must
do it step by step. The separation of the business into an industrial
and jewellery branch will find ready acceptance. I am working at a memo
on this point and the more I study it the more convinced I am that this
is the right course.
Harry Oppenheimer was not convinced,10
and this specific suggestion bore no immediate fruit: it was to come up
again in later negotiations. But in the framing of the 1943 agreement,
the position of industrials was to play a considerable role, when the
question of the Diamond Corporation's quotas came to be considered.
He
was, about this time, critical of the attitude of the British
authorities and critical also of the manner in which the London
directors of De Beers and even his brothers, Louis and Otto, were
handling affairs. At first he was acquiescent: in October he was
writing: 'Government interference in our selling arrangements is
growing in England. I have no complaints to make because clearly dollar
exchange is of outstanding importance and I can also understand that
England does not want diamonds used for hoarding.' But a little later
on, on 16 November 1941, he was writing,
It
is quite clear that London has made a mess of it all; not only do we
get no credit for our policy of selling at pre-war rates, but [certain
firms] have the ear of the authorities and keep on making continuous
demands such as picking our goods and leaving us with the unsaleable
portion. The Russian experience, i.e. [the selling firms] submitted
parcels to the Board of Trade which we inspected and found that they
make 100 per cent profit on their purchases. Our promise was to the
British Government and not to dealers.
As
to the attitude towards gem stones, he was writing in June 1942, in the
course of a long and deeply interesting commentary on the actual and
future position,
...
I have come to this: if the British Government were to say to me, 'for
war purposes black is white', I would say to myself it sounds illogical
but they know better. The British Government's action in restricting
the cutting industry in England in order to prevent hoarding comes [to
my mind] under the above category. The Diamond Corporation has jT 18,000,000
of diamonds in England; what difference could it possibly make to the
war effort if some other Englishmen held these diamonds instead of
ourselves? The purchasers would have the diamonds and we would have the
cash, instead of the reverse position. We are more likely to put the
money into
10
'You do not like the idea of a separate Industrial Diamond Corporation
nor an Industrial Trading Company and I am not going to rush this
matter. I only suggested a separate company because it helps the tax
position.' (Ernest Oppenheimer to Harry Oppenheimer, 11 January 1942.)
