Today diamonds are known as a girl’s best friend, but in the early 1900’s diamonds became the greatest friend to the Oppenheimer family. Since then four generations of the Oppenheimer clan have ruled the global diamond market. The Oppenheimer’s and their diamond industry have played a pivotal role in the fight against Apartheid in South Africa.
Ernest Oppenheimer was born to cigar merchant, Edward Oppenheimer, on May 22, 1880 in Friedberg, Germany. He was born Jewish, but later converted to Christianity Ernest began his working career at the tender age of seventeen, ironically at a diamond brokerage located in London. His employer was so impressed with his efforts that he was sent to Kimberly, South Africa to stand in for the company, Dunkelsbuhler & Company, as a buyer in 1902. At this early time, Ernest could have never imagined that he would become the head of the most powerful diamond cartel in the world. Estimates of their private worth today vary between four and six billion dollars. During this time Ernest married Mary Lina Pollock and she bore him two sons. Only one son survived, as the other had perished in an accident. Mary later died and Ernest remarried two years later to the daughter of an English baron and widow of his nephew who had died in a plane crash, a Briton by the name of Caroline Harvey.
While living and working in Kimberly, South Africa, Ernest became very active in politics and was elected in 1908 to the city council. He later became the mayor of Kimberly and helped to establish the Kimberly Regiment when World War I originated. He organized the labor efforts involved with the construction of the railroad system between Upington and the Namibian borders. The British government was so delighted with his ambitious actions that they bestowed the honorary knighthood upon him. Sir Ernest Oppenheimer had founded the flourishing mining house Anglo American Corporation in 1917. Ernest later took membership within the South African Party which served under General Jan Smuts. Oppenheimer also represented Kimberly in Parliament. He tried to remain detached from the ongoing debates within the Parliament about racial concerns. His attention was more clearly in the direction of economic and financial interests. He retired from the political realm in 1938. He was regarded to be politically progressive in his views, especially regarding the equal treatment of the black South African population.
As time went on, Ernest moved his wife and children to Johannesburg. It was in this area of Africa that he held mining interests and this is where he began his upward rise towards achieving a stronghold monopoly of the diamond empire. Diamonds became the center of the economic, social, and political life of South Africa. There seemed to be an unlimited supply of diamonds due to the volcanic activity in the area, and Ernest found a way to capitalize on this fortune. From 1988, Cecil Rhodes held control of the entire diamond market. He held the title to four diamond pipes through two agencies. The first agency he formed in 1880 called De Beers Consolidated Mines, LTD. The second agency was one of the largest commercial diamond trade called the London Diamond Syndicate. With the guaranteed promise of a specific amount of diamonds, they provided Cecil Rhodes with high quality insider information regarding the market thus allowing him to meet the market demand with an exact supply creating an easily manipulated cost to the customers. After the World War I ended, the price for diamonds took a sharp decline due to the over-production of diamonds well beyond the stated demand. Oppenheimer played an instrumental roll when he created a cartel that ultimately controlled the price of diamonds.
Oppenheimer created the Central Selling Organization (CSO). This organization allowed the successful integration of incorporation for other major producers and sellers into the De Beers association. He later took the position of the director of De Beers in 1926. In 1929, he was elected to the position of chairman of the board for De Beers. In 1930, he formed the Diamond Corporation. This corporation allowed the De Beers diamond conglomerate and other producers to possess direct interest in the sale of minerals. The government in South Africa looked to Oppenheimer for advice when diamonds were discovered in other areas of the country. This caused him to become a leading figure in the diamond industry.
Oppenheimer’s industry took a big decline when the depression caused the demand for diamonds to down-shift. Unfortunately, Ernest had to close down several mines for lack of business and profit. He still had to comply with previous obligations he had already made with the Central Selling Organization.
Ernest took a position as the deputy chair of the Rhokana Corporation and served on the commissions that ultimately led to the creation of the South African Reserve Bank. He served as the director of Barclay’s Bank and the British South Africa Company.
During World War II, Oppenheimer facilitated the establishment of diamond cutting facilities in South Africa leading to the replacement of the factories in Europe. With the direct leadership of Ernest Oppenheimer, Anglo-American grew into a multi-million Rand (the currency of South Africa) business.
Oppenheimer had affiliations with several different educational facilities both locally and within Britain. He assisted in the establishment of an engineering department at the University of Stellenbosch. He donated monies to the Oxford University towards the establishment of a centre of colonial research.
Ernest Oppenheimer was one of the first people to step up and provide adequate housing for the black mine workers and their families. The early years of the Kimberly mining were very competitive. That competition drove prices down. The mine owners complained that their profits were taking a hit due to thievery by their own workers, and the sale of stolen diamonds or illicit diamond buying within the towns. To resolve these issues the owners of the mines housed the mine workers in closed off barracks, also called compounds. The mine workers were only allowed to leave these compounds when they were going to work in the mines, thus allowing the owners to put forward a measure of control over their human resources that they were unable to accomplish before. Doing this allowed them to create lower wages and less then hospitable living conditions which was less likely to be questioned. Strangely enough, the white mine laborers were not required to live in such compounds, even though they were equally involved in the illicit diamond buying and selling as the black mine workers. This segregation caused a lot of conflict and uncertainty.
Sir Ernest Oppenheimer passed away on November 25, 1957, leaving his entire empire to his only surviving son Harry Frederick Oppenheimer. Harry was born in Kimberly, South Africa on October 28, 1908. He attended his early schooling in Johannesburg and then continued his education at Charterhouse in England. Finally completing his educational journey at the Christ Church in Oxford, he graduated in a variety of areas to include philosophy, economics and politics in 1931. Harry then returned to Johannesburg where he joined the Anglo American Corporation that his father had previously founded. He also did his duty by serving in the South African Corps where he served in the Fourth South African Corps during the Second World War, which took place in North Africa. After returning to South Africa he took the position of Managing Director of the Corporation in 1945. He was a strong force in the expansion of the Anglo American’s mining for gold operations carried out in the west Witwatersrand and the mining of copper in Zambia.
Harry, like his father before him, became heavily involved in the political arenas and was elected as a Member of Parliament for Kimberly in 1948 serving under the United Party. With the passing of his father, he in turn resigned from his parliamentary seat, but this did not put a halt to his expressions about his political views. He played a very pivotal role in the formation of the Progressive Party which they later renamed the Progressive Federal Party (PFP), continuing to provide financial backing throughout the years.
He began to oversee the expansion of the diamond industry and De Beers. The Anglo American emerged into a major international company. Harry held the role of chairman of Anglo American Corporation and De Beers Consolidated Mines for well over twenty-five years when he finally settled in retirement. While in retirement, he still remained very active in the interests of the family business. Harry Oppenheimer died on August 19, 2000 in Johannesburg at the age of ninety-one years old.
At the time of Harry’s death, he was considered to be one of the richest men in the world. Born into the extremely stately fortune made by his father, he proceeded to increase those riches to an extreme extent. Due to his leadership skills within the Anglo American, there were very few companies with sizeable clout that they did not own a part of, and usually a fairly large part.
De Beers regulated the production and distribution of more the eighty percent of the world’s diamonds. Fingers were pointed towards the massive inequality between the profits that the monopoly made to the wages that were paid to the workers. Harry Oppenheimer saw himself as faultless liberal, which really didn’t say too much other then he disliked the Boer mulishness. He did feel that it was quite acceptable that Africans would think of the economy as a form of slavery, but he also believed that the demands made by leaders of the resistance movement for higher wages were “quite incompatible with the political demand for complete independence from the white man”.
De Beers was established in 1988 and together with its joint venture partners, is operating in over twenty different countries, across six different continents, and currently employs more than 13, 000 people. They are still the world’s largest diamond producers. They now follow the company’s philosophy of Living up to Diamonds. They do this by making contributions to the communities where they live and work. They strive to help governments achieve their aspiration of turning natural resources into share national wealth. They encourage positive development in the long term for Africa and they return more than $3.0 billion to the continent every year.
The Oppenheimer dynasty is currently being run by Harry’s grandsons. The Oppenheimer family and their fortunes are a legend in their own rights. They have definitely made their mark in the world, and as they say, diamonds are forever.
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