-GlNANA'S GOIDEN AGE:

THE DIVERSIFICATION OF THE ECONOMY OF BRITISH

GUIANA, 1880-1930

by

David Granger

The years 1838 to 1938,· constituted a century of continuous change and

crisis in the economic history of British Guiana. i During that era, the liberation of
over 80,000 ex-slaves from the Apprenticeship System, and the entry of over
340,000 2 Asians, Africans, Europeans and West Indians into the economy under
the Indentureship System, drastically altered the demographic composition of the
Colony, laid the basis for a large free populace and transformed the economy. Re-
current crises and rising competitiveness in the international commodity markets
triggered small booms and big depressions 3 which fractured the monocultural struc-
ture 'of the Guyanese economy; they initiated a chain of events which cre·aied new
spatial patterns of land use, new avenues and institutions of enterprise, and new
modes of production.

It is in the context of such internal change and international crisis in the

nineteenth century that the economy of Guyana must be examined. For about fifty
years, from 1880 to 1930, several factors combined to intensify the rate and direc-
tion of change. This paper seeks to discuss the major attempts made to diversify the
economy, largely between 1880 and 1930, in order to ascertain their causes and to
determine their extent. In attempting to account for these economic changes, the
paper argues that the challenge to the traditional sugar economy by a new diversified
economy was made possible mainly by an indigenous middle class. This class in-
creased its political influence in the colonial polity as ? result of constitutional changes
which challenged the planters' control of colonial resources through the legis]ature.
By 1928, when a relatively restrictive constitution was introduced to limit the politi~
cal power of the Creole elite, the thrust of diversification of the non-sugar economy
was blunted and many of the new activities went into decline.

To make sense, economic development and diversification must be seen as

32
.....:.....:. '• ~: ·. ,. ....... ~ .~ ~ ...... - •. -:-..~:· · 1.,. '' I ~:, '"
 more than mere short-term increments or quantitative alterations in the volume and
variety of economic o~tput. Economic development is taken to be "... a ·proce~s
whereby the material welfare of the people of a ... country is improved consistently
and substantially over long periods of time. "4 In the same way, economic diversifica-
tion_should be regard as ?1- process whereby the monocultural structure of a typical
plantation economy could be significantly modified by the cultivation, extraction or
manufacture of a variety of commodities. -In diversifying its economy, therefore, a
country could avoid sharp or sudden changes in revenue which might accompany
the fluctuations likely to occur by producing for a single market, such as Britain.
Equally, it could achieve a real improvement in the distribution of income among the
majority of the country's people and make a permanent impact on their livelihood.
• .. • !

Historically, Guyana has been described as a plantation economy. This plan-

tation mode of production was characterised by a speculative outlook, a low level of
investm~nt and technology, the high specificity of capital, production ·for export to
the WR~id market, absentee ownership and the drain of surplus which superseded
reinvestment in the Colony. 5 Such a mode of production prevented the_emergence
. of a free, local market which c_ould rival the export ·economy. In effect, Guyana was:
_.., ..0 : I ' ' ~ •• • 1 •

... little more than a geographical extension of the British economy

with the bulk of its revenues flowing directly out of the colony in the
form of remi~ed profits, interests on borrowed capital, rent and pay-
ments for externally supplied estate inputs. 6

The idea of economic diversification, therefore, should be seen on the one harid,
against this backdrop of preserving the plantation mode of production of sugar for
export and, on the other hand, as aiming at the objective of building up a non-sugar
sector to satisfy domestic needs. Given the limited labour and, to a lesser extent,
land .and capital resources of the Colony, the emergence.of rival sectors implied that
there would be fierce competition within the local economy. To all appearances~ this
competition intensified with the threat to sugar during the 'Great Depression' in
Bri.tain and declined, to some degree, about the time of the 'Brussels Convention' in
1903.
. ..
The second phase coincided with World War l during which Britain under-
went ?nother depression; it ende~ during yet another 'Great Depression' of 1929,
soon after Guyana reached a level of con~titutional an~ economic stagn9tion. The
gist of the argument of this paper is that, during these two phases, the domestic

33
 -· ···~-· -· ·--· ' :.... :.~ .

diversification process was dependent, to a great degree, on the performance of the

plantation-export economy, which, in turn, was susceptible to external shocks caused
by falling commodity prices. Once stability was restored, the diversification process
seemed to falter.

In the early years after the liberation of Africans from the Apprenticeship
System, and later when European and Asian labourers were freed from the
Indentureship System, a free peasantry had started to develop as the advance guard
of diversification. That free peasantry collided with the unfree plantation: "... where
one was strong the other was weak, and the plantations' strength depended mainly
on sugar. "7 In British Guiana, as elsewhere in the British Caribbean, the plantation
was more than an economic system of commodity production; it was also a political,
social and cultural system of domination in which a small group of British officials,
planters and managers held sway over a large group of non-British labourers. Al-
though some planters were ruined by the changes which took place in the industry in
the middle of the nineteenth century, sugar was still regarded as the greatest poten-
tial sour~e of profit and many planters did remain, determined to prosper. The
planters, rightly or wrongly, consi_de~ed their success, or survival, as depending on
their monopolistic control over the factors of production, particularly tractable labour
and empoldered land which were always in short supply in Guyana.

The lab~urers longed to escape from the harsh regime of plantation disci-
pline and the relentless cycle of planting and harvesting the sugar canes, and preserv-
ing or extending the arable land; this meant quitting the fields if they had a choice.
The ambitions of the planter-c.lass were therefore invariably in opposition to the
aspir~tions of the labouring class. It-was this underlying antagonism which governed
planters' approach to any significant form of economic activity, other than sugar
cane cultivation, which was likely to compete for scarce labour and land.

The reasons, the rate, and the results of diversification, and indeed all other
major economic activities in th~ Colony during this period therefore, were regarded
as aspects of the rivalry with sugar, sugar planters.and the plantation system. Para-
doxically, it was out of the implanting of a large 'immigrant population, installing an
oligarchic constitutional order, and preserving the monocultural economy of sugar
that
.
the_strongest reasons for diversification emerged.
.

· One of the most obvious factors which facilitated diversification was the geo-
graphic nature ?f the coastland. Despite its great extent, there were severe artificial

34
and natural obstacles to access to the land and the success with which it could be
used. The perennial problem of protection from the sea, and the recurrent cycle of
drought and flood, 8 demanded a complex network of dams, dykes, kokers and canals
which required skilled engineers for ·their construction, a centralised authority for
their management and. enormous expenditure for their maintenance. They could
not easily be altered for other purposes, and the cost and conditions of purchase of
such improved lands were made deliberately prohibitive. These were all beyond the
resources of the impoverished peasants, many of whom were forced to seek new,
but less fottile, areas·further away from the coastal markets. There, they proouced
goods and crops whk:h did not demand the same degree of investment and manage-
ment as sugar, if only to survive. 9 . This:was·,("push' :factor away from·the coast and
from sugar; they wer~ obli$ed'to 'diversify ord.ie: ; :· > .·. . ..

Another factor was the demographic transformation of Guyana. One of the

chief consequences of the termination of Apprentice~hip was the accelerated grovAh
of villages:

Labour was free to move, free to choose between residence upon the
old plantation or settlement upon new land, free to use its time upon
plantation land, or upon its own plots,.. free to bargain for wages in
exchange for its own services. 10

Within the dramatic decade (1838-1848), 44,456 ex-slaves bought 15,462.5 acres
of land at a cost of $1,038,000. 11 Secondly, and as a consequence of the first, there
was a significant shift of population from the plantations to the villages, a sudden
surge in wage labour, and a significant plunge in the relative size of the export sector
work force, from 88 per cent to 42.6 per cent of the empl'oyed population:12 Thi!rdly,
there was relatively large-scale immigration of indentured labourers fror)i Europe,
Africa, Asia and the Westlndies. As soon as the immigrants ' short contracts ex-
pired, many chose to remain In Guyana, but not on the plantations; they decided, or
were forced, to fend for themselves in new occupations. Within ninety years, from
1841to1931, the population trebled from 98,154 to 302,585. The land had to
provide a living for over 200,000 more petsons. 13

This demographic surge led to pressure on useful lands as farms, settlements,

villages and towns were founded along the coastland. It -also led to occupational
differentiation, as people pursued diverse economic_interests. Most of all, these
movements had an expansionary effect on the growth ~f the internal ~arket by

35
 ' '. • • ,, .... .• ·~ •• ·~ , ..... ,! .. ••• .,. ; ., " .....c.;:...~ ..... ; .. ,_, .

producing substitutes for imported consumer goods, by extending the system of

distribution with travelling pedlars and petty shopkeepers, by expanding the money
economy through increasing the level of estate wages, and by creating basic infra-
structure in the form of the construction of houses, churches, shops, bridges and
roads. All of these activities stimulated the diversification of the economy.

. Deriving from this demographic factor was the element of ethnic diversity. In
the pursuit of their commercial self-interest, the large non-planter majority of the
population embarked on new areas of endeavour. Between Emancipation in 1834
and 1891, about 228,800 immigrants entered Guyana, of whom fourteen per cent
were (Madeiran) Portuguese, six per cent were Chinese, six per cent were Africans
and seventy-four per cent were East Indians. 14 The Portuguese, who started coming
from as early as 1835, quit the fields as soon as they could and, by the 1840s, took
over dominance of the retail trade from the Africans and even challenged the bigger
merchants in the wholesale business. As a relatively cohesive community, they be-
came a dynamic entrepreneurial element not only in commerce but also in farming
and manufacturing. The Chinese, who came from 1853, followed suit, and after a
.shaky experiment in land settlement, became.entrenched in the commercial sector.
Many of the East Indians who left the plantations remained in agriculture, but pro-
.ducing non-sugar commocHHes such as rice, coconuts and cattle on .a comm.ercial
. scale. Amerindians were increasingly marginalised from the plantation economy,
but were involved in the non-sugar economy, where they were employed for their
skills in logging, mining and river navigation, and as guides in the hinterland. Afri-
cans spread most widely across the coastland and hinterland. Most remained as
peasant farmers in the rural areas, but many moved into urban occupations in the.
service trades or as skilled artisans, and pioneered the development of hinterland
settlement and employment. t 5 The sundry origins of these people, their diverse
interests, traditions and skills and their occupational differentiation were an impetus
to the diversification from the pre-existent monoculture.

There were also constitutional and political reasons for economic change.
Up to 1891, the control of the colonial government rested largely with the sugar
planters or their representatives, who were ensconced in the College of Kiezers, the
Court of Policy and the Combined Court. They used their power to safeguard their
own interest, which was the cultivation and ~xportation of sugar, from which they
earned their profits. They opposed attempts to diversify the economy on the grounds
that labour and other factors of production would be diverted away from sugar.
Under pressure, both from the emergent Guyanese middle class and the British

36
..............,~~.•":lo.··-·· l!f,....~ ........
~· ·~ .... ,.••:.. ! ... . .
Government, constitutional reforms were introduced in 1891 16 which loosened the
political grip of the planters on the apparatus of the state. The gradual infiltration of
representatives of the new indigenous professional elite into the legislature was able
to bring about the relaxation of restrictive controls over Crown lands, 17 thereby facili-
tating occupation of land for farming and cattle-rearing on the coastland, and for
logging and mining in the hinterland.

The constitutional order of the day was the main determinant of the distribu-
tion of power since the planters, who formulated policy in the Court of Policy, also
influenced fiscal policies and dominated the statutory boards which regulated public
works. 18 In this way, they impeded activities which hindered, and improved the flow
of funds to activities which helped, sugar production. The capture of political power
through constitutional reform was, therefore, a prime objective of non-sugar inter-
ests during the last quarter of the nineteenth century. It would have been impossible
to pursue any serious programme of economic diversification in the face of the
planter opposition without acquiring a secure platform of political power. Th~ 1politi­
cal victory of the new business elite over the old planter elite was therefore one of the
reasons for economic diversification because it broke the opposition to change, opened
access to land and allowed greater mobility to labour. ·

The logical consequence of control of the legislature was the capacity to

make laws which reflected the class_interests of the lawmakers. One _of .the main
causes of the demise of the African Village movement hac;I ,been the 'legislat~ve en-
circlement' 19 engineered by the planter elite in the Court of Policy. There,_the law
was used methodically as a weapon of coercion, by means of various fiscal devices,
to obstruct the acquisition of land and the mobility of working people.20 Hence,
once constitutional change had been effected, and political power assured, some of
the legal obstacles erected by the planters, particularly in relation to the sale of Crown
lands and the inequitable distribution of taxes, were dismqliltled.

A variety of social factors facilitated diversification. In particular, the intro-

duction _o,f compulsory primary education· in 187621 accelerated. the acculturation
process p_mongst the polyglot immigrant community and aided their assimilation of
new techniques and technology. It is not without significance that each extension of
the electoral franchise, and the adoption of technical innovations in industry or agri-
_culture, followed educational advances. In addition, the sgveral social, professional,
political and religious institutions which emerged tended to reinforce ethnic or social
particularism. This led to the eruption of political agitation, ethnic conflict and labour

37
.... ~-;:_ ...-:.- ,.
unrest on the one hand. 22 They also fostered the formation of ethnic-based land-
settlement schemes, limited liability companies and other business groupings which
eroded th~ monopoly control of the old planter elite and contributed to diversifica-
tion, on the other hand.

Technological improvement stimulated economic diversification in several

ways. New equipment and more efficient processing techniques introduced into
sugar factories released many workers for other employment. 23 Inventions such as
the telephone, telegraph and electricity and improvements in transport such as the
railway and steamer, demanded new skills and provided new occupational opportuni-
ties. The industrial progress of Europe and North America created markets for
hitherto unexploited commodities such as rubber, balata and bauxite. 24 ·In order to
satisfy the needs for these new skills and commodities, there had to be a shift away
from the narrow limits of the monocultural economy.

The economic depression in Europe was probably the single most important
and immediate reason for diversification. There were two aspects - international and
internal. In the first case, Britain's population and industrial capability had made it a
voracious consumer of raw material from the underdeveloped areas of the world. In
~ts .shift toward free trade, however, Britt:1.in all but stripped away the preferential tariff
under which the British Caribbean sugar industry enjoyed a privileged, protected, if
not prosperous, existence. Caribbean cane sugar gradually lost its share of the
market during the second half of the nineteenth century to both the cane-sugar
producers from tropical areas (such as Brazil and Cuba), as well as t~ the beet-sugar
producers of Europe (such as France and Germany). 25 In the second case, the main
internal repercussion of the international glutting of the sugar market was that prices
collapsed in 1884. 26 The sugar industry went into recession and was forced to
retrench resources. Investment was curtailed, land became idle, labourers were laid
off or had their wages reduced, production fell and the importation of foodstuff and
other goods had to be cut.

These reverses all served as a 'push' factor away from sugar and the planta-
tions. In order to keep indentured labourers close at hand, rationalise their reduction
in pay, obviate the cost of repatriation to India and obtain cheap food for them, three
devices were employed by the planters and the Government. Firstly, abandoned
plantations were bought, partitioned into lots as land settlement schemes and sold
cheaply to Indians. Secondly, exhausted 'front lands' were leased to Indians to grow
crops. And thirdly, as a result of these measures, intensive paddy cultivation bec~me

38
"; .
·· established as a major ·source of staple food production and a manifestation of agri-
cultural diversification in the Guyanese economy.

The final important reason for diversification was the opportunity afforded
by the conjuncture of discoveries in the second half of the century. They furnished
the 'pull' factor of labour into other industries, just as the depression furnished the
'push' factor out of the sugar industry. The chief discovery was that of gold, 28 which
attracted new classes of investors, owner-managers and labourers, provided a vall;l-
able export commodity, stimulated the rise of a variety of small market-oriented
industries {such as foodstuff and transport), and opened the way for other forest
activities. During this time also, the revelation of the usefulness of balata (1859), the
discovery of bauxite (1896), and the international demand for greenh~art logs (c.
1850s) all pointed to the possibility of exploiting local resources, establishing export-
oriented products, and further diversifying the economy.

. Of these reasons, it was the collapse of sugar prices in the mid-1880s which
did the greatest damage to the economic dominance of sugar and the political posi-
tion of the plantocracy. The crisis convinced Guyanese of all races and classes, and
even the British Government which appointed a Royal Commission, 29 of the danger-
ous folly of relying too heavily on. a single crop for their subsistence. The eris.is
·· .,. _ ,. · accentuated the social and political ·cbntradictions within the society, acc~lerated ~he ·
movement for constitutional reform and aggravated the confrontation be~~~~ the
.
largely expatriate planter {upper) class and the indigenous mercantile and jfrof?S-
' ; .. ·. ' f .J '

sional ,{(Diddle) class. 30 In short, the competition between the sugar and the·. non-
sugar sectors of the economy for land, labour and capital was exacerbated. There
was, the~efore, not one single reason, but several reasons, why economic diversifica-
tion was sought. ·

In some measure, it was the outcome of the struggle between the two elites
which would determine the degree of that diversification over the next half-century.
Economic diversification extended into several service and productive areas of activ-
ity. Some activities were supportive of .the economy, others were directly produc-
tive. They all developed side by side, hqwever, and should be seen as separate
components but of the same process.

The most elemental change was the rapid expansion of administrative ser-
vices and public utilities which themselves were the harbingers of economic tran sfor-
mation. Prior to Emancipation, slaves were privately-owned and thus were the re-

39

• - ·, L.,·.. .~ - .~ .... .. • •
 '"

sponsibility of their masters; since they represented over eighty per cent of the popu-
lation, Government's responsibility was confined to a small number of persons. Af-
ter Emancipation, however, Government became charged with responsibility for law
enforcement, administration of justice, welfare, health, 31 education, and later, a vari-
ety of public works such as the pure water supply, sewerage and sea defence systems
for the entire population. There was also need for coinage to make payments of
wages of the expanding labour force and for postage stamps to facilitate local and
international correspondence.

These services and utilities furnished the foundation and framework without
which other for ms of economic activity could not take place efficiently. They were
so complex and costly, and required such a level of cooperation and expertise, that
they could be undertaken only by a competent central authority such as the Govern-
ment. The immediate economic consequence was a sudden surge in central Govern-
ment expenditure which increased fivefold from 1833 to 1842. 32

Another area of innovation and diversification was in communications and ·

transport. In communications, cable messages were exchanged between Georgetown
and London in 1871, the telephone was introduced in 1884 and wireless telegraphy
in 1909. In transport,. the .first railway (East Demer:ara) was opened for· traffic in .··~
1848, 33 the Georgetown electric tramway in 1901, and the c6astal steamer service
and aeroplane flights were inaugurated in 1913. A network of roads - main, branch
and 'village and estate - was developed, and fair-weather hinterland roads were opened
in the North to Wanaina, in the South to the Rupununi and in Central Guyana, to
Kangaruma. 34 The economic impact of such infrastructure was the improvement of
access to information and to new areas. It was important enough for entrepreneurs
of hinterland activities to demand the equitable distribution of expenditure on similar
services _as the coastland enjoyed. 35

An important area of diversification was in building construction, especially

in wood, which reached its apogee. Almost all of Georgetown's most impressive
edifices - the Supreme Court (1887), the City Hall_ (1889), and St. George's Cathe-
dral (1892) - which added enduring elegance and_grace to the urban skyline, rose
during this era. They called forth new professional expertise in architecture, engi-
ne~ring and craftsmanship and stimulated logging and sawmilling enterprises by their
use of, and demand for, local woods. 36 The growth of villages and towns, and the
expansion of construction in wood, therefore extended the scope of economic diver-
sification.

40
 Another area was that of commerce, and the ancillary wholesale and retail
trades. The expansion of the free population and the creation of a wider domestic
market encouraged the demand for locally-produced food as a substitute for imports.
Initially, the value of imported food, drinks and tobacco fell. 37 The importation of
foreign clothing and other commodities, however, continued and ·swelled the inven-
tories of consumer goods.avai.lable to the public. As a result, shipping increased and
brought about a rise in th~ number of warehouses, shops, markets, hucksters and
pedlars. Economic diversification was achieved by the increase in the variety of
employment opportunities of a greater part of the population into the money economy,
·the utility of the foreign hardware imported, and the productivity of local farmers and
artisans for the market. On the other hand, the continued importatio.n of some
items of foodstuff hampered local production of substitutes and limited the exte~t of
diversification.
. '

There were major changes in the availability of banking services; credit, capi-
tal and investment finance. The 'Colonial Bank of the West Indies' and the 'British
Guiana Bank' had been granted their charters since 1836 and were well .~stablished.
As a result of instability in agriculture, they were expres~ly prohibited from provid_ing
credit to such enterprises, particularly sugar.38 Fire and Life insurance sei"Vi2es.had
developed in response to the frequent and devastating fires to whkh .the wooden
buildings of Georgetown were often subject. 39 . They too became reservoirs of capi-
-tal.
. ; .
The_money accumulated by the banks and insurance companies, · ~owever,
_was used only to a limited extent for investment in productive industries. T~_e .bulk of
their capital was tied up in bonds and deposits. 4° Capital for business credit was
precarious, and in the highly speculative atmosphere of nineteenth-c~ntµry
' ; . .
'
Guyana,
credit Wqs granted for extremely short periods.of sixty to ninety days, 100 ~hart for a
satisfa.ctory .return on investment, and precluding long-term enterpri~e. A,s a re~ult,
when principal. importers demanded cash .payment for goods, small.dea~ers would
tumble into ba~kruptcy. This had the effect of hindering the develOpment of ·new
industries and limiting the ext~nt of diversification. "

The most successful field of diversification was in farming and, to a lesser

degree, in livestock-rearing. Six crops {apart from sugar-cane and rubber) were grown
with some success - rice, coconuts, cacao, coffee, citrus (limes in particular), and
ground provisions. Further attempts at diversifying farming by growing cotton, kola
nut, and nutmeg on a commercial scale, yielded very indifferent results, but fruit,

41
 tobacco and ginger survived on some small farms. 41

Several factors favoured the few crops which flourished: they were all ori-
ented to the export market; they were grown on lands which had formerly been used
for sugar-cane and therefore had improved irrigation and drainage; labour had easy
access to the fields, and the level of capital investment was low. On the other hand,
production was hampered by poor selection of sites and soils (for example, the heavy,
wet conditions on the coast were unsuitable for the cultivation of cacao and coffee),
poor transportation to the market from outlying and riverain areas, and the prolifera-
tion of plant diseases due to ignorance of new crops or lack of research or resources
to deal with them. 41 At another level, some commodities such as cotton, coffee and
rubber were produced at too high a cost, and in too low quantities, to compete
against producers such as Brazil and the U.S.A., on the international market. Fur-
ther, once the local sugar industry recovered from the recession~ it was able to restrict
the transfer of redundant labour and land to new crops, and tried to regain ground
lost to other crops.

The predicament of livestock-rearing demonstrates the difficulty of diversifi-

cation in the shadow of the sugar estates. Most of the animals were reared as
.' appendages to some other form of farming, such as paddy cultivation, where they
could be grazed after the harvest but, while the paddy grew, the animals had to be
kept away, frequently in water-logged fields 'aback', severely affecting their health
and worth. Livestock made a breakthrough both for territorial and commercial diver-
.sification in the Rupununi savannahs. But here again, inefficient husbandry, inferior
pasturage and the long distance from coastal markets impeded the growth of this
enterprise. 43

Another enduring field of diversification was in forestry, where logging was

~~e most important activity. Timber was established as an export industry as early as
the 1850s when the construction of canals, piers, ports and docks in the industrialised
countries_of the world created a demand and outlet for greenheart. 44 The local
building industry also provided good markets and, by the 1880s, there were already
two steam-powered saw mills operating to meet those needs.

. Balata production enjoyed a brief florescence after samples were sent to

London in 1859 and its gutta percha qualities were revealed. Three years later,
20,000 lbs. were being exported; but the fledgling industry was plagued with an
_'epidemic of mismanagement' 45 caused by crude bleeding and careless preparation

42
of the product. Rubber fared no better, despite a brief boom; the indigenous species
were found to have a low commercial value. Although an attempt was made to
switch to the more prolific Hevea .Brasi /iensis grown successfully in the Amazon
region, 46 local output could not maintain a profitable foothold on the foreig~ market
which was flooded with cheaper Brazilian rubber. Other forest products, such as
gums and nuts, 47 were collected in small quantities but never became established as
major exports.

The earliest attempts at industrialisation were in manufacturing and milling;

the latter was an adjunct of agriculture, namely in sugar cane, copra and rice milling,
and of forestry in sawmilling, and reflected a small degree of technological advance-
ment. Commercial manufacturing achieved some measure of import substitutism
and, by 1930, there were already aerated water bottling plants, biscuit and bread
bakeries, boot factories - one on the East Bank and one on the West Bank, Demerara
- a soap factory, a castor-oil factory, a tannery, distilleries, a woodworking factory,
chemical works and plants for the production of candles, cigars, citrate of lime, ice
and macaroni. 49 The bulk of manufactures was consumed locally, but a few items,
such as coconut oil, citrate of lime and hides were exported.

Mining wa?..?,n .almost entire_ly new field . The, -~~ig~tes.t. spot b~lqnged to
gold, the discovery of which was first announced in 1863 in the Cuyuni. Commer-
cial mining was sporadic but a real gold rush began in the 1890s, the decade 1893-
1903 being Guiana's 'golden age' of mining. 50 The major portion of production
came from placers worked by individuals or small groups of tributers. Capitalists
formed several companies and introduced quartz mining (1890), hydraulicing (1902)
and dredging (1906) techniques. In 1890, the discovery of diamonds was also re-
ported and extraction took place alongside gold mining; it is therefore possible to
speak of gold and diamond mining as a single industry.

The economic importance of these precious minerals was enhanced during

the 'Great Depression' as local banks were able to use gold as a stable medium of
exchange for com.modities from Great Br_itain. 51 Gold also became the basis of the
wealth of some members of the middle class and a significant area of employment of
African labour. As with other 'bush' activities of this period, however, goldmining
was. a poorly-managed business, despite the big profits of the boom ye<;us. The. cost
of fuel to operate mechanical _equipment rose; the.~anger and difficulty of pe.n~trat­
ing further into the bush attenuated the frail transport and logistical resources; labour
remained seasonal and itinerant, and capital investment was low and speculative,

43
 seeking high returns in short periods. In addition, when it seemed that the sugar
industry was recovering from its depressed state, new Mining Regulations were
intrcxiuced in 1905 which severely restricted the activities of the tributers. 52 As a
result of these factors, production declined and, by 1930, had returned to the level it
had been at forty years earlier.

The mining of bauxite started after the registration and establishment of the
Demerara Bauxite Company (1916), a subsidiary of the Canadian Northern Alumi-
num .Company. The mineral was discovered at Akyma (1896) and output rose venJ
slowly because of the backward technology. At first, work was done with picks,
shovels, wheelbarrows and donkey-carts. 53 Exports reached 4,199 tons by 1918
and by 1920-21, pn;>duction rose to 42,000 tons. [n the post-war depression of the
late 1920s, over two-thirds of the workers were laid-off and output stagnated until its
recovery during the Second World War. The industry, nevertheless, became well-
established during this period.

Historically, the diversification of the economy of British Guiana started in

the 1850s. The process moved very slowly because of the strength of the sugar-
export economy, the power of the planter class to prevent factors of prcxiuction
·· from being moved out of the sugar sector, the absence of an entrepreneurial class to
promote new enterprises and the lack of knowledge or rrieans to exploit previously
underutilised resources.

By the Il}id 1880s - 1890s, all this had changed. Sugar exports had been
reduced and prices had fallen in the crisis of 1884; the. constitutional grip of the
planter class had been loosened by the reforms of 1891, and redundant land and
labour could more easily be deployed to other fields ; an articulate middle class had
emerged, and inventions and innovations from industrialised countries and the dis-
coveries of deposits of natural resources in Guiana made commercial exploitation
possible.

The diversification process had three prin~ipal effects on the economy of

British Guiana. These were: the creation of an indigenous business elite and the
reinforcement of the trend towards an ethnic division of labour; the consolidation of
a landed peasantry and the opening up of the hinterland; and the formation of a
large, free domestic market.

Many Portuguese and Chinese went into the capitalist strata of business, in

44
 insurance, commerce, manufacturing and in the formation of limi_ted liability compa-
nies for mining and the extraction of for est products. Many Africans became profes-
. sionals or entered the service trades. They joined the small but growing public
-Jil · service in jobs such as clerks and policemen or became artisans in urban services and
trades; with the Amerindians, they also provided the main labour force for mining
and the forest industries. Many East Indians became entrenched in rice and coconut
cultivation and cattle-rearing on the coastland.

The extensive .hinterland was penetrated, though not effectively settled ex-
cept in a few spots, by gold-miners, loggers, and balata-bleeders. Tenuous commu-
nications were established with the Rupununi; coastal steamers crossed the estuaries
of the great rivers, and aeroplane flights were started.

The value of non-sugar goods exported from the Colony soared. The do-
mestic market was enlarged by the increased production, and distributive trades car-
ried goods to all parts of th~ Colony.

The extent of this economic diversification could thus be measured by the

vast area under cultivation and the variety, value and volume of goods which Guyana
became capable of producing and ·exporting. The evidence shows that between
1903 and 1923, acreage under rice, coconut, cacao and coffee increased, while that
undersugar declined .. Although initially the exports of agricultural commodities gradu-
ally increased, towards 1930 (except for timber, rice and provisions), they all were in
a state of decline. The same is true for gold, though not for diamonds. 54 In the last
analysis, diversification was manifested in the changing patterns of land use, occupa-
tional differentiation and resource allocation in the col~ny. By 1930, however, in
the face of yet another world-wide depression, this time precipitated in part by the
stock market crash in the U.S.A., the diversification process had reached a plateau.

The diversification of the economy was the result of several factors which
had been held in check by the near-absolute powers wielded by the plantocracy in
the monoculturaleconomy under the system of slavery. The monopoly control over
labour was shaken by. the depression of the,l880s which forced the retrenchment of
resources. The monopoly production for export was broken by the collapse of Sligar
prices when the ,planters were obliged to encourage domestic production for con-
sumption. The monopoly of political power in the legislature was broken by the
Constitutional Reform of 1891. ·The monopoly of Crown lands was relaxed. 55 Out
of all this arose a new elite which sharpened the struggle between the closed planta-

45
 1 .

ti on export-economy of sugar and the open diversified economy.

During the first phase of this study, from 1880 to 1903, when the sugar~ v
sector declined, the production of gold soared and the diversified sector of the economy
became fairly. well-established. External market conditions for sugar improved in
1903 after the Brussels Convention, 56 but fell during the years of World War I and
finally started to rise again in the early 1920s, 57 probably in response to the restora-
tion of imperial protective tariffs. 58 During the second phase (1904-1930), with few
exceptions, many of the industries which had been established or reintroduced went
into decline or stagnated. The relative languor of the diversified sector could be
compared with the renewed vigour of the sugar sector. 59 It would therefore be useful
to draw some conclusions on the major factors which limited the extent of the diver-
sification of the economy of the Colony.

Some of the new industries and agricultural enterprises had been established
in the hinterland or in riverain areas which were relatively difficult to reach. The
construction of adequate infrastructure, particularly of transport and communica-
tions, was too costly to bear either by Government or the private companies which
were for med. As a ·result, access and delivery of produce became expensive and
UJ!reliable. .The further into the bush or upriver activities moved, the worse ·the
problems of logistics- became. Inevitably, many of these industries were plagued by
an epidemic of mismanagement. Workers were often required to function on their
own with meagre resources and without supervision; techniques of husbandry were
careless, if not reckless; the level of technology was low and professional knowledge
was scant. 60 ·

Despite the early establishment investment, finance institutions such as

banks and insurance companies, and th profits from the gold industry, credit to new
enterprises seemed to be Qf a limited 1and short-term nature. It was therefore unable
to sustain the large-scale, lorig-terny8evelopment of estate crops or new enterprises
which took longer to show retur11i on investment. In fact, in an era when the sugar
sector was being treated as an ofganized business activity, the diversified sector was
regarded as a speculative
.
venfure with 'mushroom, companies being for med and
/

collapsing into bankruptcy thereafter. Due to the instability of the war years, the
efficiency and size of larger low-cost international commodity producers, and partly
because of the small-scale, high cost and unreliable supplies of Guyanese goods
produced by 'hit-and-miss' methods, export markets could not be maintained ...

46
 Most of all, the opposition of the planter class to the development of the
hinterland and the emergence of rival industries never relented. As during the sec-
0 ond half of the nineteenth century, this economic struggle was waged vicariously
through the legislature. The result was that, in 1928, a relatively backward constitu-
tion was imposed on the Colony designed, in part, to safeguard the 'special interests,
of the sugar sector of the economy. 61 At this juncture, the political position of the
professional elite was weakened and the process of the diversification of the economy
slowed noticeably.

The local entrepreneurial elite itself was perhaps unwilling to look beyond
quick commissions and short-term investments, or unable to bear the bl:lrden of
major economic development. It did not have access to capital, technology, ship-
ping and overseas markets as the new transnational corporations had in the sugar
industry. The diversified sector seemed doomed to stultification after its 'beginner's
luck' ran out, and its initial investments were exhausted. By 1930, it was still specu-
lative in its outlook, primitive in its technology, and exploitative in its relations with
workers, just as ·sugar had been a hundred years earlier.

It could be said, therefore, that the diversification of the economy of British

Guiana ..up to 1930 was only a limited success. By the,end of this period, no single _
industry had been able to supersede sugar in terms of extent of land under cultiva-
tion, value of commodity exported, or size of labour force employed. The material
base of commodity production in the Colony nevertheless had been significantly
expanded, the domestic consumer market had been enlarged and the variety of
goods extended far beyon~ what prevailed fifty years earlier in 1880. Although
there had been sporadic fluctuations, and a general pattern of decline had already
become evident in the late 1920s, there was no complete collapse, abandonment or
reversal of the diversification process as a whole. It was clear that change had been
substantial and widespread over a reasonably long period of time, and the lives of a
significant part of the population of all races had been affected, if not improved.

_ By 1930, the drive towards diversification had slowed; there was disillusion-
. ment caused by economic distress which, later that decade, degenerated into violent
industrial disturbances and political dissatisfaction. Diversification had failed to de-
throne 'King Sugar' in the economy. Its enduring legacy, however, was to demon-
strate to posterity, the enormous but still unexploited physical potential of the Colony
and the y;ide scope of human endeavour and enterprise to create a broad-based, self-
reliant economy.

47
 NOTES
1. Guyana was known as 'British Guiana' up to 26 May 1966, when it became independent.
2. M.N. Menezes, The Apprenticeship System 1834-1838: A Leap in the Dai k. " History Gazette, 2, (1988),
8. The figures for emancipated slaves vary, one being as high as 90,000. But making. provisions for children 'W
and deaths, the figure of 80,000 is acceptable. See also, Dwarka Nath, A History of Indians in Guyana.
Second Revised Edition. (London: The Author, 1970), pp. 219-220. The figure 341,599 is unlikely to be
accurate since this was calculated from persons whose entry was recorded by the Immigration Department.
3. E.J. Hobsbawm, Industry and Empire: An Economic History of Britain since 1750. (London:
Weidenfeld and Nicolson, 1968). pp. 103 and 174. The entire period 1873-96 is referred to as the 'Great
Depression'; the second period 1912-38 was regarded as even more damaging to the British economy. Both
perioos signalled drastically reduced prices for raw sugar on the London ma1ket.· Since sugar was Guyana's
main export commodity, lower prices meant lower earnings.
4. George L. Beckford, ''Caribbean Rural Economy.'' George L. Beckford (ed.), Caribbean Economy (Kingston·
University of the West Indies, 1975), p. 78.
5. Clive Y. Thomas, Plantations, Peasants and State: A Study of the Mode of Sugar Production
in Guyana (Los Angeles: University of California, 1984), pp. 11··13.
6. Michael Moohr. The Economic Impact of Slave Emancipation in British Guiana, 1832-1852,' Economic
History Review, 25, 2nd. Series (1972), 589.
7. J.R. Ward, Poverty and Progress in the Caribbean, 1800-1960, (Houndrnills: Macmillan Publishers
Ltd., 1985), p. 32. I

8. Walter Rodney, A History of the Guyanese Working People, 1881 to 1905. (Kingston: Heineman
Educational Books, 1981), pp. 9-13, passim.
9. Jay R. Mandie, The Plantation Economy: Population and Economic Change in Guyana, 1838-
1960. Caribbean Edition. (Philadelphia: Temple University Press, 1973), pp. 22-23. Their main products
were food (ground provisions), and fuel (charcoal and firewood) . _
10. Rawle Farley, "The Rise of the Pea5ant;y_in British Guiana," Social and Economic Studies 2.4 (1954), 9.
11. ·Allan Young, The Approa.c hes to Local Self Government in British Guiana (London: Longmans,
Green & Co_ Limited, 1958), p. 23.
12. Moohr, 'The Economic lfT!pact of Slave Emancipation ... ,' p. 590.
13. · Ma'ndle, p." 47. These increases were due largely to immigration.
14. G:W. Roberts and M.A. Johnson, 'Factors involved in the Immigration and Movements in the Working Force
of British Guiana in the Nineteenth Century,' Social and Economic Studies, 23. l, (1974), 74.
15. Brian: L. Moore, Race, Power and Social Segmentation in Colonial Society: Guyana after
Slavery, 1838-1891 (New York: Gordon and Breach Science Publishers, 1987), p. 174 et seq. For
particulars on each ethnic group, see Mary Noel Menezes. Scenes from the History of the Portuguese
in Guyana (London: The Author, 1986), p,. 31, for the Portuguese; Cecil Clementi. The Chinese in
British Guiana (Georgetown: The· Argosy Company, 1915), p. 286 et seq., for the Chinese; Nath, pp.
199-208 for the East Indians; Ma·ry Noel Menezes. British Policy towards the Amerindians in Brit-
ish Guiana, 1803-1873 {LondQn: Oxford University Press, 1977), p. 196, for the Amerindians; and
Nonnan E. Cameron, The Ev,olu_tion of the Negro. Volume II (Georgetown: The Argosy Company,
1934), 61, for the Africans. There therefore emerged an ethnic-based division of labour which heightened
antagonisms amongst the Guianese populace, but also diversified the economy of the colony. See also Desiree
Khayum, 'The Labour Force in Georgetown, 1781-1881', HistQry Gazette, 18, (1990), p. 5, for an idea of
some of the occupations pursued by the urban working class. _,
16. Harold A. Lutchman, 'The British Guiana Constitutional Change of 1891 ',History Gazette, 40, (1992), p.
3. See also Tota Charran Mangar, 'Planter Class Power and the Struggle for Constitutional Reforms in
Nineteenth Century British Guiana,' History Gazette, 10, (1989), p. 12.
17. Michael Moohr, "The Discovery of Gold and the Development of Peasant Industries in Guyana, 1884-1914: A
Study in the Political Economy of Change," Caribbea.n Studies, 15.2 (1975), 65. See also f.n. 27, infr'a.
18. Rodney, p. 15. ' ·
19. Alan H. Adamson, Sugar Without Slaves: The Political Economy of British Guiana, 1838-1904

48

.. ,,. ... - • - · w~- -~ •--- --• ••""" _..._.,.,.,...,

 (New Haven: Yale University Press, 19 72), p. 57.
20. James Rose, 'The Taxation Policy of Sir Henry light, 1838-1848', History Gazette, 38, (1991), pp. 2-3.
21. Hazel M. Woolford, 'The Introduction of the Compulsory Denominational Education Bill, 1876', History
Gazette, 9, (1989).
22. There was serious friction between the Africans on the one hand, and the Portuguese, the Chinese and the
East lndians, as separate groups, on the other. During this time also, East Indian (1918), Chinese (1920) and
African (1922) ethnic Associations were established and political proto-parties were created. The Royal Agri-
cultural and Commercial Society, a planters' association, was formed (1844) and the Chamber of Commerce
was incorporated (1898). The British Guiana Labour Union was the first trade union to be registered (1922).
23. Richard A. Lobdell, 'Patterns of Investment and Sources of Credit in the British West Indian Sugar Industry,
1838-97' . Journal of Caribbean History, 4, {1972), 34. These included ploughs, boilers, steam en-
gines, hydraulic lifts and mechanical cane and megass carriers. See also Mandie, pp. 61-62.
24. These will be discussed later in this paper.
25. W. Beachey, The British West Indies Sugar Industry in the Late 19th Century. Reprint. (Westport:
Greenwood Press Publishers, 1978), p. 50.
26. Ward, p. 18.
27. M. Shahabudden. From Plantocracy to Nationalisation: A Profile of Sugar in Guyana .
(Georgetown: University of Guyana, 1983), p. 232. See also Adamson, pp. 258-259.
28. Moohr, The Discovery of Gold .. .' 61.
29. Great Britain, Report of the West India Commission (London: Her Majesty's Stationery Office, 1897).
Although this Commission recommended that the sugar industry should be saved from collapse, it also advo-
cated the development of the hinterland, and the diversification of the economy. by opening communications
and introducing new crops.
30. Francis Drakes, 'The Middle Class in the Political Economy of British Guiana, 1870-1928'. History Ga-
zette, 11, (1989), pp. 4-5. See also Moohr, ''.The Discovery of Gold ... " p. 65. The reason for· this confron-
tation was that the planters had invested in sugar and the professionals had invested in gold and other 'new'
products. -..~...... · ·· · •
31. Moohr, 'The Economic Impact of Slave Emancipation .. ', 592. As a result, Government had to build jails and
asylums and employ an entirely new and wide range of official personnel to carry out these functions. · ·
32. Ibid., 593.
33. A.R.F. Webber, Centenary History and Handbook of British Guiana (Georgetown: The Argosy
Company Limited, 1931), p. 224 et seq.
34. · British Guiana Handbook, 1922, p. 17.
35. Moohr, "The Discovery of Gold ... ," 66. It was realised then, as later, that efficient communications are an
essential prerequisite to any form of economic development in the hinterland of Guiana. The Balata Company
bought a seaplane in 1925 to reduce travelling time to its hinterland locations. See H .S. Burrowes. Fifty
Years of Flying in British Guiana . (Georgetown: Guyana Graphic, 1963), p. 5.
36. Rodney, pp. 94-95.
37. Moohr, 'The Economic Impact of Slave Emancipation .. .' 597~ ··
38. J. Van Sertima, The British Guiana Bank: Brief History.' Timehri, 3. Third Series (1913), 9. See also,
Lobdell, p. 37.
39. Webber, p. 270.
40. Adamson, p. 260
41. Edgar Beckett, 'The Minor lndustries,' Timehri, 2, Third Series (1912), 73 et seq.
42. Ibid., pp. 73-78. Most of the commercial crops were seriously affected by disease . Coconuts suffered from
'bud rot', cocoa and coffee were infected by the dangerous fungus called 'witch broom' which still existed on
old estates, and plantations were affected by 'moko' disease, for example.
43. Harry Everard Turner, The Rupununi Development Company Limited: The Early History.
(Georgetown: Autoprint. 1972), p. 9. Contrary to the claims by Moohr, 'The Discovery of Gold ... ,' 70, the
savannahs do not make ideal grazing lands.
44. Rodney, p. 92. There was also a local need for fuel (charcoal and logs) and for other products such as staves .
and shingles for roofing.

49
4[>. Gcorgr. C. Benson, 'The Balata Industry.' Timehri, 2, Third Series (1912), 8 1
46. F.A. Stockdale, The Indigenous Rubber Trees of British Guiana,' Timehri, 1, New Series (1912), 21.
47. British Guiana Handbook, 1922, p. 99.
48. Ibid. , p. 154. See also Khayum, p. 6.
49. Many of these items found their way overseas.
50. James Radway, History of British Guiana From the Year 1668. Volume III. (Georgetov.m, 1891-94),
217-227 passim. Vide Table 4 which shows the decline in the second phase.
51. Rodney, p. 98.
52. Alan Lancaster, 'An Uncor.quered Wilderness: A Historical Analysis 1919' (M.A. Thesis, University of Guyana,
1977). See also Rodway, 218.
53. Ralph Prince, 'Demba Completes 50 Years in Guyana·. The Chronicle Christmas Annual, 1966, p.
77.
54 Vide Tables 3 and 4 which illustrate inter alia the significant improvement in the export potential of the
colony of its agricultural and mineral commodities. Table 1 indicates the change in land use and Table 2, the
livestock population. The variety of exportable goods is listed at Appendix 1. It provides evidence of the wide
scale of commodities which were actually produced, although, admittedly, some of their quantities were paltry
and their prominence was transitory.
55. Moohr. 63-65.
56. Beachey, p. 165. This was an agreement among European producers to suppress bounties for beet sugar on
the one hand and to eschew preferential tariffs for cane sugar on the other
57 . Ward. p 47. See also Table on p. 9.
58. Ibid., p. 47.
59. Lobdell. 53, and Thomas, p. 24. During this period. the sugar sector in Guyana was taken over by large TNCs
which applied enormous capital, modern technology and efficient techniques to transform the plantations into
businesslike enterprises.
60. Turner. p. 9, and Benson, P- 81.
61. Harold A. Lutchman, Some Aspects of the Crown Colony System of Government with Special
Reference to Guyana. Mimeo (Georgetown: Critchlow Labour College, 1970), p. 23. ·'

APPENDIX 1
TABLE 1: ACREAGES UNDER CULTIVATION: 1903, 1913, 1923

SUGAR COCO- PRO·

YEAR CANE RICE NUTS CACAO COFFEE RUBBER LIMES VISIONS

1903 78.860 17,500 3,950 1,530 15,748

1913 72,685 33,889 14,177 1,863 3, 166 4,018 941 17,580

1923 57,8 14 34,965 22,970 1,903 4,096 2,080 800 11,924

TABLE 2: LIVESTOCK ON COASTlAND: 1914, 1918, 1923_

'
YEAR HORSES MULES DONKEYS CADLE BUF-FALOES GOATS SHEEP SWINE

1914 1,010 2,000 6,000 79,500 100 14,800 19,700 11,600

1918 1,002 2,359 5,332 77,108 176 11,136 20,611 12,532

1923 800 1,790 5,440 56,670 264 7,940 15, 130 11,134

50
TABLE 3: EXPORTS OF AGRICULTURAL COMMODITIES: 1900-1930 (BY VALUE-GS)
COCO- PRO-
YEAR TIMBER RICE NUTS CACAO COFFEE BALATA CITRUS VISIONS

1900-01 87,374 N.A. 1,340 2,444 - 94,007 N.A 809

1915 53.383 642,678 31,280 8.508 18,238 766,089 N.A N.A.

1930 139,647 1,090.385 1,845 N.A. 22,400 390,292 10,885

I 16,872
TABLE 4: EXPORTS OF MINERALS: 1903-1930 (BY VALUE-G$)
MINERAL 1902-1903 1906-1907 19i0-1911 1914 1918 1922 1926 1930

GOLD 1.789,587 1,532.266 946,7777 1,114,007 391,467 179,070 98,263 89,581

DIA- 97,710 32,627 29,573 87,196 164,230 3,859,357 3,300,952 1.431 ,364
MONDS

Sources: British Guiana, Annual Reports of the Heads of Departments 1880 to 1896 Administrative
Reports 1894 to 1930.

Appendix 2
GENERAL LIST of PRINCIPAL EXPORTS of DOMESTIC PRODUCE c.1917
Class I - Food, Drink and Tobacco. (6) Copra
( 1) Cattle, horned (7) Oils - Coconut
(2) Coffee, raw (8) Lumber
(3) Coconuts (9) Timber
(4) Lime Juice (10) Firewood
(5) Indian Corn or Maize
(6) Rice Class Ill - Articles wholly or mainly Manufactured
(7) Farinaceous Preparations (I) Molascuit
(8) Salt, fine (2) Charcoal
(9) Nutmegs (3) Citrate of Lime
(10) Bitters (4) Glue
(11) Rum (5) Oils - Essential (of Limes)
(12) Sugar, unrefined (6) Starch
(13) Molasses (7) Railway Sleepers
(14) Vegetables (fresh) (8) Shingles

Class D - Raw Materials and Articles Class IV - Miscellaneous and Unclas.sified

mainly Unmanufactured (1) Asses
(1) Diamonds (2) Horses
(2) Balata (3) Mules
(3) Rubber
Class V - Bullion and Specie
(4) Hides
(5) Bauxite (1) Raw Gold