CONFIDENTIAL

assistance. Both have substantial control of their

internal affairs,

.

In the Bahares the unexpected victory in January of the Progressive

Liberal Party (representing the majority coloured community

the ratio is 5 : 1) has removed the threat to internal

security which their defeat might have brought.

The new

Government has so far showed no disposition to pursue

extreme policies but there may be errors due to inexperience,

since few of its members have ever served in a Legislature

before.

When in opposition, the Progressive Liberal Party

attached the then Bahamian Government for allegedly per-

mitting American ganster interests to benefit from gambling

in the Bahamas. Since assuming office they have set up

a Commission of Inquiry of outside experts to start work

in Nassau on 13th March.

The ratio of coloured to whites in Bermuda is 7:4,

as against 5:1 in Bahamas. A new constitution for Bermuda

was agreed at a London conference last November by moderate

leaders of both communities. The more extremist section

of the coloured leadership who are dissatisfied with the

constituency arrangements reached at the conference may be

encouraged by recent events in the Bahamas to pursue racist

policies. On the other hand some of the whites, who over

the past few years have gone along with liberal developments,

may now have second thoughts about the proposed constitut--

ional changes.

11.

The smaller Caribbean Dependencies

These urgently need more help to assist economic

development.

Most of them have tourist potential, and

some tourist development is indeed beginning. But we face

the steady expansion of American (and some times Canadian)

investment, so that the incongrous position may well arise

in which we have constitutional responsibility for largely

Americanised areas. The change of government in the

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/Bahamas

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