PART I

FOREIGN TRADE OF VENEZUELA

Where there is population, industry and resources, there will be international trade. Venezuela is lacking in population and her industries are scarcely in the first stages of development, but she possesses natural resources which command a world market. The three essentials of commerce are: (a) transportation, (b) freedom of labor and exchange, (c) security; and at the root of all trade must be moral integrity.[21]

[21] Ency. Brit., "Commerce."

Until the beginning of the present administration, Venezuelan commerce has been fitful and unsatisfactory. Under the Gómez régime, however, the country has taken great strides forward, especially in internal development and in the establishment of a national credit of which it is justly proud. As a result, her foreign commerce, except for a slight falling off at the beginning of the war period and a rather sharp decline in 1918, has shown a steady growth.

Transportation gives commodities and persons "_place utility_" and until the establishment, recently, of a splendid system of motor roads, as yet but little used, Venezuela has been lacking in this respect. Natural resources, in the absence of local manufacturers, become worthless without means of transportation to the coast for export. In 1908 there existed but thirteen railroads in Venezuela with a total mileage of 540 kilometers[22] connecting a few of the richest and most accessible regions with the coast, and the year 1920 finds no increase either in number of roads, or in total mileage. Fertile inland regions are still without outlet for their products and vast mineral wealth and forest resources lie untouched, awaiting transport facilities.

[22] Central Executive Council, International High Commission, "Venezuelan Financial and Economic Conditions," and Ency. Brit., "Venezuela."

The Venezuelan coast line extends for 1876 miles and possesses in all 32 ports of various sizes, more than sufficient to handle the potential commerce of the country. The amount of commerce passing through these ports, though steadily mounting, has in no one instance approached the limit. These ports have developed in spite of onerous tariff regulations and other handicaps, because the demand for the riches possessed by the Republic in the shape of natural resources is too insistent to be checked by natural or artificial barriers.

The principal industries are agricultural and pastoral, the most important agricultural products being coffee, cacao, sugar, tobacco, corn and beans.[23] Manufactures are few in number and those existent for the most part flourish mainly by the help of severe tariff discriminations. These manufactures include the following lines: beer, hats, candles, ice, chocolates, matches, cigarettes, boots and shoes, cotton goods, drugs and medicines.

[23] International High Commission, "Zones of Venezuela."

There are several electric plants in Venezuela and a few factories for the manufacture of agricultural implements. On the whole, however, Venezuelan manufacturing is still in its infancy and the country must depend on importation for nearly all her manufactured wares; this flow of importation is conditioned by the nature of the population whose purchasing power, except for the gentry of Caracas and a few of the more advanced cities, is limited, in great part, to the barest necessities of life.

On the whole, the World War had a beneficial effect on Venezuela's foreign commerce. At the outbreak of the war, Europe withdrew her shipping and Venezuela's foreign commerce was hard hit. The year 1914 witnessed a sharp decline, but gradually in the ensuing years the figures mounted until in 1917 they were nearing the pre-war totals, only to fall off sharply in 1918. Advanced statistics for 1919, with no return from the Aduana of Maracaibo, indicate a phenomenal increase both in imports and exports for 1919 over the previous year. The value of Venezuela's total foreign commerce by years, in millions of bolivares, follows:[24]

1913 Bs. 246 1914 184 1915 191 1916 228 1917 239 1918 179 1919 315

[24] "Alta comisión internacional," Sección Venezolana, Caracas, 1919; "Memoria de Hacienda," 1919.

In 1917 the imports into Venezuela from the United States amounted to 70% of her total imports. For the same year, Great Britain's share of import trade was 16% and all others 14%. The same for 1918 follow:[25]

United States 60% Great Britain 30% Others 10%

[25] Bureau of Foreign and Domestic Commerce, "Venezuela."

In 1917 the exports from Venezuela were apportioned as follows:

United States 55% Great Britain 11% Others 34%

The same for 1918 follow:

United States 45% Great Britain 17% Others 38%

Incoming shipments by parcel post for 1917 amounted to Bs. 3,837,916 ($740,719.00), the principal articles coming by this method being drugs, medicines, jewelry, watches, hats, cotton goods, silks and rubber manufactured goods.

IMPORTATION BY PARCELS POST

_Source_ _Year_ _Year_ _1917_ _1918_ _1919_ U. S. $350,339 92,423 (not available) France 228,559 56,648 Italy 76,127 59,923 United Kingdom 61,626 94,258 Spain 19,570 3,595 Others 4,498 20,100 -------- ------- Total 1917 $740,719 $524,947 Total 1918 524,947 -------- Decrease 215,772

Although the foreign trade of Venezuela actually decreased during the war, the country was indirectly benefited by the turning of the energy of the nation to the development of natural resources, which, in turn, must mean in due course an increased surplus of production for export. Furthermore, the shortage of shipping during the war necessitated the use of existing bottoms to the fullest extent with a consequent effort towards the improvement of terminal facilities and an increase in the speed of loading and unloading cargo carriers. As a result of this feverish war activity, a number of Venezuelan ports now possess modern equipment for speedy handling of cargo and with the products of the country moving seawards in increasing quantities, Venezuela's harbors should be attractive ports of call for tramp steamers and conducive to the establishment of other routes of liner traffic.

The principal articles imported into Venezuela are cotton, textiles, wheat flour, machinery, agricultural implements, kerosene, drugs and medicines. The principal exports are coffee, cacao, balatá, hides and skins, rubber, gold, copper, sugar, asphalt, heron plumes and cattle.

Estimating the bolivar at .193 cents gold, the accompanying figures show the extent, in United States currency, of Venezuela's foreign trade:

1917--Imports $22,188,223.08 Exports 23,164,701.60 -------------- Total $45,352,924.68

1918--Imports $14,908,275.39 Exports 19,813,216.67 -------------- Total $34,721,492.07

A decrease in imports for 1918 over 1917 of $7,279,947.69 A decrease in exports for 1918 over 1917 of 3,351,484.93 -------------- A total decrease in foreign trade for 1918 over 1917 of $10,631,432.62

1919--Imports $27,020,000.00 Exports 33,196,000.00 -------------- Total $60,216,000.00

An increase in imports for 1919 over 1918 of $12,111,724.61 An increase in exports for 1919 over 1918 of 13,382,783.33 -------------- A total increase in foreign trade for 1919 over 1918 of $25,494,507.94

(Above figures were compiled from official sources; advance estimates for 1919 from "Memoria de Hacienda, Ano civil de 1919.")