OPPENHEIMER, ERNEST

Sir Ernest Oppenheimer (May 22, 1880-November 25. 1957) was the founder and head of a conglomerate of financial, industrial and mining interests in southern Africa and a member of the South African Parliament.

PHOTO CAPTION: Oppenheimer Ernest. SOURCE: EA Library

Oppenheimer was born in Friedberg (Hesse) Germany, the son of a cigar merchant. At age 16, he followed his two elder brothers to London to work in the office of A. Dunkelsbuhler, a diamond broker and member of the Diamond Syndicate, which controlled the sale of rough diamonds.

In 1902 Dunkelsbuhler sent Oppenheimer to Kimberley to represent the firm on the South African diamond fields. On a return visit to London in 1905, Oppenheimer married May Pollack, a long-time acquaintance. They returned to South Africa and settled in Kimberley.

Oppenheimer took an active interest in local politics; in 1908 he was elected to the Kimberley city council and in 1912 was elected mayor of Kimberley. When World War I was declared, Oppenheimer raised and outfitted a regiment from Kimberley to join the South African Defence Forces.

Despite his active and visible support for the South African forces, including his founding of the Aviation Syndicate, a precursor of the South African Aviation Corps, Oppenheimer could not overcome the strong anti-German sentiment in Kimberley. When South African Prime Minister General Louis Botha declared war on Germany and began an invasion of German occupied South West Africa (Namibia), Oppenheimer’s German background and loyalties were openly questioned in public meetings.

Upon the sinking of the Lusitania, anti-German riots broke out in Johannesburg and spread to other cities. When mobs stoned his house in Kimberley, Oppenheimer resigned as mayor, closed up his house and took his family to London. He returned to Kimberley in 1916, representing both Dunkelsbuhler and London’s Consolidated Mines Selection Company (CMS). He also began to purchase Far East Rand mineral rights, doing so with the belief that there were riches to uncover there.

At this time, Oppenheimer was maneuvering with an eye to the realisation of his primary dream: to head his own mining group. Moving on this plan in 1917, Oppenheimer arranged for financing from U.S. sources. He called on his American friend, mining engineer William Honold.

Through Honold’s association with Herbert Hoover, who was raising funds for the American Commission for the Relief of Belgium, and his connections with Newmont Mining Corporation and its financial bankers, J.P. Morgan and Company, Oppenheimer was able to put together sufficient financing to explore the Far East Rand. He formed his new company, the Anglo American Corporation of South Africa (AAC) on September 25, 1917. The Far East Rand proved as rich as Oppenheimer thought it would. Eventually, the company expanded into the Orange Free State and opened the Western Deep Levels mine, which developed as one of the largest gold mines in the world.

Oppenheimer’s willingness to gamble had allowed his company to expand to such an extent that he outdistanced many of the larger, more conservative mining firms. During the war, South African troops had defeated German forces in South-West Africa and the government had confiscated all German business there, including the diamond fields at Luderitz. At the end of the war, the Germans sold off their businesses rather than accommodating themselves to the South African mandate under the aegis of the League of Nations. Oppenheimer made his bids for the business before De Beers or any other company could make an offer. He amalgamated 12 former German companies into a new firm, Consolidated Diamonds (CDM) of South-West Africa.

Anglo-American also bought contracts from diamond producers in Angola and the Belgian Congo, whose mines proved to be abundant, and from diamond producers in Ghana and Sierra Leone. Anglo explored to the north as well, financing the foundations of the copper industry in Northern Rhodesia (Zambia).

When platinum was discovered in the Transvaal, Oppenheimer bought into the find and formed the Potgieterust Platinum Mines at Rustenburg. The Rustenburg field was one of the richest platinum fields in the world. While Oppenheimer’s primary interests were entrepreneurial, his dominant economic role led to a natural interest in the politics of the day, and a desire to influence parliamentary thinking on questions pertaining to the mining industry. Oppenheimer served with the opposition in Parliament from 1924 until 1938.

He vigorously opposed government efforts to nationalize the mines and, on the suffrage issue, he took up Rhodes‘ old dictum, “Equal rights for all civilised men,” a view that was a step ahead of the South African Party. He also wanted South Africa to remain in the British Commonwealth. Generally, Oppenheimer chose not to speak on matters of social policy.

Oppenheimer’s next financial coup, following the founding of Anglo-American and exploitation of the Far East Rand, was his establishment of control over the informal but hugely powerful London diamond syndicate. This was accomplished when Oppenheimer formed his own syndicate and put much of his capital into the purchase of Kimberley and Premier mines output. In this way, Oppenheimer broke the monopsony of the London syndicate, and was subsequently invited to join the De Beers Consolidated Mines board.

To counter the effects of the worldwide depression on diamond prices, Oppenheimer formed the Diamond Corporation in 1930. All the major South African diamond producers and those in West and Central Africa agreed to sell their diamonds to the Corporation. In turn, the producers received a share of the sale of the stones. As long as the Corporation bought up all the diamonds, the mines could continue to produce and the world price would be sustained. The policy was difficult to maintain, but eventually both the world economy and the diamond industry regained strength.

Coming out of the recession and the turbulent years spent debating whether to remain on the gold standard, the South African government and the diamond producers decided to protect their resources and formed the Central Selling Organisation, a system devised by Oppenheimer and one that is in place today.

Under Oppenheimer’s guidance, the Anglo-American Corporation grew to be one of the largest concerns in South Africa, employing 150,000 people at the time of his death in 1957. From its beginnings in 1917, Anglo-American had become one of the world’s largest producers of gold, diamonds, copper, and platinum. A wealthy man, Oppenheimer was a noted philanthropist, particularly in the area of higher education. He endowed chairs, whole faculties, and made possible the foundation of Queen Elizabeth House at Oxford.

Ernest Oppenheimer, in the right place at the right time, and endowed with the requisite political skills and savoir-faire, built a South African financial empire that became a bulwark of the South African economy. His son Harry Frederick Oppenheimer was brought into the corporation as a young man; when he returned to South Africa at the end of World War II, he became managing director.

VIRGINIA CURTIN KNIGHT