Minister was neither prepared to allow a separate Industrial Diamond Corporation nor to regard the South African contracts as being terminated because of the cessation of hostilities, then:
I must consider myself free to form a separate company to purchase the outside industrials,
and a separate company to market them outside the scope of the Diamond
Producers' Association, and such companies might be formed jointly with
the outside producers. You will, I am sure, understand that only in
this way can I hope to continue to buy the outside industrials if the
present South African contracts are still in force.
So
far as gem diamonds were concerned, the only point at issue was the
size of the Diamond Corporation's quota, then fixed at 20 per cent.
Sales could go on through the Diamond Producers' Association 'so long
as a reasonable adjustment is made in the Diamond Corporation's gem
quota, for which provision is made in the existing South African
contracts'.
The
creation of a separate corporation to deal with outside industrial
diamonds would, obviously, have made it very difficult to maintain a
unity of sales policy between South African and outside production of
industrial stones; moreover, it would have implied a surrender of
principle which might have been fatal to the unity of the diamond world
as a whole. In the end, a compromise was reached. The Minister, to the
end, was successful in banning the idea of creating a special
industrial diamond corporation; nevertheless, a distinct selling
organization, Industrial Distributors (1946) Limited, was agreed to.35
On
16 April 1946, it was reported to the De Beers board that 'full
agreement had now been reached on all matters relative to the diamond
35 The minutes of the De Beers company for 27 November 1945 record the following:
'With
reference to the memorandum submitted by the chairman at the meeting of
the board held on 21 August 1945, Mr. Farrer reported that the chairman
and Mr. H. F. Oppenheimer had since then repeatedly seen the Minister.
The points on which agreement had been reached were that the existing
constitution agreement of the Diamond Producers' Association would be
continued, with modifications, for a further period of five years. The
control of industrial diamonds was to remain with the Diamond
Producers' Association, the proposal to set up a separate industrial
diamond corporation having been dropped. It had been agreed, however,
that a separate industrial diamond trading company would be set up.
'As
to the proposed guarantee of working expenses to the producers, the
Government would not participate but would stand by its quota even if
it fell below the amount of its working expenses. The guarantee
arrangement would operate between the Union and South West producers
and the Diamond Trading Company.
'The
industrial diamond trading company would be free to buy the crushing
bort produced by the B.C.K. company or the Congo but, with this
exception, the Trading Company would buy solely from the Diamond
Producers' Association.
'The central sorting office staff was to be taken over by the Diamond Producers' Association.'
