The Williamson Diamond Mine, De Beers, and the Colonial Office: a Case-Study of the Quest for Control

John Knight; Heather Stevenson

doi:10.1017/S0022278X00007102

The Williamson Diamond Mine, De Beers, and the Colonial Office: a Case-Study of the Quest for Control

Published online by Cambridge University Press: 11 November 2008

John Knight and

Heather Stevenson

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The diamond industry is perhaps the most successful commodity cartel of the twentieth century. It is not, and has not been since the turn of the century, a monopoly in production: De Beers has normally been the major, but by no means the only, producer. The cartel has been maintained by the system of ‘distribution through one channel’, the Central Selling Organisation (C.S.O.), a subsidiary of De Beers.

Type: Articles
Information: The Journal of Modern African Studies , Volume 24 , Issue 3 , September 1986 , pp. 423 - 445

DOI: https://doi.org/10.1017/S0022278X00007102 [Opens in a new window]
Copyright: Copyright © Cambridge University Press 1986

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References

^{Page 424 note 1} Chilvers, H. A., The Story of De Beers (London, 1939),Google ScholarGregory, Theodore, Ernest Oppenheimer and the Economic Development of South Africa (London, 1962),Google Scholar and Hocking, Anthony, Oppenheimer and Son (Johannesburg, 1973).Google Scholar

^{Page 424 note 2} Heidgen, Heinz, The Diamond Seeker, the Story of J. Williamson, translated by McHugh, I. and McHugh, F. (London, 1959),Google ScholarBurgess, P. H. E., Diamonds Unlimited (London, 1960),Google ScholarFourie, M., The Knave of Diamonds (Ilfracombe, 1961),Google Scholar and Gawaine, John (pseudonym), The Diamond Seeker (Johannesburg, 1976).Google Scholar

^{Page 424 note 3} Iliffe, John, A Modern History of Tanganyika (Cambridge, 1979).CrossRef Google Scholar

^{Page 424 note 4} An attempt was made at the highest level to secure the co-operation of De Beers, but it is company policy that relations with producers in the cartel remain confidential – even those of more than 30 years ago because, we were told, the events of the past have a habit of recurring.

^{Page 425 note 1} This brief account of the history of the cartel draws primarily on Gregory, op.cit. and Hocking, op.cit.

^{Page 426 note 1} Public Record Office, Colonial Office file 852/503/19; Diamond Control memorandum by Mathias, F. A., 20 May 1943.Google Scholar

^{Page 427 note 1} P.R.O., C.O. 853/503/19; Colonial Office memorandum by Caine, Sidney, 25 May 1943.Google Scholar

^{Page 427 note 2} Ibid. Colonial Office memorandum by Gerard Clausen, 22 June 1943.

^{Page 427 note 3} Ibid. Letter from Maynard Keynes, 9 July 1943.

^{Page 427 note 4} Ibid. Board of Trade memorandum, 3 September 1943.

^{Page 427 note 5} Gawaine, op. cit. p. 138.

^{Page 427 note 6} Williamson, John Thorburn, ‘The Williamson Diamond Mine, Tanganyika’, in Joelson, F. S. (ed.), East Africa and Rhodesia (London, 1958).Google Scholar

^{Page 427 note 7} Gawaine, op.cit. p. 141.

^{Page 428 note 1} P.R.O., C.O. 852/638/4; the Governor of Tanganyika, Sir Wilfred Jackson, 15 October 1944.Google Scholar

^{Page 428 note 2} In a letter from the Governor to Gerald Creasy in the Colonial Office, a rumour is referred to ‘that De Beers offered Williamson £3 million for his mine but that he refused. He is likely however to accept finally in my opinion.’ P.R.O., C.O. 852/638/4.

^{Page 428 note 3} Ibid. Telegram from Ernest Oppenheimer to the Diamond Corporation, 4 January 1945.

^{Page 428 note 4} Ibid. Governor's despatch, 20 September 1944.

^{Page 428 note 5} Ibid. 15 October 1944.

^{Page 428 note 6} There had been an interchange on the subject between London and Dar es Salaam in 1937.

^{Page 429 note 1} P.R.O., C.O. 852/638/4; Colonial Office memorandum, 20 October 1944.

^{Page 429 note 2} Ibid. The Secretary of State, Oliver Stanley to the Governor, 9 December 1944.

^{Page 429 note 3} Ibid. The Acting Governor to the Secretary of State, 19 April 1945.

^{Page 429 note 4} Ibid. The Colonial Secretary to the Governor, 18 June 1945.

^{Page 429 note 5} When C.A.S.T. applied for an exclusive prospecting licence in 1947, it was to cover all minerals except diamonds. P.R.O., C.O. 852/935/2.

^{Page 429 note 6} P.R.O., C.O. 852/638/5; ‘Memorandum of Agreement between the Governor of Tanganyika Territory and De Beers Consolidated Mines Ltd.’, February 1946.

^{Page 429 note 7} Gawaine, op.cit. p. 146, asserts that Harry Oppenheimer, when he visited Williamson, made an offer of £2 million for the mine.

^{Page 430 note 1} P.R.O., C.O. 852/638/5; letter from Williamson's solicitors to the Under-Secretary of State, 27 December 1945.

^{Page 430 note 2} Ibid. The Governor, Sir William Battershill, to the Colonial Secretary, G. H. Hall, 24 October 1945.

^{Page 430 note 3} Ibid. Colonial Office memorandum, 22 January 1946.

^{Page 430 note 4} For instance, Parliamentary Debates, House of Commons (London), 1946–1947, Vol. 430, pp. 209–10.Google Scholar

^{Page 430 note 5} P.R.O., C.O. 852/638/5; interchanges among Colonial Office civil servants, January to February 1946.

^{Page 430 note 6} Ibid. The Governor, Sir William Battershill, to the Secretary of State, G. H. Hall, 23 March 1946.

^{Page 430 note 7} Ibid. Report of the Chief Geologist, D. R. Grantham, 4 June 1946.

^{Page 431 note 1} Ibid. Letter from the Governor to the Permanent Secretary, Colonial Office, 17 June 1946.

^{Page 431 note 2} ‘Re Williamson Diamonds Ltd.’, Creech Jones Papers, Box 46, File 3, Rhodes House Library, Oxford.

^{Page 431 note 3} Gregory, op.cit. p. 373, quoting from the minutes of the De Beers Board, 20 June 1946.

^{Page 431 note 4} Letter from Ernest Oppenheimer to the Governor, 11 July 1952; Creech Jones Papers, Box 46, File 3.

^{Page 431 note 5} P.R.O., C.O. 852/638/5; the Governor to the Permanent Secretary, Colonial Office, 17 June 1946.

^{Page 432 note 1} Ibid. Note on interview with the Under-Secretary of State, Creech Jones, mid-1946.

^{Page 432 note 2} Ibid. Memorandum on negotiations with De Beers for a Special Exclusive Prospecting Licence, 17 October 1946.

^{Page 432 note 3} Ibid. Minutes of a meeting between Williamson and officials, 5 December 1946.

^{Page 432 note 4} Ibid. The Colonial Secretary to the Governor, 10 January 1947.

^{Page 432 note 5} Greg Lanning with Mueller, Marti, Africa Undermined: mining companies and the underdevelopment of Africa (Harmondsworth, 1979), p. 413.Google Scholar

^{Page 433 note 1} Epstein, Edward Jay, The Diamond Invention (London, 1982), p. 90.Google Scholar

^{Page 433 note 2} P.R.O., C.O. 852/638/5; statement by Mathias at a Colonial Office meeting, 4 December 1946.

^{Page 433 note 3} Epstein, op.cit. p. 90.

^{Page 433 note 4} ‘Memorandum on Colonial Mining Policy’, Circular Letter to Colonial Governments, 17 October 1946, Creech Jones Papers, Box 46, File 4.

^{Page 433 note 5} P.R.O., C.O. 852/638/5; Colonial Office memorandum by Monson, W. B. L., 8 October 1946.Google Scholar

^{Page 433 note 6} Ibid. Colonial Office memorandum by Creech Jones, 2 November 1946.

^{Page 433 note 7} P.R.O., C.O. 537/7197; note of a meeting between Colonial Office representatives and Chopra, 25 May 1951.Google Scholar

^{Page 433 note 8} Ibid. Personal letter from Creech Jones to Hilton Poynton, Permanent Secretary, Colonial Office, June 1951.

^{Page 433 note 9} P.R.O., C.O. 537/5879;the Governor to the Colonial Secretary, 29 May 1950.

^{Page 434 note 1} P.R.O., C.O. 537/7197; personal letter from Creech Jones to Poynton, Permanent Secretary, Colonial Office, June 1951.

^{Page 434 note 2} Parliamentary Debates, House of Commons, 1946–1947, Vol. 441, 29 07 1947, p. 281.Google Scholar

^{Page 434 note 3} Territory, Tanganyika, Department of Lands and Mines, Mines Division. Annual Report (Dares Salaam), 1947, p. 7.Google Scholar

^{Page 434 note 4} P.R.O., C.O. 537/5879; Consultant's, Mining Report No. 18, Mwadui Mine, January 1950.Google Scholar

^{Page 434 note 5} Ibid.

^{Page 434 note 6} The Barber formula, introduced around 1910, has been the normal method of valuation used by the C.S.O. – see Greenhalgh, Peter, West African Diamonds, 1919–1983: an economic history (Manchester, 1985).Google Scholar

^{Page 435 note 1} Source: Mines Division. Annual Report, various years. Figures for 1939–1944 and 1955–1958 are the quantity of diamonds exported from the whole of Tanganyika.Google Scholar

^{Page 435 note 2} P.R.O., C.O. 573/5879; the Governor, Sir Twining, Edward, to the Colonial Secretary, James Griffiths, 10 May 1950.Google Scholar

^{Page 436 note 1} P.R.O., C.O. 537/5879; Colonial Office memorandum by Burt, R. H., 12 April 1950.Google Scholar

^{Page 436 note 2} Ibid. Mining Consultant's Report No. 18, Mwadui Mine, January 1950.

^{Page 436 note 3} Ibid. The Governor to the Colonial Secretary, 10 May 1950.

^{Page 436 note 4} Gawaine, op.cit. p. 156.

^{Page 436 note 5} Mines Division. Annual Report, 1950, p. 5.

^{Page 436 note 6} P.R.O., C.O. 537/5879; Chopra to Williamson, 30 September 1950.

^{Page 436 note 7} Ibid. Williamson to Chopra, 3 October 1950.

^{Page 437 note 1} P.R.O., C.O. 537/7197; Scott, E. L. to Poynton, 17 April 1951.Google Scholar

^{Page 437 note 2} Ibid. W. A. Chapple, representing the Diamond Corporation, to Poynton, Permanent Secretary, Colonial Office, 15 May 1951.

^{Page 437 note 3} Ibid. Note of a meeting held between Colonial Office representatives and Chopra, 25 May 1951.

^{Page 437 note 4} Mines Division. Annual Report, 1949–1952. For the four years 1949–52, the ratio averaged 1.2 in terms of volume and 5.5 in terms of value.

^{Page 438 note 1} P.R.O., C.O. 537/7197; Hill, Board of Trade, to Andrew Chohen, Colonial Office, 24 January 1951.

^{Page 438 note 2} Ibid. Colonial Office memorandum from Scott to Poynton, 14 March 1951.

^{Page 438 note 3} Memorandum by Chopra on interview with Rogers, P. and Scott at the Colonial Office, 7 June 1951; Creech Jones Papers, Box 46, File 3.Google Scholar

^{Page 438 note 4} P.R.O., C.O. 537/7197; Colonial Office memorandum from Scott to Poynton, 17 April 1951.

^{Page 439 note 1} Memorandum by Chopra on interiew with Rogers and Scott at the Colonial Office, 7 June 1951.

^{Page 439 note 2} Epstein, op.cit. p. 247, based on an interview with Ronald Winston.

^{Page 439 note 3} P.R.O., C.O. 537/7197; Colonial Office memorandum by Burt, 20 April 1951. The Diamond Corporation spokesman was Chapple.

^{Page 439 note 4} Ibid. Colonial Office memorandum from Scott to Poynton, 17 April 1951.

^{Page 439 note 5} Ibid. The Governor's Deputy to the Colonial Secretary, 4 June 1951.

^{Page 440 note 1} Ibid. Colonial Office memorandum by Burt, 20 April 1951.

^{Page 440 note 2} Ibid. Hill, Board of Trade, to Cohen, Colonial Office, 24 January 1951.

^{Page 440 note 3} Ibid. Colonial Office to the Governor, 14 March 1951.

^{Page 440 note 4} Ibid. Colonial Office memorandum by Burt, 20 April 1951.

^{Page 440 note 5} Ibid. Poynton, Permanent Secretary, to Chapple, Diamond Corporation, 19 June 1951.

^{Page 440 note 6} Pressure is denied in P.R.O., C.O. 537/7197; Rogers, Colonial Office, to the Acting Governor, 5 June 1951.

^{Page 440 note 7} Gawaine, op.cit. p. 161.

^{Page 441 note 1} Ibid. p. 156.

^{Page 441 note 2} Ibid. pp. 159 and 163.

^{Page 441 note 3} Burgess, op.cit. pp. 109–10. The Minister of State for Colonial Affairs, Alan Lennox-Boyd, was reported in January 1952 to have had confidential talks with Williamson in Tanganyika.

^{Page 441 note 4} Gawaine, op.cit. p. 164.

^{Page 441 note 5} Burgess, op.cit. p. 120.

^{Page 441 note 6} Hockin, V. T., ‘Memorandum by Commissioner for Mines on the Oppenheimer Proposals for a New Purchasing Agreement with Williamson Diamonds Ltd.’, 1955.Google Scholar

^{Page 441 note 7} Ibid.

^{Page 441 note 8} ‘Re Williamson Diamonds Ltd.’, Creech Jones Papers, Box 46, File 3.

^{Page 442 note 1} ‘Memorandum of Agreement between Williamson Diamonds Ltd. and the Diamond Corporation Ltd.’; ibid.

^{Page 442 note 2} Mines Division. Annual Report, 1958, p. 3.

^{Page 442 note 3} Ibid.

^{Page 442 note 4} Financial Times (London), 13 08 1958.Google Scholar PubMed

^{Page 444 note 1} Greenhalgh, op.cit. pp. 255–8 and 260–3.

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