The pioneers of Kimberley took possession of the diamondiferous grounds without ascertaining to whom they belonged, and when their value became positive the question of ownership arose. The boundaries of the districts administered by the Cape Colony, the Orange Free State, and the Transvaal respectively were, as regards territory, supposed to be of little account, vague, ill-defined, and unsurveyed; and the districts themselves were occupied by native tribes of nomad habits. About the middle of the XIXth century a Hottentot chief named Waterboer came up out of the West and squatted in the districts lying between the Orange and the Vaal. His rights, such as they were, were assumed or acquired by the Cape Government, which soon became involved in controversy with the Orange Free State as to their extent and nature. Finally the British Empire secured a good title to the estate by the payment of £90,000. But the Orange Free State not unnaturally, when the value of the Diamond Fields increased day by day, soon began to think that it had parted with a profitable possession for an inadequate return. The feeling rankled; and the confident expectation of recovering Kimberley sold for a song tempted Bloemfontein into the fatal alliance with Pretoria.
In 1871 a sickly youth named Cecil Rhodes came from England to South Africa in search of health, which after a short sojourn in Natal he found at Kimberley. The prospects of the place favourably impressed him, and he soon laid in it the foundations of his fortune; but six years later the future of Kimberley was still precarious and the discovery of gold in a remote district of the Transvaal sucked thither the greater proportion of the citizens, who, however, found that they had not bettered themselves by the change and returned to the pipes: and soon nearly a hundred companies, syndicates, and private adventurers were groping for diamonds over an area of less than two hundred acres. The waste of energy was manifest to Rhodes, who in 1888 completed, with the help of the Rothschilds, the task upon which he had been engaged for some years, the amalgamation of the conflicting and overlapping diamond interests under the name of the De Beers Consolidated Mines. It was soon found that the new industry was insufficiently protected by the existing criminal law and a new felony was created by the Illicit Diamond Buying Act.
It has been for several centuries the practice of Great Britain to entrust to private companies the imperial responsibilities which she is reluctant to assume and to let out to contractors, who can be repudiated if they fail and expropriated if they succeed, the job of expanding an Empire. Of this policy the most prominent instance is the East India Company, a commercial venture which obtained from Queen Elizabeth a charter empowering it to trade with the East and which, though connected with Great Britain only by the slender thread of an ocean track of 12,000 miles,