THE WAR YEARS AND AFTER 351
of quotas, the choice be left open between a
transfer from the Diamond Corporation to die South African producers,
or a transfer from the producers to the Diamond Corporation.
In view of war demands, the sale of gem and industrial diamonds is to be considered separately for the duration of the war.
After
absorbing available supplies of industrials from the Union and South
West producers, the Diamond Corporation to be permitted to sell,
through the Diamond Trading Company, all industrial goods required by
the Allied powers during the war period.
It
is anticipated that this would leave gem goods to be absorbed from
Angola and Sierra Leone (50 per cent of production), the remainder of
the outside producers supplying industrial only. It is estimated that
about 15 per cent of the total volume of trade in gem diamonds will
satisfy the Diamond Corporation for any gem goods to be purchased from
the outside producers. The percentage stated is in the nature of a
guess and should not be regarded as an exact figure.
If
present volume of trade maintained, it is expected that, after the end
of the current year, De Beers and Consolidated company will be unable
to meet their quota obligations from their own stocks. They should
therefore be allowed, either to buy diamonds from the corporation or,
alternatively, sell their quotas to it.
After
meeting interest on outstanding debentures, cost of purchases of
outside goods, overhead charges and taxation, the Diamond Corporation
to agree that surplus cash to be applied to redemption of debentures.
Bound
up with all the foregoing is the question of taxation, on which some
equitable arrangement, satisfactory to all concerned, must be arrived
at.
The
fundamental aim of above arrangements is to eliminate the minimum
provisions in the outside contracts, thus doing away with the necessity
of preferential treatment being accorded Dicorp for deliveries under
outside contracts.
The memorandum also dealt with the post-war situation.27
27
'Firm contract to be made to open one of the De Beers mines in
Kimberley as soon as hostilities cease. Before doing so, the Minister
of Mines and chairman of De Beers must meet and agree that there is a
reasonable possibility of sales of diamonds reaching £750,000 during
the ensuing twelve months. After the end of war, should a difference of
opinion arise between the Minister of Mines and the chairman of De
Beers regarding possibility of the volume of sales being attained, then
the matter would be referred to the Prime Minister of the Union for
decision. The decision of the Minister of Mines regarding actual date
of termination of the war for the purpose in view would be taken as
final.
'A
further firm contract is to be made as soon as the war ceased in the
manner indicated and in the preceding paragraph, by which De Beers will
arrange that the Jagersfontein and Premier mines will be re-equipped
immediately and thereafter reopened and worked continuously. It was
decided in this connexion that the Minister of Mines and chairman
