377. Telegram 996 From the Embassy in Guyana to the Department of State1 2

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  • Bauxite: ALCAN and GOG Reach Agreement


  • Georgetown: 0992

1. At about 2200 last evening ALCAN and GOG reached agreement on compensation for former’s subsidiary, DEMBA, which will be taken over by government tomorrow. Valuation set at Gdollars 107 million, interest will be paid at six percent beginning January 1, 1972 (in other words, no interest will be charged, during last 5 and one-half months of this year), company assumes all current liabilities, RILA funds (retirement insurance and life assurance) will be repatriated as previously agreed, and marketing arrangements for balance 1971 will be honored.

2. When Minister State Ramphal called me to ask that I inform Arthur Goldberg, who did not participate in last night’s negotiating session, I expressed satisfaction and congratulated GOG on its handling of the problem. I asked if there had been any talk of future relationships. He replied that “yesterday and today an entirely new climate of relationship has developed, marked by new confidence, and I would expect that we will be doing business together.” I said I hoped the rhetoric could be kept down; and he agreed, although he added that Burnham was taking a risk, that the opposition and some elements in PNC would attack him and oppose the agreement as “sellout” [Page 2] to Uncle Sam.

3. Davis subsequently called Goldberg to confirm what Ramphal had told me. They had friendly talk in which Goldberg praised Davis’ handling of whole affair and Davis in turn thanked Goldberg for his contributions.

4. Goldberg spoke with Burnham this morning. Prime Minister seemed pleased but a bit sober. He is worried about reaction when news of agreement becomes public. Goldberg, incidentally, repeated to Burnham what he had said before, namely that he did not rpt not agree on course Burnham had chosen. But in circumstances he could only congratulate him on his statesmanship in reaching consensual agreement, which would help his international image, and wish him well.

5. Burnham made reference to his talk yesterday with Roberts of Reynolds, expressing satisfaction and confidence in future relationships, with that company.

6. At airport this morning, Davis reflected satisfaction with way bad situation had been brought to reasonable solution. Volunteered that new relationships which had been established led him to believe that “many areas of cooperation would be possible.”

7. Goldberg left on ALCAN plane with Davis and his party at about 0830. Campbell and Roxane, last remaining DEMBA executives, left moments later on BOAC. Sign on DEMBA’s office building across the street already torn down.

8. Comment: A) Agreement could not have been reached without participation of someone like Arthur Goldberg, which I believe both sides recognize. He repeatedly brought them back together as they began to diverge, kept their focus on essential issues when they tended get bogged down in haggling over details and advised each how to deal with the other. Key element, of course, was change in timing of “summit” meeting so that they had more than few hours work out differences.

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B) Goldberg’s presence not mentioned by press or radio, undoubtedly at Burnham’s request, although fact that Davis here received fairly wide play. However, Cheddi Jagan encountered Goldberg yesterday as he was leaving Burnham’s office and can be expected make much of his participation in arranging “sellout”, which he is sure to call agreement.

C) Have just learned that press release being prepared, that payment will run for 20 years and that “effective rate” of interest will be four and one-half percent after reduction of 25 percent withholding tax.

  1. Source: National Archives, Nixon Presidential Materials, NSC Files, Box 785, Country Files, Latin America, Guyana, Vol. 1. Secret; Exdis. Repeated to Kingston and Ottawa. A stamped notation on the telegram indicates that it was received at the White House Situation Room at 4:39 p.m. on July 14.
  2. Ambassador King credited former Chief Justice Arthur Goldberg’s visit to Guyana as instrumental in the hammering out of an agreement between Burnham and ALCAN.