settled
without the assent of the Union Government, which possessed wide powers
of veto and control, partly through the terms of the diamond producers'
agreement and partly by virtue of the terms of the Diamond Control Act
of 1925.
♦ IV ♦
During
the years 1941 and 1942, Harry Oppenheimer, the present head of Anglo
American Corporation and De Beers, was absent from Johannesburg on
active service. He was written to regularly by his father, who kept
copies of all the letters that he sent. It is therefore possible to
follow the working of his mind during these critical years, not only
from his official correspondence and the memoranda that he drafted, but
from this intimate and uninhibited correspondence. These years happen
to coincide with long and intricate negotiations with the Union
Government on the revision of the diamond producers' agreement, but it
is better to separate the course of Ernest Oppen-heimer's reflections
on the situation generally from the detailed story of the negotiations,
though the final shape given to the agreement and to the structure of
the industry was, of course, influenced by the attitude of Government
as well as by his ideas of what it was best to do.
It
was in connexion with the stock position that he first outlined a
tentative plan for reorganization. 'One thing is definite', he wrote to
his son on 16 November 1941, 'we must not open a mine during the war,
but use up the Diamond Corporation (Dicorp) stock', though the tax
problem was a very difficult one. The suggestion had been made to him
to liquidate the Diamond Corporation altogether and sell its stock to
De Beers, but there was still the question of what to do with the
outstanding debentures of the Diamond Corporation.
I
said . . . that I have no solution, but I have some ideas which I shall
now explain to you. First, I am convinced that the time has arrived to
separate the industrial diamond business from the jewellery part. This
would necessitate the formation of a separate 'Industrial Diamond
Corporation' to which Dicorp would transfer its industrial stocks plus
the B.C.K. agreement and also the Sierra Leone Coast agreement. Then in
turn a separate 'Industrial Diamond Trading Company' would have to be
formed. ... I must impress on you that I have not mentioned my ideas to anyone and that I do not propose to discuss them until I am absolutely clear in my mind. When the time comes I
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