Political developments in 1959-60
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In 1959, the Government introduced measures to tax the sugar companies but these were opposed by the Governor who won support from Edward Beharry, the Minister of Natural Resources. Clearly, this was creating a political crisis when a member of the Government was now openly opposing the same Government. Shortly after this situation developed, Beharry's business firm was given a contract as the sole distributor of a particular brand of cigarettes manufactured by Demerara Tobacco Company, a subsidiary of the British-American Tobacco Company. This was widely viewed as a conflict of interest, especially as Beharry was a Minister. As Beharry continued to express views against the Government's policies, Dr. Jagan asked the Governor to request his resignation from the Council of Ministers. Beharry's resignation was subsequently announced by the Speaker in the Legislative Council on 14 May 1959.
Beharry immediately crossed the floor to sit on the opposition side of the Legislative Council. His removal from the Ministry was opposed by another PPP member of the legislature, Fred Bowman, who defected from the party and also crossed the floor. In August 1959 Bowman declared that he was the organising secretary of a new party known as the Progressive Liberal Party.
Meanwhile as the date for new elections approached, an attempt was made to establish unity between the PPP and the PNC. Two Guyanese residing in New York, Felix Cummings and Ramjohn Holder, with the support of the Ambassador of Ghana to the United Nations, wrote identical letters to Dr. Jagan and Burnham suggesting that the two leaders should meet as early as possible. The letters indicated that the Government of Ghana would convene the meeting should they agree. Dr. Jagan immediately replied expressing his willingness to participate, but Burnham refused to do so. But in statements he made in his party newspaper, he vehemently attacked the suggestion by the two Guyanese whom he described as "rats" and "vermin".
In promoting social change, the Government established rules allowing non-Christian teachers to be eligible for administrative positions in primary schools. Previously, non-Christians had to convert to Christianity in order to obtain teaching jobs in the primary schools which were largely controlled by Christian denominations, even though the teachers were paid by the Government.
Meanwhile, the influence of the Cold War was increasingly felt in Guyana, particularly within the trade union movement. Some of the unions were affiliated to the pro-American International Confederation of Free Trade Unions (ICFTU) and other American international organisations. These unions included the MPCA, the Post Office Workers Union, the Mineworkers Unions and the Clerical and Commercial Workers Union. By 1959, some leading members of these unions were sent to the United States to attend training courses arranged by the American Institute of Free Labour Development (AIFLD), an organisation headed by powerful and influential American businessmen. As part of their training they were indoctrinated in anti-communism and were even trained in methods of political subversion with the ultimate aim of destabilising the PPP Government. Shortly after, there began a steady stream of American trade unionists to Guyana, and some of them were openly involved with trade unions and political parties which opposed the PPP Government. At least two of these persons were later named as agents of the Central Intelligence Agency (CIA).
With the formation of the pro-capitalist United Force (UF), the country also saw an increase in visits by American anti-communist provocateurs who also funded opponents of the PPP Government. Some of these persons were members of the US-based Christian Anti-Communist Crusade who travelled all over Guyana to hold meetings and to distribute their anti-PPP propaganda. The members of this organisation also provided support in different forms to the pro-UF group calling themselves the Defenders of Freedom who attempted from time to time to break up PPP political meetings and who agitated for the retention of the control of primary schools by Christian denominations.