References Used.—History of South America, W. H. Koebel; With the Trade Winds, Ira Nelson Morris; The Land of Bolívar, Statesman's Yearbook, 1918-1919; Reports of International High Commission; Reports of Minister of Finance (Venezuela); Official Gazette of Venezuela.
References Used.—History of South America, W. H. Koebel; With the Trade Winds, Ira Nelson Morris; The Land of Bolívar, Statesman's Yearbook, 1918-1919; Reports of International High Commission; Reports of Minister of Finance (Venezuela); Official Gazette of Venezuela.
The United States of Venezuela occupies the northernmost part of South America bounded on the ocean side by the Atlantic and the Caribbean and on the land side by British Guiana, Colombia and Brazil. It has an area of 393,976 square miles (1,020,396 kilometers) with a population, however, of only 2,848,121 or approximately 7 to the square mile. This is in striking contrast with the figures obtained from the United States Census of 1920 which shows an average population of 35.5 to the square mile.
Venezuela is divided geographically into four zones, thellanosor large plains and river valleys which afford excellent opportunities for the raising of cattle, themountain section, formed by three mountain ranges, thetable landsor plateaus and themining zone. Venezuela covers the same extent of superficial area as France, Belgium, Holland, Denmark, Switzerland, Portugal, the United Kingdom of Great Britain and Ireland. The country is especially fortunate in having an immense coast line which extends over 1,800 miles. It has 32 ports, some 50 creeks and bays, 7 peninsulas and 7 straits. Besides the Lake of Maracaibo, which is the largest and of special importance, there are also 204 smaller lakes, 60 rivers, 8 of which are of the first magnitude. Along with the variety of physical features Venezuela has a variety of climate which permits the raising of many crops of the tropical and temperate zones.
Venezuela was sighted by Columbus on his third voyage in 1498, when he entered the Gulf of Paria and sailed along the Delta of the Orinoco. In 1550 this territory became the Captain-generalcy of Caracas and remained under Spanish rule until early in the nineteenth century.
The modern history of Venezuela dates from the year 1813 when Simón Bolívar took up arms against the Spanish Government and finally defeated them at the Battle of Boyaca on August 7, 1819. Two years later at Carabobo the Royalist forces were entirely routed and an end was put to Spanish control in South America.
Simón Bolívar is venerated in Venezuela as the father of his country, a title which he richly deserves. He was born in Caracas in 1783 and from his earliest years his life seemed to be dedicated to the cause of freedom. As a young man he studied in France and was an eye witness to many of the scenes of the French Revolution, so that the spirit of freedom and revolt against despotic government was further intensified in him.
After his victory over the Spanish forces in 1821 Bolívar was formally appointed President of Colombia which then included the present republics of Venezuela and Ecuador. In 1830 Venezuela separated from Colombia and became an independent state. The remainder of Bolívar's public career was devoted to tireless labor in behalf of his people that they might enjoy a stable and beneficial government. He died at Santa Marta on December 17, 1830, almost penniless after having labored throughout his entire life in the interest of his native country.
On March 30, 1845, Spain recognized the independence of Venezuela in the Treaty of Madrid.
A period of successive revolutions followed until finally in 1870 Guzman Blanco assumed control of the country as dictator. Evading the provisions of the constitution which prohibits the election of a President for successive terms, Blanco successfully arranged through two decades for the nomination of some one of his colleagues who was to hold office as a figurehead.
The people finally tired of this procedure and in 1889 there was a revolt against the dictator which resulted in his overthrow.At the elections which followed General Andueza Palacios was elected to the presidency, but another revolution followed in 1891, during which Palacios was unseated and General Crespo, his vanquisher, took up the reins of government.
During the administration of General Crespo trouble arose with Great Britain over the boundary between British Guiana and Venezuela. President Cleveland intervened in 1895, urging arbitration and finally in 1899 the matter was amicably settled. This difference with Great Britain left certain memories with the Venezuelan people which for a long time operated to the discouragement of British capital.
After another series of revolts, General Cipriano Castro became president in 1900. Internal disturbances continued and in addition to this misfortune, Castro ruled as a dictator, employing corrupt and revolutionary methods which not only aggravated the domestic disease but ruined credit before the nations of the world. In 1907 the Belgium debt was repudiated and the following year trouble arose with Holland regarding the harboring of refugees in Curaçao. Diplomatic relations were also broken off with England, Italy and France during Castro's administration. Finally, in 1908 he found it advisable to retire to Europe and in his absence Juan Vicente Gómez, the Vice President, took control and was installed as President in June, 1910. General Gómez still exercises the supreme power in his capacity as Commander-in-Chief of the Army.
(See Reports on Agriculture, Minerals, and Animal Industries.)
There are four national banks in the country—the Bank of Venezuela, the Bank of Caracas, the Bank of Maracaibo and the Commercial Bank. These four banks issue paper currency, which is not legal tender, although generally accepted as such.
Previous to the establishment of branch banks in Venezuela by foreign concerns, the majority of import and export houses doing business in the Republic were engaged in domestic and foreign banking business. As a general rule, these merchants charged such a high rate of interest that individuals could notimprove their property nor prosper in their regular agricultural pursuits.
In 1916 the Royal Bank of Canada opened a branch in Caracas and in several other places in the country. Three years later the National City Bank of New York entered the field and opened branches in Caracas and Maracaibo. Other concerns which have opened branches are the Anglo-Spanish-American Bank, Ltd., The Commercial Bank of Spanish America, Grace & Co. of New York through their branch, the Venezuela Commercial Company, and The Mercantile Bank of the Americas.
The currency is on a gold basis and gold coins of foreign countries are accepted as legal tender. The coinage of silver and subsidiary metal is restricted.
The bolivar, named in honor of the Liberator, is the monetary unit and contains 1-1000 part of a kilogram of gold.
Gold coins are issued in 5, 10, 20, 50 and 100 bolivar pieces. Silver coins are issued in 1, 2½, 5 bolivar pieces and 50 and 20 centimo pieces. The smaller, token coins, are of nickel in 12½ and 5 centimo pieces. The five-bolivar piece is commonly known as the "fuerte" and is worth $.96½ in U. S. gold.
Capital can be supplied in either of two ways: by investors from foreign countries or through loans made by the government of Venezuela to individuals who are unable to interest outside capital. For the welfare of the country, the latter seems to be more advisable, as it would reach a larger number of small farmers who are not in need of large sums, and who moreover are not familiar with the financial requirements of foreign investors.
A provision similar to the Federal Farm Loan Act passed in the United States in July, 1917, would be of immense importance in aiding agriculture enterprises.
The lack of immigration has long been a serious problem in the economic development of this country; it can only be said that the government has this question under discussion and probably something will soon be done to induce immigrants to come to Venezuela where a multitude of opportunities await them.[2]However, it will be necessary for the government toassure this class of prospective citizens that the bulk of desirable land is still in the hands of small holders and that the power of the government is sufficient to protect the small farmers.
[2]See report on new Immigration Act, pp. 39-41.
[2]See report on new Immigration Act, pp. 39-41.
In spite of the fact that the country is very sparsely settled, the present railroad system is inadequate and large tracts of land are of little or no value because of the expense of handling the products. Obviously, the products of these areas can not successfully compete in the world's markets, if the margin of profit has been absorbed antecedently by high transportation expenses.
The oldest railroad is the Bolívar Railroad which was begun in 1873. It is a 24-inch gauge, 176½ kilometers long and extends from Tuscasas to Barquisimeto. The La Ciella line was authorized in 1880 and has a 91-meter gauge and a length of 81½ kilometers.
The most important road and one of the few which has paid any returns is the La Guaira to Caracas line, which is about 23 miles long and was built by British capital.
In passing it can truly be said that railroad development has been retarded as much by political insecurity as by the undeveloped industrial state of the country, the topography and the expense of securing railroad equipment. However, the present administration is giving considerable attention to this need and an extensive program of wagon-road building is now in process of construction and plans have also been perfected for extensive railroad expansion.
The Republic of Venezuela was founded in 1830 by separation from the other members of the "Free State" established by Simón Bolívar within the limits of the old Spanish colony of New Granada. The Constitution was modeled after that of the United States of North America, but greater autonomy is allowed to provincial and local governments.
The chief executive is the President, elected for a term of six years, assisted by six ministers and a Federal Council of 19 members. The Federal Council is appointed by Congress every two years; the Council chooses a President from its own members, who is also President of the Republic. Neither thePresident nor members of the Federal Council can be re-elected for the following period.
The legislative branch of the government is divided into two houses called the Senate, whose members are elected for six years by the State Legislatures, and the House of Representatives, whose members are also elected for a six year-period, but by direct vote, one to each 40,000 inhabitants.
The country is divided into 20 States, 2 Territories and a Federal District. The National Congress includes 40 Senators and 52 Representatives. Each state has an equal number of representatives, each having a legislative Assembly, whose members are chosen in accordance with its respective constitution.
Venezuela stands to-day upon the threshold of great interior development especially in agriculture and cattle-raising. Her position is similar to that of the United States after the Civil War when vast areas, sparsely settled, lay awaiting the movement of population to develop them. Her mineral resources are practically untouched and opportunities await foreign capitalists who are familiar with the development of new countries.
The political situation, however, should not be neglected. W. H. Koebel in his "History of South America" says, "No state of South America can show such a perpetual ferment, such a fog of unrest and strife hanging over and choking its development as this." Whether or not the past eight years of stable government and national prosperity has demonstrated to the people of Venezuela the proper course to follow is a question beyond the scope of the present inquiry.
In any event, the foreign investor will be well advised if he places his capital in Venezuela only after mature consideration of the political changes of the last two decades and the ability of the present administration to carry through its policy of enlightened development.
James F. Costello.