♦ XIII ♦
The
conference of 26 January did not produce immediate agreement: it only
resulted, for the time being, in a stream of proposals and
counterproposals, embodied in memoranda and letters and in a new
series of conversations.
It
was, of course, perfectly natural that the Union Government should try
to obtain as large a share of the diamond industry for the Union as it
could. Nevertheless, the ultimate determining factors in this respect
lay outside its control. It could not force the outside
producers to sell to the Diamond Corporation: the ever-present danger
was that of a 'break-away' and of the destruction of the structure
which had been built up with so much effort. The Government could, of
course, insist, if it desired to do so, upon the redistribution of
quotas inside the Union and South West Africa; further, so long as the
Diamond Corporation existed as a South African company, Government
could restrict its profit-earning capacity and its right to dispose of
its accumulated stocks; but these stocks did not thereby disappear. It
obviously could not control the world market, the ebb and flow of
demand. The obvious solution lay in appreciating the quite
revolutionary significance of the rise in the world demand for
industrials and the maintenance, at a quite unanticipated level, of the
demand for gem stones (in fact by utilizing some of these for
industrial purposes the whole problem of disposal was made easier).
Coupled with this was the circumstance that no harm was inflicted on
the South African economy by cessation of production at Kimberley,
since the stocks of the Diamond Corporation, and, so long as they
lasted, of De Beers, could be drawn on, to the immense
strengthening of the industry as a whole; for the exhaustion of stocks
implied that a continuance of demand in the future would necessarily
imply current production to meet it. The task which lay before Ernest
Oppenheimcr and his colleagues was to convince the Government of the
necessity and of the expediency of utilizing these changes in the
circumstances to alter radically the terms of the diamond producers'
agreement, while maintaining the general principle of unified direction.
The
preceding pages will have shown the direction in which Ernest
Oppenheimer's mind had been moving. Separation of gem stones from
industrials, and the proper organization of the machinery of sale;
maintaining the friendship of the outside producers by giving
