THE WAR YEARS AND AFTER 375
of
a policy long pursued by Ernest Oppenheimer, though this particular
transaction took place after his death. It had been his policy to
acquire interests in the West African, Congo and Angola companies and
it has already been recorded what importance he attached to the B.C.K.
company. When the Anglo American Investment Trust was formed,
investments in these outside companies were transferred to it, but in
1952 it was decided that it was 'considered desirable in the interests
of the diamond industry as a whole for the Diamond Corporation to have
a direct and permanent interest by way of shareholdings in the
non-Union producers', and therefore a transfer of shares in the
C.A.S.T., Angola and Beceka companies was effected by way of a transfer
of shares, the Investment Trust acquiring 2,500,000 shares in the
Diamond Corporation in exchange.48
♦ XXIV ♦
In
the earlier part of the post-war period, until the devaluation in
September 1949, the pound sterling was clearly overvalued in terms of
the dollar, the ruling exchange rate being £1 = $4.03. This fact,
coupled with drastic foreign exchange control by the Bank of England,
meant the emergence of 'black' and of 'grey' markets in sterling, and
it led to marked differences between the official value of sterling and
the 'free' rates ruling in such markets. The result was the
disorganization of the diamond market49 which in turn affected the competitive posi-
48 Directors'
report of the Anglo American Investment Trust for 1952. In the
chairman's report for the same year, it was also stated that:
'During
the year, with a view to further strengthening the link between Union
and non-Union producing companies, and following the principle adopted
when the latter acquired share interests in the industrial selling
companies, arrangements were made whereby the principal non-Union
producers have acquired direct share interests in the Diamond Trading
Company Limited and the Diamond Purchasing and Trading Company Limited,
which companies handle the sale of all gem diamonds sold by the Diamond
Producers' Association.'
49 Reporting to his Government, the U.S. Consul at Antwerp was writing (U.S. Bureau of Mines, 28 Mineral Trade Notes, February 1949, pp. 31-4):
'On
18 October 1948, a large delegation from Belgium consisting of
representatives of the Antwerp Diamond Office, diamond clubs,
exchanges, manufacturers associations, and diamond labor unions, met in
London with officials of the Diamond Trading Co. Similar delegations
from the Netherlands and Palestine had been received previously.
'The
objective of the conference was to find effective means of eliminating
various forms of currency manipulations from the process of purchasing
rough diamonds. These practices have taken essentially four forms:
1.
Certain countries (France, for instance), under their foreign exchange
regulations, make it possible for their importers officially to
acquire, with dollars, pounds sterling at rates of exchange more
favourable than those obtained by other countries.
