel' as to the liability, under the proposed scheme, for English
income tax, this does not restrain him from suggesting that the
formation of a 'bogus' company is contemplated.
However,
ignoring all this and the ridicule which he pours on the Union
Government for its attempt to reach a satisfactory solution of the
difficulties besetting a great national industry, I submit that his
most remarkable pronouncement is contained in clause XXII. Therein he
suggests that neither is it necessary nor is it advisable to do
anything at the present time and that the existing position
(unsatisfactory as it is admitted to be on all sides) should be allowed
to continue. This opinion is not attached to any criticism of the
scheme, but is based on vague generalities concerning matters with
which Mr. Frames was fully acquainted before he entered the conference
chamber. In short, Mr. Frames has expressed an opinion which he could
have formed, and no doubt had formed, before he attended the
conference or, in other words, he has made no attempt to consider the
scheme on its merits. In these circumstances it seems a very great pity
that Mr. Frames was present, as it has simply afforded him another
opportunity of revealing his hostility to the leaders of the industry
and of belittling, even of destroying, their efforts to protect it.
Although
I am naturally disturbed to learn of the attitude Mr. Frames has taken
up, it is unthinkable that the Government should attach weight to his
opinion in view of the evidence that he cannot bring unprejudiced
judgement to bear on the matter. I am, therefore, adhering to my plan
of leaving for Europe tomorrow to confer with my colleagues in
connexion with the scheme, while the De Beers company is proceeding
with the preparations for the reconstruction of its washing plant.
Almost
a month later the Diamond Board for South West Africa, by the casting
vote of its chairman, resolved that 'as the "heads of agreement" now
stand, they are not as a whole in the interest of South West Africa'.
The main 'points of contention' were defined as being:
(1) The small quota for South West Africa.
(2) The uncertainty of English income tax.
(3) The loss of control by the Administrator.
(4) The duration of the contract.
(5)
The quota of the outside producers for the Diamond Corporation
and the uncertainty of the attitude of these producers to the new
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