LETTER TO THE HONORABLE DEAN RUSK FROM(Sanitized)

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80B01676R002900220012-6
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 6
• Document Creation Date: December 16, 2016
• Document Release Date: October 19, 2004
• Sequence Number: 12
• Publication Date: February 17, 1962
• Content Type: LETTER

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17 February 1962
The Honorable Dean Rusk
The Secretary of State
partment of State
'Washington 25, D. C.
Dear Mr. Secretary;
Mr. John A. hicCore, who is
out of the city today, asked that the
attached memorandum be given to
you for your information.
Since its preparation, the
situation has deteriorated further
and the capital of the country has
been gutted by fire.
Sincerely,
Walter Elder
Assistant to the Director
Orig - Addressee w/att.+E
1 - DCI
1-ER
O/D-CI (Mr. Elder)
- Alice
State Department review completed
ER t..e. - 9'I 7
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CENTRAL INTELLIGENCE AGENCY
OFFICE OF CURRENT INTELLIGENCE
17 February 1962
OCINo No. 0723 _- - -- - o y No
CURRENT INTELLIGENCE MEMORANDUM
SUBJECT: The Situation in British Guiana
1. The general strike in British Guiana9 which has
paralyzed the capital city and on 16 February occasioned
extensive violence, was organized by a combination of la-
bor and the opposition parties to take advantage of the
growing economic discontent and lack of accomplishments
of Premier Jagan's People's Progressive Party government,
The immediate spark was the new budget with its high tax
and compulsory savings provisions.
20 By 16 February all organized government workers
were out, ending most municipal services; nearly all busi-
nesses were closed, and airline service into the country
had ceased. Most telephone, radio and cable services were
shut down. Unruly crowds gathered in Georgetown despite
the goves nnor's ban on public meetings, and Jagan took to
the radio to promise withdrawal of some of the fiscal
measures especially under attack. In the interior, the
large Canadian-owned Demerara Bauxite Company was ceasing
operations with the workers assisting in an orderly shut-
down. As of 16 February, Jagan's stronghold of the rural
rice and sugar-producing areas was not seriously affected.
3. In response to Premier Jagan's plea for assist-
ance in keeping order..;
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4. security forces in
the colony consist of a 1,500-man police force under the
nominal control of Jagan's Minister of Home Affairs Rai
and a 500-man European-officered national-guard type of
volunteer force which has been ordered to stand by. The
police force is largely Negro, in spite of Jagan's efforts
since his August 1961 election victory to "East-Indianize"
it and make it more of a political instrument. Jagan may
have feared that the police would refuse to obey orders
to curb demonstrators. Jagan himself has been inadequately
protected by the police and was stoned during the Duke of
Edinburgh's recent visit, but as of 16 February the police
were still obeying his orders. There is no confirmation
of opposition charges that Jagan was attempting to estab-
lish a paramilitary force in support of his People's Pro-
gressive Party.
Background
5. By the first week in February, tariff increases
taking effect right after the budget's introduction on 31
January were already causing hardship among the lower
classes and the merchant class was complaining that the
tax provisions were Jagan's first step in establishing a
Communist state. There were rumblings of discontent over
the earlier restrictions on the export of capital coming
on top of the government's inability so far to do much
toward solving its economic problems or to obtain economic
aid.
6. Jagan als( has problems in the agricultural
areas. The government's land reclamation and resettle-
ment scheme at Black Bush Polder has been a spectacular
failure so far and most of the rice crop has been lost.
Recognizing that Guianese sugar costs more to produce than
the current world export price, the Guianese Government
has asked the US for an allocation from the former Cuban
sugar quota.
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7. Jagan has introduced a plethora of leftist eco-
nomic advisers including Nicholas Kaldor, a Briton who
helped draft the budget, and a Frenchman, Charles Betel-
heim. Much popular antagonism is focused on Jack Kelshall,
who is Jagan's closest confidant with the title of private
secretary and public relations adviser, on the grounds
that he is a foreigner--from Trinidad--and that he gives
orders to elected ministers. Although Kelshall
ered by some to be a Communist, 25X1
in October 1961 labeled him as a "freewheeling fellow trav-
eler." Kelshall has made statements to the effect that
money is waiting for British Guiana in the Soviet Union and
that people who disagree with the government?s program will
be deported. The Premier's estranged wife, Janet, who
toured the Soviet Bloc and Cuba recently, returned to the
colony on 14 February.
8. Widespread fear that the government was prepar-
ing for a dictatorial or even Communist regime was also
aroused by such measures as Jagan's refusal to permit the
opposition to participate in drafting the new constitution
for the May 1962 independence conference in London, by his
efforts to build up a pro-Jagan union in the sugar areas,
and by his maneuvers to get political control of the police
force.
9. It is unclear how long the strike will continue,
The Guianese labor movement consists of several badly run
unions of varying sizes--the largest being the Manpower
Citizens Association of sugar workers--loosely grouped
into the Trades Union Council under the ineffective lead-
ership of Richard Ishmael, a long-time Jagan foe. In this
low-wage country, where 18 to 20 percent of the labor
force is unemployed, the strikers cannot hold out for long.
10. On 15 February Jagan stated to
that the present crisis was attributable to the Americans
because they were giving money to Peter D?Aguiar, leader
of the United Force--the smaller and more conservative of
the two opposition parties_
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that he be.-
ere was no factual basis for
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the charge. At the time of the August elections, Jagan
also complained of US interference but subsequently
sto ed such charges in the interests of obtaining aid.
states that recent American visitors to British
Guiana have included "adventurers, naive businessmen, and
one probable psycopath" who have given rise to rumors
that there is a network of US intelligence agents operat-
ing.
12. The opposition, however, has been hoping to over-
throw Jagan either by forcing him to resign or by obtain-
ing sufficient defections from his small legislative major-
ity to topple him on a vote of confidence. At present,
Jagan has 19 seats of 35 (a 20th was unseated for electoral
corruption), the United Force (UF) has 4 and the People's
National Congress (PNC) has 11. Jagan's opportunistic Po-
lice Minister, Balram Singh Rai, is considered a possible
defector by both and the opposition, but as of
16 February the ce were the only public servants still
obeying the orders of p'agan's administration.. In any case,
a switch of three votes would topple Jagan.
Outlook
are 13. At best the ros ects for olitIcal stabili
oor.
terly attacking each other as ofemid-December, andewhillet
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I now cooperating in the strike action, do not plan a merger.
The estimate of Jagan's electors defeat
seems reasonable, particularly as he won only 42 percent
of the popular vote last August, and the traditional po-
litical alignment of East Indians vs. Negroes has already
been broken by the events of the past few days. Though
unlikely, it is conceivable that the PNC could win a pop-
ular majority. PNC chances would improve in the unlikely
event that the present leader, Forbes Burnham were replaced.
14. The 38-year-old Burnham is a Negro lawyer who has
antagonized many non-Negroes by his racialist policies; Q
He professes to be a so-
cialist, having split with Jagan in 1955 over his interest
in communism. He has concentrated on opposing Jagan with-
out offering much of an alternative program. There is
considerable factionalism in the party, and its policy in
power would be hard to predict. It would probably follow
the standard anti-colonialist line and seek aid from the
Bloc if unsatisfied by Western offers. Two strongly anti-
Communist moderates lost bids for leadership at the Novem-
ber party conference but could alter the orientation if
they made a comeback now. Should the party follow Burn-
ham's previous racist line--as it well might after four
years in opposition--violence could erupt between the Ne-
gro 35 percent of the population and the East Indian 50
percent.
15. The conservative, multi-racial United Force is
strongly anti-Communist and pro-US but has never had much
popular appeal since its inauguration in 1960. Its leader,
Peter D'Aguiar, was so disappointed by the party's poor
showing in the August elections (16 percent of the popular
vote) that he considered quitting politics. The party's
current demand for "no independence," or a referendum on
the issue, and its extravagant development plans have not
improved its chances. Representing largely business inter-
ests and disaffected former members of other parties, it
has little in common with the PNC except the desire to oust
Jagan.
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