Chapter VII: Part II: Student Reports (3)

The State of Zulia produces the best quality of Venezuelan cotton, due to the length of its fibre and because it is more advantageous when manufactured, but as the cloth industry in Venezuela is not intensive enough to warrant the classification of fibres, this advantage is not noticeable in the aggregate cotton trade of Venezuela. The cotton plant gives but one crop a year and requires to be replanted every year. At the present time it is estimated that $200,000 are invested in the cultivation of this product.

TONKA BEANS

These beans, which are exported from Venezuela on a large scale, have the shape of a large black almond and give out a delicious perfume. When dry their peculiar perfume develops still more and it is used as an odorous basis to make high grade perfumes, and to flavor tobacco. The bean is a natural product and needs no cultivation, as a general rule; it is gathered in the Tonka forests existing in the Amazon territory and the District of Cedeno, in the Venezuelan Guianas. Tonka beans are a staple of great value in the regions watered by the Orinoco River and its tributaries, and almost the entire crop of Venezuelan Tonka beans are exported by the way of Ciudad Bolívar.

The gathering process formerly in use brought about the destruction of the trees, but the Venezuelan Government has taken the necessary measures to prevent the trees from being felled as was formerly the case. The large trees now in existence are being protected perfectly. In the year 1913 Venezuela exported more than half a million kilograms of tonka beans having a commercial value of $727,800. One or several well organized companies with the necessary capital at their command would derive great profit from such exploitation.[10]

[10] Agricultural Year Book of Venezuela, 1913.

VANILLA

Venezuela produces an uncultivated vanilla plant called "_vanilla lutescens_," but that commonly known to commerce is the more aromatic kind called "_vanilla plantifola_." The cultivation of this product has not been fostered to any great extent. It grows readily in the rich soil of the States of Falçon, Lara, Bolívar, Anzoatequí and Zamora. No official figures are available as to the production, cultivation or export of this product, although there is a good opportunity for further development.

COCOANUTS

There are many cocoanut tree plantations in Venezuela, chiefly in the regions of Zulia, Carabobo, Bolívar, Barcelona and Cumaná. Cocoanuts are used for various reasons abroad and in the United States, therefore the cultivation of this natural product could be fostered so as to make it an article of export on a large scale and it would become a profitable investment not requiring a large capital. In 1913 there were invested in Venezuela in the cultivation of cocoanut trees $1,095,200.

INDIAN CORN

This product is successfully cultivated in all the States of Venezuela where it grows in every kind of soil, from the level of the sea to 2,800 meters above it. It thrives best, however, at an altitude of 500 to 1,000 meters. There are about 73,131 acres in Venezuela devoted to the production of corn, and the total amount raised is estimated at 150,000 metric tons. Special attention has lately been paid to the cultivation of corn, which is the real bread-plant in Venezuela, especially in the interior of the country, and a considerable quantity of Indian corn has been exported.

BEANS

Beans are also successfully grown in all the States of Venezuela and a great variety of them are produced. Those having the greatest demand are the "black beans." Their production not only meets the domestic demand but they have been lately exported in considerable quantities. They grow readily at all times of the year and are one of the principal articles of domestic commerce in Venezuela.

INDIGO

This product was introduced into Venezuela in 1777 and planted near La Victoria and later in many other places. The best quality was produced at San Sebastian. Due to the high price attained by coffee many years ago, the cultivation of indigo was abandoned. In 1902 the exportation of indigo amounted to 1,876,510 pounds having a value of $2,450,000.

This product has now sufficient demand in foreign markets to warrant the revival of its cultivation as a remunerative exportable commodity of Venezuela.

* * * * *

During the year 1917-1918 the products exported from the agricultural zone of Venezuela amounted to $10,400,000; in this zone there is now invested $46,600,000. A presidential decree of March 12, 1917, created an experiment station of agriculture, live stock, and forestry with a garden of acclimatization to be located at Cotiza near Caracas. Its purposes were stated to be:

The study of improved methods of cultivating the agricultural products of the country; the introduction, selection and distribution of seeds; experiments in reforestation; preparation of reports upon nature of soil and most adaptable crops from each region, with practical work for the training of agricultural foremen and forest rangers.[11]

[11] Memoria del Ministerio de Fomento, 1918.

Other purposes are:

To maintain circulating agrarian libraries, to promote expositions, to form nurseries of exotic plants, to introduce new agricultural machinery and implements, and to supply all possible information and assistance to the country.

In the following table the amount of capital invested
in Venezuela in the cultivation of its eight principal
agricultural products is shown.[12]

Coffee trees $16,000,000
Cacao 13,000,000
Balata and rubber 2,000,000
Cocoanut trees 2,000,000
Tobacco 2,000,000
Bananas 500,000
Cotton 400,000
Sugar cane 11,500,000
------------
Total $47,400,000

[12] Informe del Ministerio de Fomento, 1919, p. 44.

The following table shows the principal products exported from
the Agricultural Zone of Venezuela from 1917-1918,--weight in
Kilograms and values in Bolivares.[13]

_Products._ _Weight in kilograms._ _Value in Bolivares._

1. Cotton 3,067 4,930
2. Starch 248,801 104,307
3. Sugar 13,260,562 5,526,798
4. Cacao 20,280,865 10,603,372
5. Coffee 34,123,145 29,190,622
6. Bananas 377,636 58,205
7. Indian Corn 21,360,191 4,878,173
8. Brown sugar 5,440,551 1,427,161
9. Tobacco 297,579 324,436
----------- -----------
Total 95,392,397 B. 52,118,004

[13] Informe del Ministerio de Fomento, 1919.

THE FOREST ZONE OF VENEZUELA.

This vast region extends from the Gulf of Maracaibo over the mountains of Yaracuy, San Felipe, Aroa, Tucacas, San Camilo, Guayana and its territories, and from the untouched forest of the Trujillo and Barquisimeto mountains to the fertile woodlands of the State of Zamora.

The Forest Zone of Venezuela comprises about half of its territory; of this half, 98% is still virgin land, a fact which may be regarded as one of the principal hopes for the progressive future of the country. The Zone has an area of 795,640 square kilometers, from which over two thousand specimens were exhibited in Caracas at one time. From this immense region Venezuela can derive natural resources of unlimited wealth, when sufficient labor and capital are available, better means of transportation established, and more modern machinery and implements introduced.

The following figures show the division of the Forest Zone of
Venezuela:

Public Forest Lands 295,400 sq. kilometers
[14]Private " " 125,000 " "

[14] Informe del Ministerio de Fomento, 1919, p. 27.

The Forest Zone of Venezuela comes within the forest area of South America. Richest in quantity, and, probably in variety of vegetable life, is the well-known land of Guayana, with its vast forests, hot climate and heavy rainfall. Within this area the plants range from the alpine shrubs and reindeer moss found on some of the higher plateaux and hills to the bamboos and orchids of the river banks. The high timber trees grow fairly close together, and their spreading tops fifty, eighty, or one hundred feet from the ground, with the abundant hanging manes and flowering creepers, keep all but a feeble light from the ground; hence it comes that the undergrowth is usually sparse or absent, and progress on foot is comparatively easy.

Of all the forest giants of Guayana, "_Schomburgk_" is considered the most magnificent; the average diameter of the trunk is about three feet, and it seldom branches at less than forty feet from the ground. Its wood, dark red and fine grained, is said to be excellent for shipbuilding purposes.

_Caoba_, whose wood is very like mahogany in color, and a certain big tree called "rosewood," which it resembles, are notable among the timber trees. The huge _Ceibas_ have a soft, easily worked wood, excellent for the dugout canoes of the Indians. The equally large _Mucurutu_ or cannon-ball tree furnishes a beautiful but hard grained timber.

Two fruit trees whose products are well known throughout Europe grow in the regions of Guayana, the _Brazil nut_ and _tonka bean_ trees.

The gums and resins of Guayana include the balatá, copaiba-balsam, and rubber-producing trees, the latter chiefly varieties of _hevea_, while _cinchona_ or _quinine_, with innumerable creepers and trees possessed of medicinal or toxic properties are found on all sides. There are more than 2,450 known species of plants to be found in the Forest Zone and more are being added to the list daily; it is probable that in such an assembly there must be many of value as yet undiscovered and unused.

The forest plants and trees of Guayana also flourish in the Delta Region and in the forests bordering the Llanos of Maturin, but the vegetation of Northern Venezuela is generally different from that of the South. The great brown plain of the Llanos is beautified by small golden, white, and pink flowers, while sedges and irises make up much of the small vegetation. The banks of the rivers often support denser groves of _ceibas_, _crotons_, _guamos_, etc., and along the banks in front of the trees are masses of reeds and semi-aquatic grasses.

In the region of the Cordilleras many different types of vegetation can be found in the various zones. The very hot section has generally a heavy rainfall and supports thick forests, but along the sea coast there are barren stretches with only cactus, acacia, croton, and similar plants. In this region we have the plantations of cacao, sugar, bananas, plantains, maize and cassava, which are the staple foods of the inhabitants. The growth of cocoanuts is also encouraged. In addition, there are many products of the forests, chief of which are the dyewoods, and tanning barks, including logwood, dividive, mangrove, indigo, and many others. There is also a great deal of valuable timber in this region, the chief woods exported being mahogany and cedar.

In the cooler regions we find a mixture of hot country plants and those of the mountains. One may see in the same valley, within a short distance of one another, bananas, potatoes, sugar cane, wheat, yuca or cassava, peas, maize, cotton, cocoa and coffee, all flourishing, and a single orchard may contain guavas and apples, peaches and oranges, and a variety of other fruits; the garden adjoining will have a mixture of roses, carnations, violets and dahlias and many tropical flowers. Strawberries, mint, nasturtiums and other of our garden plants have been successfully grown in these mountain regions within 10 degrees of the equator.

The higher part of this region exhibits a great variety of plants peculiar to this zone. Along the mountain roads can be seen palms, screw-pines, and beautiful tree ferns, also cranberries, blackberries, ivy, quinine-trees, small bamboos, silver-ferns, and many other beautiful plants and shrubs. In short, here can be seen the greatest variety of color and floral scenery.

In the cold region of the Cordilleras the small woods of the temperate zone gradually die out, and toward the snow line we have the alpine grasses, heaths, and thick leaved, aloe-shaped plants which have lumps of resin clinging to their roots, and seem to take the place of pines, which are not found in Venezuela.

The value of the products of the Forest Zone of Venezuela exported during 1917-1918 was more than $1,800,000. The capital invested in the cultivation of this zone amounts to more than $2,000,000.

_Matthew J. Heiler._

THE CATTLE INDUSTRY IN VENEZUELA

This report is based chiefly on conferences and trips with Dr.
Martínez Mendoza, Director of the Agricultural Experimental
Station, and on notes which he very kindly furnished. The
following references have also been consulted:

"Venezuela." Handbook prepared by Dr. N. Veloz Goiticoa for the
Ministerio de Fomento.

The Annual Reports of the United States Consul at La Guaira,
for 1916 and 1918.

"Venezuela" by L. V. Dalton, 1918.

The article on "Venezuela" in the Encyclopedia Britannica has
been consulted.

Venezuela has an area of approximately 393,976 square miles and a population of over 2,848,121.[15] From these figures one may see that the country is very sparsely settled, and that the first requisite of a cattle country is met,--that of plenty of open land.

[15] Figures of 1917. Latest census is expected to show some increase.

The main occupation of the people is agriculture. Stock-raising is next in importance and promises soon to be the leading industry of the country. Yet, even though the industry is now important, it is developed to such a slight extent, in view of its possibilities, that the past history means little and statistics mean but little more. The wars for independence, internal strife, political unrest and a certain lassitude on the part of the people have greatly hindered the development of the industry in the past.

There exist no authentic source material or statistics covering the cattle industry in Venezuela. Only during the last few years has the Government succeeded in convincing cattle raisers of the importance of accurate statistics and led the way itself by beginning systematically to compile them.

The following statistics are, consequently, approximations and consist for the most part of rough estimates. They were obtained from the 1919 booklet of N. Veloz Goiticoa and were officially edited by the "Department of Fomento" and are, consequently, the most nearly correct and authentic which could be obtained and also the most complete.

Still, as stated before, it is not the past in which we are interested, so much as the future, and hence we shall merely quote the available figures and then dismiss them from further consideration.

_Number of Cattle in Venezuela._
1804 1,200,000
1812 4,500,000
1823 256,000
1833 2,437,150
1839 4,617,560
1847 5,503,000
1864 5,800,000
1873 3,302,670
1883 8,591,860
1894 6,345,560
1899 6,059,480

In 1919 it was estimated that there were only 2,600,000 head of horned cattle within the country.

The figures of 1915-16 for live-stock show:

Horses 191,000
Goats 1,700,000
Sheep 177,000
Cattle 2,000,000

_Live-Stock on the Hoof Exported From Venezuela from 1831 to 1918._

1831 1,825
1847 15,976
1852 13,316
1882 5,929
1898 24,000
1901 60,000
1903 60,000
1904 60,000 _Wt. in Kilograms._ _Value in Dollars._
1915 18,339 5,415,000 259,800
1916 18,267 5,115,000 246,000
1917 18,333 5,195,000 325,000
1918 19,020 5,343,000 308,000

_Exports of Frozen Meat from 1915 to 1918._

_Years._ _Carcasses._ _Wt. in Kilograms._ _Value in Dollars._
1915 17,847 2,197,240 196,663
1916 18,267 3,315,990 334,216
1917 18,335 4,978,420 398,273
1918 -- 5,867,770 467,867

In 1917-18 the exports of the "Pastoral Zone" were:

_Products._ _Value in Dollars._
Salted meat 3,398
Frozen meat 467,867
Animal hair 100
Horns 1,788
Skins 1,673,230
Frozen residue of horned cattle 10,982
Horses, sheep, goats, pigs 24,539
Horned cattle 308,188
Wool 155
Soles 67,442
-----------
Total 2,657,689

In 1919 it was estimated that $20,000,000 were invested in stock-raising and pastures. Since that time there has been a great increase and it is safe to estimate that now the sum is nearer $30,000,000.

Topographically Venezuela may be divided into three regions:

1. The mountain area of the north and northwest.

2. The Orinoco Basin, with its spacious "llanos" (plains).

3. The Guiana Highlands.

It is the second region, called "The Pastoral Zone," in which we are most interested. The other two concern us only in two respects: as a source of water supply, and as a hindrance to easy transportation.

"The Pastoral Zone" covers 300,000 square kilometers (187,500 square miles), and extends from East to West, from Barrancas, on the vertex of the Orinoco delta, to the plains of Sarare on the Colombian frontier; and from South to North from the Vichada River to the mountains of El Pao in the State of Carabobo. It includes the states of Portuguesa, Zamora, Cojedes, Apure, Guárico, Anzoátequi, Monagoas, Bolívar and part of the other neighboring states.

This entire region is most admirably suited for the raising of cattle. All year round there is an abundance of green grass and the cattle do not need much care. Here exists one of the finest natural pastures of the world, capable of supporting, with the use of modern methods, 50,000,000 head of cattle, twenty-five times the number now existing.

There are two seasons--wet and dry. During the rainy season, from June to October, the cattle feed in the highlands and mesas, which are not subject to inundation. From January to May, the dry season, they feed in the lowlands, which always retain a natural dampness and abundance of grass.

The climate of this zone is slightly warmer than that of the plains of Texas, and the dampness of the lowlands results in a much greater growth of vegetation suitable for cattle.

Throughout this region are scattered the cattle farms of the country, in most of which the primitive methods of cattle raising are still followed. The "llaneros," as the inhabitants of the plains are called, have not yet commenced to utilize the modern methods for breeding or raising cattle. The cattle run almost wild and considerable loss results from the lack of proper care. The milk is obtained almost entirely by the calf, and thus another great source of income is lost. This accounts for the importation of $400,000 worth of butter annually.

Each year the cattle over three years old are separated from the herd and slaughtered, although the slaughter of cows is prohibited, and General Gómez has absolute control over the slaughter of beef for home consumption. Then, until the next year, the cattle are again allowed to run wild and at will.

The reason for this apparent carelessness is the regrettable lack of sufficient labor to care for the herds. This is also the main reason for loss by disease and drought.

The Orinoco River, 1500 miles long, and 1900 miles long if measured by its Guaviare branch, lies entirely within Venezuela, and drains this great cattle section. It has 436 tributaries, and plays an important part in the transportation of cattle. Here lies the remedy for drought. No steps have yet been taken for the proper storage of water for emergency use; with the installation of water storing facilities the drought loss may be practically eliminated. The screw-worm of the kind existing on our Texas ranches is here in evidence and loss undoubtedly results from this source.

Malarial fever at times works havoc in various sections of the "llanos." Though it may be said that the effects of this disease are greatly exaggerated it is true that the disregard of the laws of hygiene is responsible for the wide prevalence of this disease. It is the supine ignorance of a portion of the half-savage people who inhabit the plains, which allows the disease to gain dangerous headway. These people live and eat in primitive fashion, drinking muddy water, eating badly cooked roots and beef, without salt, sleeping in the open nearly naked, and consuming at every opportunity huge quantities of coffee and spiritous liquors (aguardiente), thus becoming predisposed to end as victims of the dread disease. With the adoption of sanitary methods to combat the fever, it may be wiped out upon the plains, as is now happening in some of the better ranches where the workmen observe the elementary laws of hygiene.

Considering Venezuela's natural advantages and the handsome profits even now realized under the loose methods of breeding followed, it is certain that Venezuela is destined to be primarily a cattle country. "If, notwithstanding the unprogressive methods followed in the breeding of cattle, and despite the lack of care on the part of the 'llanero' in the selection of good males, resulting in a large percentage of weak calves, which, on reaching puberty, give little milk and little beef, it still appears that breeding is the most profitable industry in the country, it can well be imagined how the profits will increase when the Venezuelan breeder puts into full operation the modern improved methods for breeding, such as the selection and crossing of good breeds, the introduction of modern methods of sanitation, and the selection and improvement of the pastures for fattening and the production of milk." (Director of Experimental Station of Agriculture, Dr. Martínez Mendoza).

Until very recently, a decided lack of adequate transportation facilities prevented the development of the industry. Death of stock and loss of healthy condition when transported by the shaky mountain railways decreased the profits of the cattle raisers. Lately, 1,800 miles of motor roads were built under the direction of General Gómez, which afford an outlet for the products of the "llanos." Their construction means the unification of the country and its development. Probably no one factor has been of such prime importance to the nation as this great engineering feat.

Still, it must be acknowledged that these roads are not sufficient and that there is still a lack of transportation facilities. The one saving factor in the situation is the Orinoco and its branches.

In the past very little attention has been given to the systematic crossing of breeds. Of late, several prominent cattle raisers, aided by General Gómez, have begun scientifically to better the breeds of animals by the importation of fine foreign stock. Thus, the Zebu cattle has been in the country for some time. This type excels the native cattle in weight, but is very fierce and wild.

The milk cows are now being selected with great care and good results are being obtained from crossing them with native stock. Dutch, English, Swiss, German and American cows are kept in several up-to-date establishments, where the raisers are beginning to overcome the difficulties of acclimatizing the foreign breeds, and a high average in the production of milk is resulting.

At "La Rinconada," an establishment very near Caracas, the pure breed "Holstein Friesian" is found and the specimens are sold to cattle-men of the interior, showing a commendable tendency on their part to improve their stock. I have visited this establishment and may say that great diligence is exercised in the care of these cattle.

Although the principal income from cattle accrues, of course, from the slaughter of beef and sale of hides, there is another great source of income,--the production of "cincho," cheese, for home consumption. Cattle on the hoof now command a price of Bs. 25 ($5.00) per "arroba" (25 pounds); the price of cheese is Bs. 600 ($125.00) per 100 kilos. Because of the recent advances in the prices of cattle and cheese, the industry has obtained a new impetus as is evinced by the huge investment of foreign capital (mainly English) during recent years.

The Venezuelan government is doing its best to encourage foreign capital to invest in the industry. To stimulate production breeding animals, barbed wire, pumps and well-boring machinery may be imported at a very low rate of duty.

Immigration is being encouraged by the payment of transportation, passport, and incidental expenses, and by grants of land. In spite of this, immigration however is very small, being offset by emigration, and the high death rate that results from unsanitary conditions keeps the population figures of the country practically stationary.

There are laws in operation fixing the price and amount of land to be bought by any one person. One may buy 6,000 acres of first-class grazing land and 10,250 acres of second-class grazing land at very low prices. He must improve the land and have at least ten persons on every 250 acres, in the case of land grants, though I have been unable to ascertain whether this also applies to bought land.

To buy land one first applies, in writing, to the governor of the state in which the land is situated. If no objection is found to the sale, a land commission surveys, classifies, and values the land. The application then goes to the Minister of Fomento, who, if he approves it, issues a deed, upon payment of purchase price in bonds of National International Consolidated Debt, or the equivalent at the current rates. The deed must then be properly recorded.

The government is encouraging the industry by the imposition of very high protective duties. An example may be found in the boot and shoe industry which is protected by a tariff, based in 1918 upon gross weight and, including surtaxes, amounting to $274.10 per 100 pounds.

Of late, more and more impetus has been given to the establishment of canning, tanning and meat packing plants. Yet, there is only one packing house in the country. The "Venezuelan Meat and Products Co., Ltd.," an English company, with a plant at Puerto Cabello, has practically a monopoly of the exportation of frozen and chilled meats and of "tasajo" (jerked beef). The capacity is 300 head of cattle per day and the chief market is Europe. The same company has invested large sums in choice cattle lands near the site of the factory, and since its infancy has shown a consistent tendency to steady expansion.

There are two sizable tanneries at Maracaibo which supply the local demand for coarse leather. Uppers for shoes and finer grades are imported from the United States. Other smaller tanneries are located at Caracas, Valencia and La Guaira.

At Barrancas is located a salt-meat plant which is expected shortly to handle 25,000 head of cattle per year in the production of gelatine, meat extracts, fertilizer and salt meats. The very high price of salt in Venezuela is a severe drawback to the salt-meat industry.

Río Chico is a manufacturing town, making soap and candles and passing the hides to La Guaira for tanning and export.

The Dairy and Canning plant at Maracay is entitled to special mention. It owes its success to the support given by General Gómez, its largest stockholder. It is ideally located, being surrounded by some of the most modern cattle ranches of the country, and has the advantages of nearby and easily accessible markets. The company also owns its own cows, and hogs which are supported by the waste and refuse of the factory.

The building is a specially constructed one, fitted out with a refrigerating plant and modern machinery of American and German make. Even the cans used are made within this building. Two kinds of butter are made here, one with salt and the other without salt. This is the best butter made in the country. Canned sterilized milk and cream are also produced, as is also a high grade of cheese. The capacity is 400 pounds of butter and 100 pounds of cheese per day.

Immediately upon entrance to this factory, one is impressed by the extreme cleanliness and efficiency existing and by the up-to-date methods used.

Finally, we may consider the advisability of investing capital in the cattle industry in Venezuela, as there is no question that real opportunity for profit exists here.

Venezuela is superior to Argentina, the other great cattle country of South America, in every respect except one, that of the amount of pasture land. This handicap, however, is not very important considering that Venezuela is not producing to capacity by _96 per cent_ and that it will be a very long time before it becomes necessary to look for means of extending the present feeding grounds. When that time comes, alfalfa may be planted on the mesas and highlands not bearing a natural growth of grass. It has been demonstrated that both alfalfa and elephant grass will grow in almost all sections of Venezuela.

_Venezuela is a week nearer to Europe than Argentina._ The vast importance of this fact is self-evident, for it means that Venezuela will always be called upon up to the limit of her production.

Land is cheap. A square league of meadow land may be had for $80.00. The best pasture land in a good location may be bought for $800.00 per square league. Land is abundant too, and but a small percentage is now in use.

Guanta is a port of the Carribean, in the State of Bermúdez, 12 miles east of Barcelona, with railroad connections. It has a protected harbor, with an easy and safe entrance 1998 feet wide, secure anchorage for large vessels, and a good wharf. Behind Guanto lies fine cattle land, a significant fact when it is recalled how very important is the shipment of live cattle.

Here would be an ideal spot for an American packing house, and the country behind would seem well adapted for the investment of capital in cattle-raising.

The regions just below Ciudad Bolívar would also be a good location for an American enterprise. Stock may be very cheaply bought and brought down the Apure and Orinoco rivers to the plain below the city, where they could be fattened and slaughtered. There is easy access to the Carribean and Atlantic, to Trinidad and other markets.

On the other hand, we may say that the future of the cattle industry depends primarily upon the political situation of the country. It is this factor which has retarded the industry in the past and which is now responsible for the hesitancy on the part of foreign capital. The profit to be derived from any industry here depends upon a firm, stable government. Under such a government the profits to be derived from cattle will be immense. If political wars again break out, however, heavy losses are almost inevitable.

The present administration has done more for the development of the country than any previous government and its attitude towards foreign capital is favorable. It has, furthermore, been firm and stable.

Still, beneath it all, one detects signs of a strange unrest. The observant traveler hears murmurings every day. There is no denying the fact that the present government is a military one. Yet, I believe that the intelligent and influential class of the nation realize the good it has done and feel that the country must never return to the old conditions of ceaseless revolution. I am of the opinion that Venezuela has fairly embarked upon a program of development and prosperity.

Another factor to be seriously considered is the aforementioned shortage of labor. Yet, in spite of this, labor is very cheap. The government has a favorable attitude toward grants for colonization purposes, and in this lies a golden opportunity for a resourceful man with capital to bring his own laborers here and realize great profits in the venture.

If, upon more detailed examination of the conditions than I have been able to institute during my limited stay, it is still the desire of Americans to invest here, such action must be taken soon. The unprecedented success of the packing plant at Puerto Cabello has encouraged other Britons to invest. The company itself is acquiring the best lands about the site of the plant and interested investors are buying the desirable land in other sections. The American who intends to invest should do so immediately or he will find that the choice cattle lands and the best locations for packing houses will be in the hands of the English. Prompt action is imperative.

_Willard C. Frazee._

MINERAL RESOURCES OF VENEZUELA

Before discussing the minerals of Venezuela we shall touch briefly on some of the predominant features of the topographical formation of the country, without, however, entering on a detailed description of the geologic aspects of the rocks and soil. The location of minerals is directly connected with geologic formations, and the findings of geologists should be consulted before we can take up the more intimate study of mineral ores for commercial and industrial purposes.

It has been stated that one of the most ancient land surfaces in the world is the Guayana Highlands, and from observation made on this point they may be said to offer many striking analogies to the western highlands of Scotland, which furnish such frequent opportunities for exalted poetical allusion in the writings of Robert Burns. The great, elevated platform, from which rises the peaks and mountain chains of Guayana appears everywhere to be composed of rock which during the process of integration and disintegration has preserved traces of a primitive land of long ages ago when living organisms, if there were any, had not reached such a stage in their development as to leave relics in the deposits of the time. The mountains are thought to be composed of similar rocks, gneisses, hornblendes, schists, and granite, all containing evidence of great antiquity in point of geologic time. This Guayana complex, as it is called, has been considered by geologists as more or less equivalent in age to the Lewisian gneiss of Scotland and therefore one of the oldest members of the Archaean system.

While in all probability northern Venezuela has no rocks quite as ancient as those of Guayana, the geological history of this part of the country has been much more eventful and the number of earthquakes suggest that even now the form of the earth's crust in this region is undergoing comparatively violent changes. As is commonly the case, to find the oldest rocks one must search the hills. The masses of gneiss, silvery mica, schist, marble, etc., which form the highest part of much of the mountain region, were first studied by Mr. G. P. Wall in the Caribbean Hills in 1860 and named by him the _Caribbean Series_. The silvery mica flakes of this region are sometimes mistaken for the precious metal and many valueless specimens have been offered for sale as silver to credulous fortune hunters.

The mineral wealth of Venezuela although not as extensively developed as conditions would seem to invite, is without doubt of very great extent, especially in the states of Bolívar and Yuruari. The principal mineral resources consist of gold, silver, copper, iron, zinc, lead, quicksilver, asphalt, petroleum, coal, sulphur and precious stones. There exists hardly any known mineral product that is not found in some part of the vast territory of Venezuela.

GOLD

The yellow lure that drew the early European venturers to the West is still one of the principal sources of wealth in Venezuela. Since the Conquest gold has always been one of the chief attractions offered by Venezuela to prospectors and capitalists. In 1904 Venezuela occupied fifth place in the production of gold in the American Republics and it is acknowledged that the evidence obtained in the various expeditions in search of this precious metal indicates that gold exists in greater quantities than statistics tend to show. The greatest output is in the region of Yuruari, which includes "El Callao." Lack of experience and carelessness of management on the part of early companies have led to the shutting down of mine after mine when once the accessible ore of the vein was exhausted, or lost by faulting. Among the earlier mines, the Callao was perhaps the most famous, though at all times the mining industry in this region has been hampered by the cost and difficulty of transportation, a drawback only to be removed through the construction by the government either of macadamized roads or railroads, at the outset preferably the former. There are rich veins in all the mountainous lands between the Yaracuy River and the cities of San Felipe, Nirgua, and Barcelona. Near Carúpano large mines are being exploited by New York capitalists, who have been able to extract seven ounces per ton out of the ore mined; besides these there are also mines in the vicinity which contain rich deposits of silver, copper and lead.

The value, in average years, of Venezuelan gold production since 1896 has been:

1896 $948,500
1897 1,057,400
1898 1,089,300
1899 593,500
1900 321,200
1901 321,200
1902 433,800
1903 600,000
1915 1,280,217
1916 1,479,218
1917 898,431

COPPER

Copper ores are fairly common in the northern cordilleras, and likewise in the mines of Aroa in Yaracuy, 112 kilometers from Puerto Cabello. Here the pyrite veins occur in the Capache Limestone not far from the point where it has been crossed by a mass of granite. Copper ores are believed to exist in many other places in the mountains of Venezuela, especially in the mines of Seborneo and Bailadores. A rich deposit has recently been opened up near Pao in the northern part of the state of Cojedes. But the development of metals has been so retarded during the past year, that the South American Copper Syndicate Ltd., one of the principal concerns, has practically suspended operations and very little production has been realized since March, 1919. The normal output could not be maintained after the termination of the European war, which accounts for the disproportion observable between the years 1918-1919 in the production of gold and copper. In 1919, 653,456.77 grams of gold were mined as against 712,007.08 in 1918. In 1919, 2,090,290 kilograms of copper were produced as against 29,708,195 kilograms in 1918.

IRON

Many signs of hematite and magnetic iron occur in the coast of the Cordilleras in the mountains above Cora, Barinas, Barcelona, Cumaná and in many spots in the mountains of Parima; the most valuable ore is found near the river Imataca, a tributary of the lower Orinoco, eighty-six kilometers from the mouth. At one point the iron is only 487 meters from the river. There are inexhaustible deposits of magnetic mineral which give 80% pure metal, easily accessible and presenting little if any difficulty in transportation. The veins are said to be numerous and extensive. In 1901 seven hundred tons were shipped to Baltimore where the ore was examined and described as magnetic with 60-70% of iron content. The main deposit is known as Imatoca, but there are several other well known deposits in close proximity such as El Salvador, Nicaragua, La Magdalena, El Encantado, Costa Rica and Yucatan.

Every natural advantage is afforded in the working and developing of iron ore deposits in Venezuela. In a metallic mine, value depends more upon its fertility and less upon its situation.

It is otherwise with coal. The value of a coal mine to a proprietor frequently depends as much upon its situation as upon its fertility; hence we may deduce the conclusion that the iron mines of Venezuela being both fertile and commercially well situated, should have a compelling interest for foreign capital, especially American capital, in its search for profitable fields of investment.

COAL

In many parts of the Caribbean Hills, the Segovia Highlands, the Andes as well as Maracaibo and the Coco Lowlands, deposits of coal exist, but have only been worked in a perfunctory manner in scattered regions. The coal mines west of Maracaibo have produced the best specimens, and seams of a similar nature have been opened near Coco by shallow workings. The most extensive coal mines are those of Naricual some fifteen miles east of Barcelona, where the partially explored area has revealed some hundred deposits of coal of regular formations measuring from 10 centimeters to 2 meters in thickness.

Coal, however, is not one of the great revenue paying staples, due to the fact that the mines are located in a country thinly inhabited, and without good roads or facilities for transportation by water.

SALT

Salt is perhaps the most profitable mineral for the government, due to the fact that it is a government monopoly. The State allows only certain specified companies to mine or otherwise obtain this staple. One of the richest deposits is the salina of Aroga, discovered by Nino in 1499. An extensive surface of pure sodium chloride is found here, which yields large annual incomes to the government. Salt is found in almost all regions of Venezuela as follows:

_States and Territories_ _Deposits and Mine_
Zulia 5
Falcón 20
Carabobo 5
Anzoátequi 7
Sucre 4
Nueva Esparta 10
Guayana 1
Apure 1
Bolívar
Goagira 6
Colón 5
--
64

The states of Táchira, Trujillo and Mérida use great quantities of yellow salt, white salt only being consumed in the regions near the salinas of Zulia. From 1874 to 1904 this commodity yielded $2,753,761.44 in revenue to the government.

In 1918 the extent of the mining industry was so broad that a special directory service was suggested by the Minister of Fomento, separate from the present Union of Mines, Government Lands, Industry and Commerce. Mining concessions in 1917 included 9 in iron, 14 in gold, 1 in copper and iron, 8 in copper and 1 in mica. In 1918, 9 were granted in gold, and 5 in iron. The production totalled:

Gold 958,304 grams
Copper 42,270,900 kilograms
Asphalt 54,071,700 "
Petroleum 18,248,524 "
Coal 20,164,915 "

EXPORTS IN 1917

_Companies._ _Metal._ _Quantity._ _Value._
South American Copper
Syndicate, Ltd. Gold 902,510 grams B. 2,669,599.19
La Cumaragua Sindicato
Buria Copper 43,701,500 Kilograms
Nat. Government }
So. American Co } Asphalt 47,124,000 "
N. Y. & Bermúdez Co. }
Caribbean Petroleum Co. Petroleum 8,650,700 "

The general mining output of Venezuela in 1918 exhibited the following characteristics:

The production of coal was 25,332 tons in 1918 against
20,165 tons in 1917, all from the two mines operated by
the government. Considerable improvements were made at the
Naricual mines, and plans have been formulated involving the
installation of briquetting machines, and the electrification
of the mine by means of the falls of the Neveri River as the
power source. The cost of coal at the pit was 13 bolivares
($2.51) per metric ton, and 40 bolivares ($7.72) when delivered
to private parties.

Copper production fell from 42,270 tons in 1917 to 29,708
tons of ore in 1918, probably owing to lack of vessels for
transportation and the falling off of demand for the metal
following the cessation of hostilities in Europe.

Twelve companies were engaged in mining gold, the output being
958,304 grams in 1916 and 712,007 grams in 1918.

Only one company produced commercial asphalt (46,453 tons).
(See Report on Petroleum and Asphalt, p. 102.)

The number of mining claims of all kinds taken out was 97 in
1917, 119 in 1918 and 135 in the first three months of 1919.

_James J. O'Neil._

THE PETROLEUM AND ASPHALT INDUSTRY IN VENEZUELA

[The writer of this report is much indebted to Mr. W. T. S.
Doyle, a graduate of Georgetown University, now manager of the
Caribbean Petroleum Company in Venezuela.]

The purpose of this report is to present a complete, yet concise, discussion of the petroleum and asphalt situation in Venezuela. The first part is devoted to petroleum and the second part to asphalt.

Señor N. Veloz Goiticoa, a prominent Venezuelan, says, "There is scarcely a mining product known that can not be found in some part of the vast expanse of Venezuela." This statement, intended to apply to all minerals, is particularly true of petroleum and asphalt in respect of which the great area of Venezuela has as yet hardly been scratched.

PETROLEUM

Some of the natives of Venezuela knew of the properties of petroleum as far back as 1856, and used the oil in lamps. Deposits were later discovered in the interior of the country, particularly near the banks of the Venezuelan lake of Maracaibo. In the year 1883 the Government granted the first concession to a local organization, called the "Compania Petroleo del Táchira," which installed a hand-drilled well in the state of Táchira; this plant is in operation at the present day, although old-fashioned methods are being used to obtain the oil from the ground, consequently the production is negligible. Immediately after this discovery several concessions were granted to various interests, but they lapsed because no work was started on them. No further interest was shown in petroleum until 1893, when a general mining law was enacted which included provisions for petroleum and asphalt. This law was in force until 1904 when a new code was enacted, containing special legislation relating to petroleum and asphalt. The main provisions were that claims could no longer be taken up by denouncement proceedings[16] but only under a special contract entered into with the Federal Executive, the President.

[16] Old Spanish law which provided that a person or party of persons could stake out any unowned piece of ground, and then establish claim for it.

In 1905, during Castro's administration, the mining law of 1904 was remodeled. The act was very short,--containing not more than 13 articles,--but it placed in the hands of the Executive a great deal of power that he had heretofore not possessed.

All dealings regarding concessions were to be negotiated directly with him. In the year 1906, pursuant to authority delegated to the Federal Executive, an Executive decree was formulated which provided for the whole procedure under which concessions were to be granted. Under this, important initial steps were taken and many concessions granted. Four of these concessions are in force to-day; namely:

1. The Colón District (Colón Development Co., Ltd.)

2. The Maracaibo and Bolívar District (Venezuelan Oil Concessions, Ltd.)

3. Buchivacoa District (British Controlled Oilfields, Ltd.)

4. Silva and Zamora District (North Venezuelan Petroleum Co., Ltd.)

Under the new code of 1909-1910, several new contracts were made. A roving concession was granted to John Allen Tregelles, an Englishman, to explore the whole northern part of Venezuela. He located and started to drill a well near Cumaná, but without result. The rest of his concession lapsed, after a period of two years, through non-performance. The next important concession under the code of 1909-1910 was granted to the Bermúdez Company which obtained a small area, not covered by the Tregelles concession; their efforts were rewarded with more success. The Pauji Company, a local organization, also obtained a concession for a small area, but their efforts met with but small success.

On the second of January, 1912, the Caribbean Petroleum Company started the first solid work in the exploitation of the petroleum fields. They obtained permission to explore over 1,000 different sections and was the first company to achieve substantial success. Drilling was begun in 1914, and three wells in Mene Grande, state of Zulia, and one in Perija turned out to be successful. In the same year the "Venezuelan Oil Concessions, Ltd.," a British corporation, drilled a successful well near Cabimas, and the "Colón Development Company," also a British concern, struck oil near the Río de Oro.

The law of 1915 showed that the government was exhibiting a tendency to exert a controlling influence, much more than before, over the various oil fields. It was found no longer possible to obtain the enormous concessions that had heretofore been granted.

In 1918 still another new law was enacted. Just about this time greater interest was being displayed in Venezuelan petroleum, a condition brought about through the operation of the economic law of supply and demand. The European War, and the failure of some of the most important Mexican fields had a great deal to do with the shortage. The world naturally looked for new petroleum fields, and Venezuela seemed to be among the most promising prospects. Pursuant to the 1918 law, an Executive Decree was formulated on October 9, 1918, establishing the conditions required to explore and exploit petroleum, granting to prospectors all the necessary facilities, and, in a word, securing for Venezuela the efficient and profitable exploitation of her valuable deposits. In pursuance to said decree, the Fomento Department having passed several resolutions, opened for bids the zones which were free in the states of Zulia, Táchira, Trujillo, Mérida, Falcón, and Sucre.

In the spring of 1919 sixty-four contracts were made with the government by various interests, as follows:

1. West India Oil Company (Branch of Standard Oil Company.)

2. The Sun Oil Company, with subsidiaries as follows:

a. Venezuela Oil Fields, Lt'd.
b. Venezuelan Sun, Lt'd.
c. Sucre Oil Fields, Lt'd.
d. Trujillo Oil Fields, Lt'd.
e. Merida Oil Fields, Lt'd.

3. Maracaibo Oil Exploitation Company with subsidiaries as follows:

a. Mara Exploitation Company.
b. Miranda Exploitation Company.
c. Perija Exploitation Company.
d. Paez Exploitation Company.

It will be noted that under both the Sun Oil Company and the Maracaibo Oil Exploitation Company there are various subsidiaries. The reason for these combinations are, that under the law of 1918, no one company or individual may control more than 80,000 hectares of land for exploration or more than 40,000 for exploitation (1 hectare = 2.471 acres).

In the spring of the year 1920 about 140 concessions were granted under the law of 1918, and the prospective fields were greatly extended. Whereas in 1918 they were restricted to the western part of Venezuela, by 1920 they had been extended to several sections of eastern Venezuela. In the western part of the country, at the present time, the whole Maracaibo Basin is covered with concessions, and most of these are being exploited by American capital.

At the present day there are five companies of importance operating in Venezuela. The Caribbean Petroleum company, a subsidiary of the General Asphalt Company, has completed eight wells, all of them producing, the combined capacity of which is about 6,000 barrels per day, and the average depth of the wells 1,200 feet. All these wells are located in Mene Grande, in the state of Zulia, east of the lake of Maracaibo. This company is now drilling two wells, also in the State of Zulia; they have already drilled nine dry holes in the State of Zulia, west of Lake Maracaibo. The Caribbean Petroleum possesses the only refinery in Venezuela, located at San Lorenzo, on Lake Maracaibo, with a capacity of about 1,200 barrels per day, intended for local consumption in Venezuela. A pipe line 10 miles long connects the wells at Mene Grande with the refinery at San Lorenzo. The large refinery at Curaçao, D. W. I., completed two years ago, is also refining for the Caribbean Petroleum Company, the crude oil being transported up Lake Maracaibo, and through the port of Maracaibo, in barges.

The Colón Development Company, a British Corporation, has completed four wells, two of 900 feet, one of 1,200 feet, and one of 1,600 feet and is now drilling a fifth well, all in the District of Colón, state of Zulia, south and southwest of Lake Maracaibo. Their four wells are believed to have a capacity of from 400 to 500 barrels a day. The British Controlled Oil Fields, Ltd., a British Corporation, is drilling a well in the State of Falcón, 30 miles east of the city of Maracaibo, and about 10 miles from the Caribbean seacoast. The Maracaibo Oil Company, an American corporation, organized in the autumn of 1919, has made four locations, all in the State of Zulia, with the principal locations in the Parija district. Camps have been established, and drilling material is arriving at the port of Maracaibo. The Bermúdez Company, a subsidiary of the General Asphalt Company, has been drilling for petroleum near Guanoco, for the past 23 months. It is understood that after drilling 3,600 feet, three-fourths of which was in black shale, the work was abandoned.

The petroleum now being produced in Venezuela is of an inferior quality. The wells at Mene Grande, controlled by the Caribbean Petroleum Company, produce petroleum which has a specific gravity of 960, with a heavy asphalt base, and contains about 15% light material, and 85% fuel.

The geographical situation of Venezuela makes particularly interesting the various petroleum enterprises which should contribute considerably to the economic development and prosperity of the country. Furthermore, the Panama Canal is not far distant, and vessels that cross through it,--and they are daily increasing in number,--will be able to utilize easily the petroleum of the country.

As other industries have suffered, so has the petroleum industry been seriously handicapped in Venezuela by the lack of adequate transportation facilities. There are undoubtedly many rich fields of petroleum in the interior of the country, but it is clear that they are worthless without adequate means of transporting the product to the seaports or centers of consumption. The Caribbean Petroleum Company has had considerable difficulty in transporting its product to Curaçao from San Lorenzo, a difficulty due to the fact that at the narrow neck of Lake Maracaibo, there is a bar with only 12 feet of water above it. It is obviously impossible for ships of any great size to come over the bar and into the lake. All the petroleum that is shipped from the Maracaibo district at the present time is handled by shallow-draft barges, but with sufficient capital, and some good engineering, this difficulty could undoubtedly be overcome, and it would then be possible for tank steamers to come into the lake and receive cargoes of crude petroleum from the various producing points. The principal port in this section is Maracaibo, in the state of Zulia, and all petroleum for export is handled through it.

There are numerous opportunities offered for foreign capital in Venezuela in the exploitation of petroleum. As noted before, the surface has as yet only been scratched, and indications to-day point out that there are many possibilities as yet untouched.[17] Geologists say that there are signs on all sides of the existence of petroleum, but just where the big producing fields of the future will be located is difficult to ascertain at the present time.

[17] Senator Lodge, addressing the Senate of the United States on April 13, 1920, declared that what are probably the largest oil fields in the world are at the point of development in Venezuela and Colombia.

On the 26th of June, 1920, a new law pertaining to petroleum and asphalt was enacted. A full copy of the act, in Spanish, is presented with this report. (On file in School of Foreign Service.)