Chapter VIII: Part II: Student Reports (4)

The following table gives the names of the principal petroleum and asphalt companies operating in Venezuela, with capital invested:

Names of Companies Capital in Bolivares Capital in Dollars
Caribbean Petroleum Company 20,782,482 4,156,496
New York and Bermúdez Company
(asphalt) 8,914,932 1,782,986
Colón Development Company, Ltd. 4,747,000 949,400
Bermúdez Company 4,319,820 863,964
Venezuelan Oil Concessions, Ltd. 2,316,996 463,399
British Controlled Oilfields, Ltd. 1,500,000 300,000
----------- ----------
Total Bs. 42,581,230 $8,516,245

There are in addition several small local companies operating in Venezuela; these together with the above companies represent probably a total investment of Bs. 50,000,000 ($10,000,000) in petroleum and asphalt.

It will be interesting to note at this point that during the year 1919 over Bs. 2,000,000 were paid to the Venezuelan Government by North American corporations for the right to exploit concessions.

The following table shows amounts (in metric tons) of petroleum exploited and exported during the last three years:

_1917_ _1918_ _1919_ _Totals_
Exploited 18,248 24,153 22,957 65,358
Exported 8,650 11,101 1,084 20,835

It will be noted that production and exportation greatly increased in 1918 over 1917. In 1919, production was decreased and exportation greatly decreased in proportion to exportation of 1918. In 1918, almost half of the production was exported while in 1919 the amount exported was about one-twenty-second part of the amount produced. This was due to the fact that a greater amount was being consumed locally in Venezuela.

ASPHALT

The age of asphalt is at hand. This important mineral already has many applications in our lives, and with a greater knowledge of its possibilities, its utility will be largely extended. Asphalt is very old. It was the material that welded together the stones of the Tower of Babel; it was found on the shores of the Red Sea, and the Egyptians used it in the preservation of their dead. The etymology of the word asphalt ("α" privitive and σφαλλω, to slip) indicates its cementatory properties, and the actual ingredients of the substance are common scientific knowledge. Asphalt, asphaltum, bitumen, maltha or mineral pitchmene,--different names for the same substance,--is an amorphous, pitch-like material, black or brownish in color, and lustrous, being composed of various hydrocarbons, whose proportions vary widely according to the locality from which the material is obtained. It is a product of the decay of vegetable matter, and commonly,--perhaps always,--occurs in connection with rocks containing bituminous matter. It melts at a heat of from 195 degrees to 212 degrees Fahrenheit, and burns with a bright, smoky flame. While the pitch-lake of Trinidad, a surface a mile and a half across of pure asphaltum, is perhaps the most remarkable occurrence of this mineral in nature, still the lake of Bermúdez, which covers 1,000 acres in the state of Sucre, Venezuela, is fast equaling the former in commercial importance. Asphalt is also found in the Pedernales district, in the state of Monagas, as well as on the shores of Lake Maracaibo. As an indication of the value of Venezuelan bitumen, we may cite the fact that this special variety is used to protect the tunnels of the New York subway from moisture.

The fact that Venezuela has sent 43,000 tons of asphalt to the United States in one year, is an indication of the future wealth to be derived from the systematic exploitation of asphaltum there.

At the present writing there is but one company producing asphalt,--The New York and Bermúdez Company, a subsidiary of the General Asphalt Trust. This company is working a pitch lake at a point near Guanoco, in the state of Sucre, adjacent to the Gulf of Paria, in the extreme northeastern part of Venezuela. The concession held by this company is known as the Hamilton Concession,--obtained in 1886 for a duration of 99 years, and including about 960 hectares. The grade of asphalt is excellent, and in many respects better than the Trinidad variety, as it tests at a grade of 98% asphalt and 2% water and waste. The pitch lake is only 7 miles from the Rio San Juan and the company is particularly fortunate because the deep water in the river permits ocean steamers to come alongside the company's docks. A railroad, controlled by the New York and Bermúdez Company, is in operation between the lake and the docks, and over this all asphalt produced in this region is transported. The transportation situation here may be contrasted with that in the Maracaibo district in western Venezuela, where transportation conditions are none too good.

The South American Asphalt company of Philadelphia has obtained an asphalt concession in the vicinity of Mene Grande, near the eastern shore of Lake Maracaibo, but as yet no results have been obtained.

The following table shows the capital of the New York and Bermúdez Company, and the amount of asphalt exploited and exported for the last three years:

Capital of New York and Bermúdez Company, Bs. 8,914,932 ($1,782,986
American gold). _Figures in metric tons._

_1917_ _1918_ _1919_ _Totals_
Exploited 54,071 46,453 45,936 146,460
Exported 47,124 43,347 42,459 132,930

Official Trade Statistics of Finance Department for 1918-1919 show that during budget year, Venezuela exported more than Bs. 1,000,000 ($200,000 American gold) worth of asphalt.

The law of June 26, 1920, referred to in the last part of section one of this report, applies likewise to asphalt. The photographs attached show several phases of the petroleum industry in Venezuela and the accompanying map shows in a general way the petroleum and asphalt concessions and the areas of production.

_William H. Johnson._

CHECKS, DRAFTS, BILLS OF EXCHANGE AND TRADE ACCEPTANCES IN VENEZUELA.[18]

"In the primitive ages of commerce, article was exchanged for
article without the use of money or credit. This was simple
barter. As civilization progressed, a symbol of property--a
common measure of value--was introduced to facilitate the
exchange of property. This might be iron or any other article
fixed by law or by consent, but it has generally been gold
or silver. This certainly is a great advance beyond simple
barter, but no greater than has been gained in modern times by
proceeding from the use of money to the use of credit.

[18] In the discussion of commercial paper in Venezuela, it will be noticed that very few statistics are presented. It was found by the writer that very few articles had been written on this subject and those available were lacking in statistics. The Chamber of Commerce, however, interested itself in the topic under consideration and as a result statistics are to be compiled for the year 1920.

"Commercial credit is a creation of modern times and belongs in
its highest perfection only to the most enlightened and best
governed nations.

"Credit is the vital air of the system of modern commerce. It
has done more--a thousand times more--to enrich nations than
all the mines in the world. It has excited labor, stimulated
manufacturers, pushed commerce over every sea, and brought
every nation, every kingdom and every small tribe among the
races of men to be known to all the rest.

"All bills of exchange, all notes running upon time as well as
the paper circulation of the banks, belong to the system of
commercial credit. They are parts of the one great whole. We
should protect this system with increasing watchfulness, taking
care, on the one hand, to give it full and fair play and, on
the other, to guard it against dangerous excesses."

(Speech of Daniel Webster in U. S. Senate, March 18, 1834.)

These weighty words uttered by the great Webster, more than four-score years ago, indicate the importance of the functions of commercial credit, the red blood which flows through the veins of commerce. It is of vital importance, therefore, when studying the commerce and conditions of a country to consider, as we are about to do, the credit system.

CHECKS

The system used in Venezuela is the same universal check system common to the United States and European countries. Money is deposited in the usual manner on a checking account, in return for which bank credit is received, and the depositor thereafter has the right to direct the bank to pay to the order of a specified person any part of the capital therein deposited.

In regard to the period of time during which this method of payment has been employed in Venezuela it is difficult to secure definite information, although local bankers say that its history is very short. The period of real use is not longer than the last decade.

Considering the proportion of checks devoted to financing commerce, it is necessary to divide the latter into two main parts. First: commerce with the interior of the country, in the life of which checks are practically unknown, all payments being made in gold or silver. Second: transactions of the wholesale merchants and the larger retail dealers of important cities, who make ready use of this efficient and easy method of payment.

Although no statistics have ever been collected showing the amount of checks used in Venezuela, the following reliable data was obtained:

An estimate was made in 1920 by the National City Bank of New York City, _sucursal_ of Caracas, showing that about 75 per cent of the business handled by them was done through the medium of checks. It may be well to note at this point that this bank handles the business of American firms in that city together with other foreign companies who have dealings with the United States. Another estimate made by the Bank of Venezuela, taking the month of January, 1920 as an average, showed that about 50 per cent of the business transactions passing through their hands for that month was similarly completed. It may be observed that this bank is the largest and best recognized national bank in Venezuela.

From these two estimates we may draw the conclusion that the foreign branch banks handle more checks than the old established native banks of the country, due to the fact that foreign firms in Venezuela use a greater amount of checks than the native dealers. But since business with the interior of the country comprises about one-half the commerce of Venezuela, we should divide our estimates and conclude that between 25% and 37%, (31% mean average) is the proportion of checks used in the commerce of Venezuela.

The system of clearing these checks is the same as was formerly the custom of the United States, before the days of the clearing house. The banks of the interior are all branches of the four main banks of Venezuela. They handle very few checks but when occasion arises send them to the main offices for final settlement. Each day the banks gather their checks together and send them by messenger to the respective institutions on which they are drawn. In this manner the clearing takes place, currency being exchanged to settle balances. The size of the country and the proportion of checks used does not necessitate a clearing house.

LAWS REGARDING COMMERCIAL PAPER

Article No. 2 of the National Stamp Tax Law, drawn up by the Congress of the United States of Venezuela in conference assembled in the year 1915 decrees:

"Will be subject to a national tax of stamps, all documents or writings which relate to things, services, laws or legal proceedings, whose value is estimated or determined, that circulate within the interior of the Republic, or that are expedited for foreign use."

"This tax will be collected with the following tariff:

Bs. 25 to 50 Bs. 0.05
" 51 " 100 " 0.10
" 101 " 200 " 0.20
" 201 " 300 " 0.30
" 301 " 400 " 0.40
" 401 " 500 " 0.50
" 501 " 1,000 " 1.00"

DRAFTS AND BILLS OF EXCHANGE

Drafts and Bills of Exchange used in Venezuela may be classified and considered with reference to the following headings: International Trade and Domestic Trade.

We shall first consider the drafts used in foreign exchange. In most countries they may be classified as "clean bills" of exchange, and "documentary bills," _i.e._ those accompanied by bills of lading (full sets), invoice copy and insurance certificates. But this is not so in Venezuela, as according to the Banking Law of 1919 all drafts on Venezuela, in order to be collectible must have documentary evidence attached. At the termination of the late war many anxious dealers in North America shipped goods to Venezuelan firms, as a rule forwarding a draft to a local consul or bank for collection, only to find that it was useless without documents attached. Hence, if the merchant to whom the goods were sent chose to be dishonest, he might obtain the goods from the docks and sell them, and not be held responsible by law. Although this has very seldom occurred, it is always a wise measure for the drawer of a draft on Venezuela to acquaint himself with the banking laws of that country.

Another noticeable matter of considerable importance is the difference between the drafts drawn on Venezuelan merchants by American houses and those drawn by European houses. It is a commonly understood and most regrettable fact that the time on drafts from the United States do not exceed ninety days, while those from European countries, especially England, will bear six months' time. This fact was brought to the attention of the writer by the Chamber of Commerce and by every representative of banks, both American and Venezuelan, with whom he consulted. The Republic has expressed its desire to maintain and increase the present trade with North America but it demands the same credit from Americans as is granted by European merchants. To-day we live in an age of credit, and Venezuela must have that credit in order to develop her commerce.

From the law quoted herein it will be seen that all drafts on Venezuela are subject to a graduated stamp tax ranging from .05 bolivares for drafts valued at 25 to 50 bolivares up to one bolivar for drafts valued at from 500 to 1,000 bolivares.

Foreign drafts in Venezuela are always drawn in duplicate (first of exchange and second of exchange), each being forwarded by different steamers to insure safety, one becoming void when the other has been paid. Drafts may be drawn to the order of a specific payee, usually the collecting bank, or they may be drawn to the order of the drawers or shippers.

The discounting of drafts and other bills of exchange has developed greatly within the last two years. Commercial liquidation has been made possible by the buying and selling of drafts in all parts of the country at the same price. Funds have been transmitted by telegraph to places where the sending of specie would be extremely costly. Commissions range from ¼% of 1% to 1.

Recently there has been established by private enterprise that type of bills of exchange bearing 8% annual interest, or one per cent less than the current interest, at which wholesale dealers discount the invoices of their sales in the interior. This important branch of banking has been in operation for about two years and it has been noticed that the system, in spite of the short time in existence, has gained firm foothold and been generally adopted. The operations which have been carried on by the Bank of Venezuela in this branch show the following results:[19]

_Year_ _Semester_ _Amount_

1917 2 Bs. 368,430.53
1918 1 752,118.52
1918 2 967,516.32
1919 1 1,243,576.79

[19] Report of Inter American High Commission, 1919

As may be seen from these figures the results have been satisfactory, and the system has also produced still greater results in the development of the commerce of the Republic.

As is natural, the foreign banks recently founded, have also discounted these acceptances of commerce and it is hoped that with their great influence and the cooperation of the banks of Venezuela, this method will continue to grow in use.

The handling of drafts is at the present day perhaps the most important dealing in commercial paper observable in the banks of the country.

TRADE ACCEPTANCES

As expressed in the circular of Feb. 8, 1915, it is the opinion of the Federal Reserve Board that: "the acceptance is still in its infancy in the field of American banking. How rapid its development will be can not be foretold but the development itself is certain."

The Federal Reserve Board in its circular of July 15, 1915, defines the term "trade acceptance": "A bill of exchange--drawn to order, having a definite maturity and payable in dollars in the United States, the obligation to pay which has been accepted by an acknowledgment, written or stamped, and signed, across the face of the instrument, by the company or firm, corporation or person upon whom it is drawn; such agreement to be to the effect that the acceptor will pay at maturity, according to its tenor, such draft or bill without qualifying conditions." An acceptance, therefore, may rightly be called a time bill of exchange which passes from hand to hand like money.

This acceptance differs from what is commonly termed such in Venezuela and also from drafts. The commercial document with bill of lading attached commonly called an acceptance in that country, may be drawn at sight, or may be made payable at a certain time after sight. This enables the title of the goods covered by the bill of lading to remain vested in the seller, the drawer of the draft, or the person to whom the bill of lading may be endorsed, until the draft is paid. Another form not in common use in Venezuela is the sight draft for collection, which is drawn on buyers previously sold on open account. It is generally used as a means of collection when ordinary means have failed to produce payment. The "trade acceptance," on the other hand, is an acknowledgment of obligation and a promise to pay it on a certain date.

Some objection has been made to trade acceptances in this country on the ground that the bidding of the banks in the market of discount, would deprive commercial houses of selling their own single-name paper. It has been proved, however, that the sale of the aforesaid paper has in no way been disturbed by the introduction of acceptances. All banks worthy of consideration have as a rule surplus capital to invest and this is usually attracted by the commercial paper of responsible houses.

The use of trade acceptances, therefore, not only does not impede but tends to increase the banking facilities of merchants.

This most important of all commercial papers has yet to be adopted in Venezuela. The first acceptances cashed in that country were handled by the local branch of the National City Bank of New York. These acceptances--twenty in number--were cashed during the last week of July, 1920. The foundation has thus been laid and it is expected that their use will grow in such numbers that they will eventually surpass all other instruments of commercial credit employed in the country.

The present need of the Venezuelan public, of the bankers and of the nation as a whole is the development of the great natural resources of the land. This, obviously, is an enormous undertaking and requires from all the nations with whom Venezuela has business dealings, especially from the United States, _credit_. And by what means can that credit be more satisfactorily granted than in that form wherein each party reaps a real benefit, by the instrument known as "trade acceptance"?

_Nelson Hopkins._

COMMERCIAL TRAVELERS IN VENEZUELA

The importance of commercial travelers not only as representatives of business concerns, but also as types of a given nationality, has at last been realized and they are being treated as important factors not to be overlooked by corporations or the nation in the formulation of trade policies. They are the spokesmen of their countries and from their lips and by their actions a nation is sometimes judged not only from a business but also from a political standpoint.

The importance of this factor was realized but by few nations before the war, and the nations fortunate enough to appreciate their importance readily provided means for improving their service. The United States of Venezuela and the United States of America were among the nations which had been slow to realize the benefits that could be reaped from commercial travelers for their respective countries. However, once they had realized the necessity, Venezuela and the United States signed a treaty, effective July 3, 1920, which greatly benefited the travelers of all countries and also testified to the influence of their service.

The convention also impressed upon the business houses in both countries, and demonstrated the fact, that commercial travelers are the criterion by which concerns and countries are judged in foreign countries. Representation in overseas commerce requires men of skill and character and without these two qualities no traveler can ever succeed.

Venezuela is one of the best fields in South America for commercial travelers, as the nation is very rich and has a high standing in the financial world. The natural resources are innumerable and rich, as can be readily realized from the number of countries competing for investments and monopolies at the present time. The large amount of money in circulation and the importance of Venezuelan markets in the export trade has encouraged export houses throughout the world to send representatives to study conditions and eventually place their products in that market.

In order for commercial travelers to rightfully represent their principals they must be fully acquainted with climatic, political and legal conditions in Venezuela. The legal requirements for commercial travelers are few and by far less stringent than the laws of other Latin-American countries. Commercial travelers coming to Venezuela are not required by law to present any document other than their passports. No power of attorney is necessary, but it is advisable to have it in case it should be required in business transactions. A letter from the home office of the traveler or from some well established exporting or importing house is not necessary but advisable as a medium of introduction to the prospective buyers.

The recent convention signed between the United States of Venezuela and the United States of America has slightly changed previous customs. The object of the convention was that both countries might encourage commercial relations and increase business by facilitating the activities of commercial travelers. The convention provided for a license in both countries but as yet that provision of the convention has not been complied with and the prospects are that the old custom requiring no licenses will remain in effect.

There are no baggage restrictions, but, as the means of travel are limited in some parts of the country, it is advisable that the traveler confine his baggage to as small a trunk as possible.

In customs treatment of samples it is necessary to follow the provisions of the recent convention:

1. All samples which have no commercial value shall be admitted
free of duty.

2. All samples shall be considered without value when they are
stamped or rendered unusable.

3. Merchandise having commercial value shall be admitted
provisionally, security having first been given for the customs
duties and with the understanding that they leave the county
within a period of six months.

4. Duties shall be paid on that part which shall not be
exported.

Means have been provided at all principal ports in Venezuela for the immediate clearance of samples so as not to delay the commercial travelers. Samples usually receive consideration immediately after personal baggage and in some cases they are first.

In connection with advertising matter it is interesting to note that catalogues are admitted free; but the term is strictly construed. Pamphlets and advertising matter in general, including calendars, are dutiable at $1.37 per hundred pounds gross weight. Advertising matter with lithographed or printed designs not bearing the name and legend of the advertiser is dutiable at $17.13 per hundred pounds gross weight.

Practically all exporting countries are transacting business with Venezuela at the present time. America ranks first with Spain and England second and third respectively. Competition is keen, due to the fluctuation of the foreign exchange and the manufacture of goods. The American commercial travelers are excellent salesmen and thoroughly understand their products. The appearances, personalities and ways of the Americans are very popular in Venezuela, but the English and German travelers are very efficient and have considerable influence.

Before a commercial traveler can successfully sell goods in Venezuela he must understand Spanish. It is necessary to know not only the words but also the construction of the language. Many commercial travelers have failed in their attempts to sell goods due to the fact that they possessed only slight knowledge of the language, which is not alone a fault of the travelers but also of the houses they represent. The German nation was the first to realize that the knowledge of Spanish was indispensable to commercial travelers; knowing that this essential was the basis of business success in South America, the various German concerns prior to the war established schools where they instructed their agents in the language and customs of the countries to which they were to be sent. Offices were opened in the principal cities of various countries and agents sent to them where they remained for fully a year learning the business customs and language, and after mastering both they were given positions as commercial travelers. Consequently the Germans successfully entrenched themselves in numerous countries and were enabled to compete with every advantage in export trade. But many American travelers have neglected to learn Spanish, preferring to talk their own language whenever possible.

The national customs of Venezuela are naturally different from those of the United States and other countries. Business customs, too, are different and so are the customs of the home. It is easy to become used to them and one _must_ know them in order to transact business. In some parts of the country business would seem to be a secondary consideration, social life ranking first, which of course is contrary to the habits of thought in the United States and many European countries.

It is advisable, too, that we consider the variations in climatic conditions in Venezuela and the effect of such conditions on the demand for goods in general. In order intelligently to understand the situation it will be necessary to know the climatic features of each important city.

Caracas, the capital of Venezuela, has a splendid climate, invigorating and refreshing, somewhat similar to that of Los Angeles, California. The days are rather cool with the exception of mid-day which, of course, is very warm. Light-weight clothing is worn during the day while at night medium-weight clothing is preferable. As Caracas is the capital, there is a steady demand there for fashionable clothing. Aside from clothing, many other products are in demand such as drygoods, machinery of all descriptions, autos, hardware, etc. The same products are generally needed in all other cities. The intensity of the heat in Valencia, Maracaibo, Maracay and Ciudad Bolívar allows only light-weight clothing to be worn.

Commercial travelers should acquaint themselves with conditions in all cities and must carefully study the demands for their products. The market for machinery is greater in Caracas than any other city in Venezuela. The demand for farming implements is greater in Valencia than elsewhere. Mining machinery is needed in Maracaibo and surrounding cities where the various mines are located. Dry goods are in demand throughout the country districts. Regardless of the size of the city one can find American goods everywhere. The quality of the goods outranks that of other countries and, moreover, there is a strong feeling of friendship on the part of the Venezuelans in favor of America and American goods.

One of the frequent complaints uttered to American commercial travelers is directed against American methods of packing goods for shipment. During the last two years the majority of American exporting houses sending goods to South America have neglected proper packing with the result that the goods are often received in woefully poor condition. Although a small item, it is of prime importance from the standpoint of the importer and a hindrance to the success of commercial travelers.

We have enumerated the legal requirements and personal duties of commercial travelers and have also mentioned the market. It will be helpful to point out the means of transportation and communication in Venezuela. Companies that have never sent commercial travelers to Venezuela have a wrong impression as to the means of communication and transportation. The roads are excellent and in some cases surpass those in the United States and other countries. The railroads, although not as modern as the roads in the United States or Europe, are well capable of carrying passengers and freight up and down the high mountains. In some cases in Venezuela, a train will ascend from sea level to an altitude of 12,000 feet. There is herewith submitted a complete list of the railroads, showing destinations and number of stations. There is also attached a complete list of the roads showing distances between principal cities en route, the outline further showing the altitude of each city.

[Railroad facilities may be found enumerated on pp. 69-70.]

The following list of the roads and highways in Venezuela show the distances between cities and the altitudes of the respective highways:

HIGHWAY FROM CARACAS TO VALENCIA

_Distance_ (_Kilometers_) _Altitude_ (_Meters_)

Caracas (Plaza Bolívar) 0 920.00
Antimano 9.30 937.00
Los Adjuntas 14.10 970.00
Les Teques 24.30 1,168.00
Los Teques (Llano de Miquilen) 25.30 1,172.00
Guayas 44.30 470.00
Las Tejerias 46.80 500.00
El Consejo 57.50 576.00
La Victoria 65.60 576.00
San Mateo 75.20 479.00
Turmero 83.70 564.00
Maracay 97.90 450.00
San Joaquin 113.70 440.00
Guacara 122.80 430.00
Los Guayos 141.30 440.00
Valencia 148.80 470.00

HIGHWAY FROM CARACAS TO LA GUAIRA

Caracas (Plaza Bolívar) 0 920.00
Agua Salud 2.50 935.00
Catia 4.00 960.00
Blanden 7.15 839.00
Cantinas 9.23 871.00
Pauji 15.20 1,004.00
Las Trincheras 16.26 941.00
El Copey 19.70 770.00
Civucutti 26.38 475.00
Manonga 29.38 215.00
Marquetia 32.38 40.00
La Guaira 34.78 8.00

HIGHWAY FROM CARACAS TO GUATIRO

Caracas (Plaza Bolívar) 0 920.00
Quebrada Honda 3.15 880.00
Sabana Grande 4.15 870.00
Chacaito 4.90 860.00
Los Ravelos 5.90 870.00
Chacao 6.90 880.00
Los Dos Caminos 9.25 860.00
Petare (Plaza) 12.50 840.00
La Cortada del Respiro 18.00 960.00
Quintana 23.00 761.00
Caucaquita 25.00 690.00
El Agaucate 26.50 641.00
Ochoa 29.80 563.00
Mampete 35.00 489.00
El Cercado 38.50 443.00
El Tamarindo 39.70 425.00
Guarenas 45.35 396.00
Guatire 52.35 335.00

HIGHWAY FROM CARACAS TO OCUMARE DEL TUY

Caracas (Plaza Bolívar) 0 920.00
Puento de Hierro sobre el Guairel 1.75 879.00
El Valle (Plaza) 5.35 889.00
Coche 8.55 901.00
Bermúdez 10.25 920.00
Gato Amarillo 11.65 908.00
Bejarno 14.15
Prim 16.75 1,005.00
Cortado del Guayabo 18.15 1,150.00
Maitana 24.65 1,229.00
Maturin 36.50 669.0
Buena Vista 38.20 736.00
Charallave 41.50 692.00
Cantarrana 52.00 307.00
Vallecito 61.50 210.00
Ocumare del Tuy 70.20 210.00

HIGHWAY FROM MARACAY TO OCUMARE DE LA COSTA

Maracay (Alcabala) 0 425.00
El Diamente 22.30 431.00
El Limon 5.30 453.00
La Quesera 6.00 460.00
Guamitas 14.00 720.00
Guacamauyas 17.40 871.00
Piedra de Tranca 22.00 1,045.00
Rancho Grande 23.00 1,085.00
El Portachuelo 24.00 1,120.00
Periquito 30.00 845.00
El Salto 34.00 660.00
Tio Julian 39.00 405.00
La Tulla 44.30 143.00
Cansa Macho 45.00 123.00
Aponto 47.00 88.00
Pueblo Nuevo 52.60 40.00
Ocumare de la Costa 53.30 30.00
Caserio de la Boca 57.90 3.00
Puerto de Ocumare de la Costa 58.70 2.00

HIGHWAY FROM LLANO CAGUA TO SAN FERNANDO DE APURE

Cagua 0 472.00
Ciudad de Cura 20.00 556.00
San Juan de los Morros 45.00
Uverito 76.00
Parpara 83.00 556.00
Ortiz 94.00
Los Dos Caminos 100.00
Morrocoyes 120.00
El Rastro 153.00
Calabozo 175.00
San Fernando Apure 334.00 73.00

HIGHWAY FROM VALENCIA TO PUERTO CABELLO

Valencia (Plaza Bolívar) 0 470.00
Camoruco 1.00 478.00
Mayuanagua 7.80 490.00
El Retobo 9.80
Barbula 12.30
La Entrado 15.30 595.00
Las Trincheras 20.80 360.00
El Cambur 30.80 70.00
Taborda 40.30
El Palito 42.30 3.00
Puerto Cabello (Plaza) 53.60 1.00

HIGHWAY FROM VALENCIA TO NIRGUA

Valencia (Plaza Bolívar) 0 470.00
Bejuma 52.25 662.00
Miranda 69.50 625.00
Salorn 85.25 768.00
Nirgua 100.50 793.00

HIGHWAY FROM VALENCIA TO SAN CARLOS

Valencia (Plaza Bolívar) 0 470.00
Tocuyito 17.00 450.00
Tinaquello 50.00 423.00
El Tinaco 78.75 143.00
San Carlos 98.75 150.00

HIGHWAY CENTRAL FROM THE TÁCHIRA TO SAN CRISTOBAL

Estacion Táchira del Gran 0 370.60
Colón 18.00 800.00
Angostura del Lobaterita 27.30 815.00
Galtineros 34.56 1,150.00
Putachulo de la Paja 38.58 1,257.00
Palo Grande 55.20 1,525.00
San Cristobal 76.20 825.00

HIGHWAY FROM CUMANÁ TO CUMANACOA (IN CONSTRUCTION)

Cumaná 0 16.00
Puerto de la Madera 7.00 45.00
Los Ipures 12.00 105.00
Mochima 20.00 121.00
Cedeno 36.00 166.00
San Fernando 48.00 212.00
Rio Arenas 52.00 215.00
Cumanacoa 56.00 230.00

HIGHWAY FROM BARQUISIMETO TO EL TOCUIYO

Barquisimeto 0 556.00
Quibor 39.00 720.00
El Tocuiyo 69.00 617.00

HIGHWAY FROM EL PAO TO BARINAS

El Pao 0 160.00
San Carlos 57.12 150.00
Acarigua 133.12 186.00
Ospino 179.74 184.00
Guarne 230.75 183.00
Barinas 318.15 180.00

HIGHWAY FROM CHARALLAVE TO SAN CASIMIRO

Charallave 0 307.00
Cua 13.00 240.00
San Casimiro 39.50

HIGHWAY FROM SAN FERNANDO DE APURE TO SAN JUAN

San Fernando 0 730.00
Achaguas 78.12 83.00
San Juan 141.25

HIGHWAY FROM SAN FELIX TO TURMERO

San Felix 0 20.00
Apata 57.50 293.00
Guasipato 160.00
Turmero 220.00

HIGHWAY FROM CORO TO CUMAREBO

Coro 0 1,798.00
La Vela 5.00 120.00
Cumarebo 43.00 13.00

HIGHWAY FROM BARQUISIMETO TO CARORA

Barquisimeto 0 566.00
Banco de Baragua 45.00
Rio Tocuyo 86.00
Carora 116.00 409.90

HIGHWAY FROM TURJILLO TO MOTATAN

Turjillo 0 800.00
La Plazuela 4.00 592.00
Pampanito 14.00 385.00
Motatan 36.00 324.00

HIGHWAY FROM BARCELONA TO SOLEDAD

Barcelona 0 13.00
Cuataquiche 29.60
San Mates 57.60 153.00
Aragua de Barcelona 102.40 110.00
La Canoa 285.00
Mouchal 308.60
Campo a Legra 332.00
Soledad 359.30

HIGHWAY FROM LAS ADJUNTAS TO COLONIA TOVAR

Las Adjuntas 0 970.00
Macarao 3.00 1,000.00
Palo Negro 6.30
Alto de No Leon 19.30 2,100.00
Alto de Lagrenazo 25.30 2,330.00
Colonia Tovar 32.30 1,802.00

HIGHWAY FROM LOLONIA TO EL CONSEJO

Colonia Tovar 0 1,802.00
Portero Perdido 3.00 1,680.00
Topo Carrizalito 9.00 1,910.00
Caserio Quebrada 19.00 1,590.00
El Consejo 25.00 576.00

HIGHWAY FROM LA COLONIA TO LA VICTORIA

Colonia Tovar 0 1,802.00
Alto de Launita 5.50 1,680.00
Alto Gabante 10.00 1,910.00
El Pinto 20.00 1,756.00
Hacienda 22.00
Hacienda Sabaneta 23.40 600.00
La Victoria 27.90 576.00

The charge for freight on the railroads is rather high, $.58 per hundred pounds, and the passenger rate averages 10c. per mile. Hotel accommodations are not scarce nor are they excessive in prices. Statistics show that European commercial travelers can live on $3.50 to $4.00 per day while it costs the average American $7.00 per day. The hotels are not as modern as in the States but are very clean and suitable. The food is exceptionally good and wholesome.

The means of transportation by automobiles are as modern as those of some of the largest cities of the world. The majority of the cars are high priced and high powered as they are designed to climb to high altitudes in the surrounding mountains.

It may be stated that the financial condition of Venezuela is superior to that of any other country in Latin-America with the exception of Argentina. Her public debt has been decreased and her financial standing, although established comparatively few years ago, is very high.

Germany, France and England prior to the war practically had a monopoly on the Venezuelan trade, due largely to the long credits offered by them to the Venezuelan merchants. Before the war the above mentioned countries extended credit from four to nine months. The policy has changed now and the merchants are satisfied with from three to four months' credit. The reduction of the long term credit is also due to improved banking methods, and it is expected that trade will soon reflect the change when conditions are settled.

At the present time many of the exporting houses in the United States are dealing on either a 90 day sight draft or a 120 day draft dated New York. This system has been approved by the Credit Association of America.

Since practically every exporting or importing country is represented in Venezuela at the present time by bank affiliation, the average commercial traveler encounters very little difficulty in having his drafts or letters of credit honored. The difference in rate of exchange is an important item and should be carefully considered by all commercial travelers upon arriving in Venezuela. The exchange fluctuates slightly, the rate now being $5.35. The standard of value is the bolivar, valued at $.193, American gold.

One of the most exasperating difficulties confronting all commercial travelers is their ignorance of the metric system. The system has always been in effect here and must be learned in order to transact business.

The customs duties of Venezuela are very high, more so than in many other Latin-American countries. The high protective tariff has been a means of increasing the revenue of the country but on the other hand it has made it practically impossible for the poorer classes of Venezuela to purchase foreign made goods. Another purpose of the high protective tariff is to protect home industries but the fact remains that the manufacturers in Venezuela can not supply the demand. In many cases the tariff is so high that it is inadvisable for outside merchants to attempt to do business there. For example, it would be very poor business judgment for a shoe salesman to attempt to sell shoes in Venezuela as that industry is well protected by the tariff. The same applies to many other industries. Appeals have been made to the Venezuelan government to lower the tariff but as yet it has not complied with the request. Tobacco is another protected industry. American cigarettes in Venezuela retail for as much as three times the price in the States. The reduction of the tariff will open a greater field for all commercial travelers and will mean an increased foreign trade for Venezuela.

Before concluding this report it may be useful to say a word regarding the present opportunities for commercial travelers in Venezuela and the attitude of merchants in that country as to American travelers. The writer has visited Maracay, Caracas, Valencia and La Victoria, and after talking with business men reached the conclusion that American commercial travelers are considered among the best and are most welcome. The only complaints heard were that American concerns would not allow more than a three months' credit and that the packing of goods for shipment has been deplorable. The Englishman with his great variety of goods such as woolens, cottons, crockery and with facilities for long credit has gained the confidence of the merchants and has built up considerable trade throughout the country. Germany prior to the war also had considerable trade with Venezuela due to their banking facilities and diversity of products. Before the war, for example, Germany had a monopoly on the dye industry and the toy industry and was thus able to establish herself successfully in Venezuela. American business houses prior to the war had not realized the importance of Venezuelan trade until the establishment of the International High Commission, an organization which has brought South America and North America into closer contact and thus assured friendly relations.

The old proverb has it that "Commercial travelers are here to-day and away to-morrow." As the proverb is undoubtedly true, the only way to leave a favorable impression with all is to smile, be courteous, considerate and clean, not only in business transactions but in morals as well. The possession and exercising of these social qualities will be of inestimable advantage not only to commercial travelers but to the good name of the United States.

_W. J. Donnelly._

PRESENT FOREIGN INVESTMENTS IN VENEZUELA AND FUTURE OPPORTUNITIES FOR AMERICAN CAPITAL