Auriument aims and skille $$ 1,2,4,7 $$, , 1. Why doyou think the competition between Rhodes and Barnatos' companles Increased the level of production of dlamonds? 2. If thls competition continued, what do you think might have happened to the price of diamonds on the market? Explain your answer. 3. Read Source E and the text on these two pages. Explain in a one page essay how the procers of amalgamation (Jolning up) Into one company happened on the diamond fields. Your answer will be marked with the rubric on page 244. 4. Read Source F and explaln how Kimberley changed.

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To address your questions, let's break them down step by step.

### 1. Why do you think the competition between Rhodes and Barnato's companies increased the level of production of diamonds?

The competition between Rhodes and Barnato's companies likely increased the level of diamond production for several reasons:

- **Market Pressure**: With two major companies vying for dominance, each would strive to outproduce the other to capture a larger market share. This competition would lead to increased investment in mining operations, technology, and labor to maximize output.

- **Innovation and Efficiency**: Competition often drives innovation. Both companies would seek to improve their mining techniques and processes to extract diamonds more efficiently, leading to higher production levels.

- **Resource Allocation**: The rivalry would encourage both companies to allocate more resources, such as capital and manpower, to diamond mining, further boosting production.

- **Price Competition**: To attract buyers, both companies might lower prices, which could lead to increased sales volume and, consequently, higher production levels to meet demand.

### 2. If this competition continued, what do you think might have happened to the price of diamonds on the market? Explain your answer.

If the competition between Rhodes and Barnato's companies continued, the price of diamonds on the market would likely have decreased. Here's why:

- **Increased Supply**: As both companies ramped up production to outdo each other, the supply of diamonds in the market would increase significantly. According to the law of supply and demand, an increase in supply, assuming demand remains constant, typically leads to a decrease in prices.

- **Price Wars**: The intense competition could lead to price wars, where each company continuously undercuts the other’s prices to attract customers. This would further drive prices down.

- **Market Saturation**: With both companies producing at high levels, the market could become saturated with diamonds, leading to a surplus. A surplus usually results in lower prices as sellers try to offload excess inventory.

### 3. Explain in a one-page essay how the process of amalgamation (joining up) into one company happened on the diamond fields.

The process of amalgamation in the diamond fields was driven by the need for efficiency and profitability in a highly competitive environment. Initially, the diamond mining industry was fragmented, with numerous small operators competing for resources. However, as competition intensified, particularly between major players like Cecil Rhodes and Barney Barnato, the landscape began to change.

The first step in the amalgamation process was the recognition that consolidating operations could lead to greater efficiency. By pooling resources, companies could reduce operational costs, share technology, and streamline production processes. This realization prompted negotiations between competing firms, as they sought to combine their strengths to create a more formidable entity.

Rhodes, with his vision of a monopoly, actively pursued mergers with smaller companies. His strategy involved buying out competitors and consolidating their operations under the De Beers name. This approach not only increased production capacity but also allowed for better control over diamond prices in the market.

Barnato, recognizing the threat posed by Rhodes's aggressive tactics, also sought to consolidate his interests. The competition between the two led to a series of negotiations and strategic alliances, ultimately resulting in the formation of a single dominant company in the diamond industry.

The culmination of these efforts was the establishment of the De Beers Consolidated Mines in 1888, which effectively controlled the majority of diamond production in South Africa. This amalgamation not only transformed the diamond industry but also set the stage for the establishment of a monopoly that would influence diamond prices and availability for decades to come.

### 4. Explain how Kimberley changed.

Kimberley underwent significant changes during the diamond rush and the subsequent consolidation of the diamond industry. Initially, Kimberley was a small settlement that rapidly transformed into a bustling town as prospectors flocked to the area in search of fortune. The discovery of diamonds in the late 19th century led to a population boom, with people from various backgrounds arriving to stake their claims.

As the diamond industry grew, so did the infrastructure of Kimberley. The town saw the development of roads, railways, and other essential services to support the influx of miners and businesses. This growth attracted not only miners but also merchants, service providers, and laborers, leading to a diverse and vibrant community.

However, the competition between major companies like Rhodes and Barnato also brought about social and economic challenges. The consolidation of diamond mining operations led to the displacement of many small-scale miners and the establishment of a more structured, corporate-controlled industry. This shift often resulted in tensions between the large companies and the local population, as the latter struggled to adapt to the new economic realities.

In summary, Kimberley transformed from a small settlement into a major urban center driven by the diamond industry, experiencing both growth and challenges as the dynamics of competition and consolidation reshaped its social and economic landscape.
1. **Increased Production:** Competition between Rhodes and Barnato's companies pushed both to boost diamond mining operations, leading to higher production levels. 2. **Price Decrease:** With increased supply and potential price wars, the price of diamonds would likely drop as the market became more saturated. 3. **Amalgamation Process:** To enhance efficiency and profitability, companies merged their operations, forming a dominant entity like De Beers, which controlled most diamond production. 4. **Kimberley's Transformation:** Kimberley grew rapidly due to the diamond rush, becoming a bustling urban center with improved infrastructure but also facing challenges from corporate consolidation and displacement of small miners.

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