exchange of views had to be by letter as
we had reason to believe that the Mines Department saw all our cables.
He assured me he never read them but would not say that under present
conditions he could not get copies.
He agreed then that it was early enough if the conference were held in Cape Town early in the New Year.
I have forgotten to mention that he admitted he had no organization for dealing in diamonds, while we were properly established.
I
then told him that I could not express any opinions on the points he
had raised, but asked whether I could ask him a few questions.
As
regards his first point 'outside producers' I asked whether he wanted
me to induce the outside producers to sell us fewer diamonds. No, he
replied, that would be still worse, because then they would hold a
stock of diamonds which would be a potential source of danger to the
Union producers. I told him that Kotze held the same view. Then have
you any suggestion to make how to deal with this problem I asked him,
and he admitted he had no solution to offer.
I
then passed on to Dicorp and tried—quite unsuccessfully—to explain to
him that Dicorp only made a book profit (in diamonds) out of the
outside contracts, and that we actually had to pay income tax in cash on
the diamonds accumulated. He replied that he could not follow my
argument, that Dicorp made colossal profits to the detriment of the
Union producers.
I
tried all sorts of illustrations, but could make no impression, so I
dropped this subject and asked him whether he thought we were
completely satisfied with every clause in the agreement? I told him
that there were quite a number of points, but that we felt that it was
wrong to put forward any amendment during the war. Particularly not, as
on the whole the present system worked very well: that the Government
by deliveries and through taxation, income tax, excess tax and export
tax had a greater revenue than it could have expected, that the
producers did well and could resume deferred dividends, that we had
helped (chiefly by having the outside contracts) to supply industrial
diamonds to England, America and Russia. He admitted all this but
reiterated that he was anxious to come to a new agreement, but must
have concessions.
He
then asked me to give him some idea of our grievances. In reply I
explained that our grievances were both in the agreement, but
especially as regards certain matters in running the business. I
reminded him that for instance when the producers arranged to pay
Dicorp a contribution towards the debenture service as a quid pro quo, the
Government not only refused to pay its proportionate share but would
not even permit the Premier company to pay except out of the
shareholders' profit or funds. His reply was that this wras before his time. . . .
