372. Telegram 207 From the Embassy in Guyana to the Department of State, February 17, 1971, 2150Z.1 2

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TELEGRAM
Department of State
GEORGETOWN 207

P 172150Z FEB 71

FM AMEMBASSY GEORGETOWN
TO SECSTATE WASHDC PRIORITY 5393
GEORGETOWN 207

FOR ASST SEC MEYER
SUBJ: BAUXITE: VISIT TO GUYANA OF JUSTICE ARTHUR GOLDBERG
REF: (A) STATE 025101 (B) GEORGETOWN 178

1. JUSTICE GOLDBERG REQUESTS THAT THIS MESSAGE BE GIVEN NO FOREIGN DISSEMINATION.

2. JUSTICE ARTHUR GOLDBERG ARRIVED IN GEORGETOWN ON A REYNOLDS PRIVATE AIRCRAFT THE EVENING OF SUNDAY, FEB 14 AND DEPARTED BY THE SAME MEANS AT ABOUT 4 PM TUESDAY, FEB 16. HE MET WITH PRIME MINISTER BURNHAM FOR ALMOST TWO HOURS BEGINNING AT 9 AM MONDAY AND FOR ABOUT 45 MINUTES AT 2 PM MONDAY AND FOR ANOTHER 45 MINUTES AT 2 PM TUESDAY. THE RESULT OF HIS DISCUSSIONS WAS AN ASSURANCE BY BURNHAM THAT HE WOULD NOT MOVE PRECIPITOUSLY AGAINST REYNOLDS AND THAT HE WAS PREPARED IN DUE COURSE TO OPEN NEGOTIATIONS, AND ENTERTAIN PROPOSALS FROM REYNOLDS AS TO HOW IT COULD PARTICIPATE IN THE EXPANSION OF A RE-ORGANIZED BAUXITE INDUSTRY IN GUYANA. BURNHAM LEFT LITTLE DOUBT IN THE JUSTICE’S MIND THAT HE INTENDED TO HAVE CONTROL OF DEMBA, ALCAN’S SUBSIDIARY, BY REPUBLIC DAY ON FEBRUARY 23 OR HE WOULD NATIONALIZE IT AND THAT NATIONALIZATION WAS THE LIKELY OUTCOME OF CURRENT TALKS.

3. JUSTICE GOLDBERG STAYED WITH ME AT THE RESIDENCE, WHICH PROVIDED OPPORTUNITIES FOR SEVERAL LONG CONVERSATIONS IN PRIVATE, DURING WHICH, [text not declassified] I TOLD HIM ALL I COULD ABOUT BURNHAM AND RECENT DEVELOPMENTS IN GUYANA. HE TALKED PRIVATELY AS WELL AS IN MY PRESENCE ON SEVERAL OCCASIONS [Page 2] WITH DICK ROBERTS, VICE PRESIDENT OF REYNOLDS WHO ACCOMPANIED HIM ON HIS VISIT, AND VERNON ROOSEVELT THE LOCAL REYNOLDS MANAGER.

4. MY IMPRESSION WAS THAT JUSTICE GOLBBERG REVIEWED WITH BURNHAM THE GENERAL EFFECTS THAT NATIONALIZATION OF REYNOLDS WOULD HAVE ON OVER-ALL USO GUYANESE RELATIONS, STRESSING THE PRESENT MOOD OF THE US CONGRESS AND THE IMPORTANCE TO GUYANA OF CONTINUED ACCESS TO THE US MARKET FOR A SUBSTANTIAL AMOUNT OF ITS SUGAR PRODUCTION. HE ALSO APPARENTLY CAME DOWN HARD ON THE NEED GUYANA HAS FOR FOREIGN PRIVATE INVESTMENT AND THE REACTION IN CAPITAL MARKETS THAT WOULD INEVITABLY FOLLOW PREJUDICIAL MEASURES HERE. I BELIEVE HE ALSO SUGGESTED TO BURNHAM THAT HE SHOULD LOOK CAREFULLY AT VARIOUS ALTERNATIVE MEANS OF RAISING CAPITAL FOR EQUITY PARTICIPATION IN INDUSTRIES ALREADY ESTABLISHED IN GUYANA WHICH MIGHT BE PREFERABLE TO THE NATIONALIZATION ROUTE. WHILE HE MADE CLEAR TO BURNHAM THAT HE WAS NOT HERE TO NEGOTIATE ON BEHALF OF REYNOLDS BUT RATHER HOPED TO OFFER HIS GOOD OFFICES IN ACHIEVING AN AMICABLE ARRANGEMENT, THE JUSTICE APPARENTLY DID THROW OUT THE SUGGESTION THAT REYNOLDS MIGHT BE WILLING TO CONSTRUCT SIZEABLE CALCINED BAUXITE PROCESSING FACILITIES WHICH WOULD BE TURNED OVER 100 PERCENT TO THE GOG TO OPERATE WHILE LEAVING REYNOLDS PRESENT MINING OPERATIONS IN THE COMPANY’S HAND AS AT PRESENT. BURNHAM REPORTEDLY WAS INTERESTED AND AGREED THAT SUCH IMAGINATIVE PROPOSALS COULD BE DISCUSSED AT A LATER DATE.

5. JUSTICE GOLDBERG SAID HE DISCUSSED WITH BURNHAM THE REPORTS HE HAD HEARD BEFORE COMING HERE (THIS TO PROTECT US IN EMBASSY) THAT EASTERN EUROPEAN COUNTRIES OTHER THAN YUGOSLAVIA WERE MOVING IN WITH FINANCIAL, TECHNICAL AND PERSONNEL ASSISTANCE. BURNHAM APPARENTLY REASSURED HIM. WE HAD PREVIOUSLY TOLD HIM WE HAD NO BASIS TO ACCEPT SUCH REPORTS AS HAVING ANY VALIDITY.

6. BURNHAM APPARENTLY REPEATED TO JUSTICE GOLDBERG MANY OF THE CRITICISMS HE HAS MADE OF LATE REGARDING ALCAN’S ALLEGED INFLEXIBILITY. HE WAS ALSO OBVIOUSLY MIFFED BECAUSE JOHN J. MCCLOY, WHOM HE EXPECTED HERE TO INTERVENE ON BEHALF OF ALCAN, HAD DECIDED AT THE LAST MINUTE THAT HE HAD MORE IMPORTANT BUSINESS IN CONNECTION WITH THE SALT TALKS. HE TOLD THE JUSTICE HE COULD COUNT ON 7 TO 9 PPP VOTES IN FAVOR OF THE CONSTITUTIONAL AMENDMENTS HE WILL HAVE TO PUT THROUGH TO NATIONALIZE DEMBA EVEN IF CHEDDI JAGAN SHOULD OPPOSE THEM.

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7. THE PRESS AND RADIO INEVITABLY LEARNED OF JUSTICE GOLDBERG’S PRESENCE AND ASKED QUESTIONS OF THE EMBASSY AND OF THE PRIME MINISTER’S PRESS OFFICER. WHILE NEITHER ISSUED ANY STATEMENT, IT WAS AGREED THAT QUERIES WOULD BE ANSWERED BY STRESSING THAT JUSTICE GOLDBERG WAS HERE AS A PRIVATE CITIZEN TO RENEW ACQUAINTANCES AND TO LOOK INTO THE SITUATION TO SEE WHETHER HE MIGHT BE OF ASSISTANCE IN BRINGING REYNOLDS AND THE GOG CLOSER TOGETHER. THE PRESS HAS NOT YET PUBLISHED ANYTHING ABOUT THIS VISIT, ALTHOUGH THE RADIO MENTIONED IT BRIEFLY IN THESE TERMS. GP–3. KING

  1. Source: National Archives, Nixon Presidential Materials, NSC Files, Box 785, Country Files, Latin America, Guyana, Vol. 1. Secret; Exdis; Priority. Justice Goldberg requested that this message be give no foreign dissemination. After Burnham’s conversation with Goldberg, Burnham decided not to nationalize Reynolds, but would nationalized DEMBA. (Telegram 204 from Georgetown, February 17, ibid.)
  2. According to Ambassador King, former Supreme Court Justice Arthur Goldberg discussed with Prime Minister Burnham the negative economic effects of the nationalization of the bauxite industry for Guyana’s economy. Goldberg raised the possibility that Reynolds might construct processing facilities in Guyana, and Burnham showed interest.