The gradual advance of Venezuela into a position of real importance in the commonwealth of nations can hardly be considered to have commenced till the country took approximately its present political boundaries and organisation, since before that time the movement in commercial dealings with the outside world had been fitful and very retrogressive.

The casual coincidence of some of the colonial and republican provinces prior to 1830 is, however, a sufficient excuse for a brief review of the course of such development as took place between the discovery of South America and the final severance of Venezuela from Colombia.

As has been seen in the sketches of the early history of Venezuela, the pearl fisheries of the Caribbean Islands were the lure which first attracted a band of settlers who, however unworthy of the title of pioneers or merchants, were nevertheless the first traffickers who carried the produce of the New World to Europe. The value of the pearls exported in the early years of the sixteenth century appears to have been very great, and equal to, if not in excess of, all the produce and merchandise shipped annually from the colony of Venezuela in the closing years of Spanish rule. After the destruction of the pearl fisheries by the reckless and extravagant exploitation of the conquistadores, the value of the exports varied according to the quantity of gold and precious metals extorted from the Indians, and little trading was carried on.

As the easily accessible stores of gold decreased, the Court of Spain sought to acquire gain in a not entirely new fashion from the colonists by selling them to the Compañía Guipuzcoana in 1728, which, at first but a chartered company with special privileges, soon obtained a monopoly, and became by its extortions the cause of the first attempt at revolt on the part of the captaincy-general. At length their rights were abrogated in 1778, and the commerce of the colony was at liberty again to develop in a normal fashion; though the continued arbitrary opening and closing of the ports to foreign nations could not but render any advance very fitful. In 1796 the imports into Venezuela during one of the “open” periods reached a total of over £600,000, and in 1810 the increasing quantity of tropical produce transmitted to the East was nearly one million pounds in value.

Though, under the republic, the commerce of the country has greatly increased, the twenty years following the Declaration of Independence were a period of great industrial depression. For the first ten years or so the war with Spain practically put a stop to ordinary trade with foreign countries; during the joint administration of the three provinces of Venezuela, New Granada, and Ecuador in the Great Colombia of Bolivar, Venezuela suffered in all departments of her life, until at last the union was severed in 1830, and from that date it is possible to compare the progress of Venezuelan commerce with that of other nations; for convenience this has been expressed in a diagram, the solid line corresponding to exports and the dotted line to imports. The zenith of Venezuela’s prosperity in the seventy years was reached during the Presidency of Guzman Blanco, the figures for the present day being far below these. The excess and growing excess in value of exports over imports is natural in a country rich, as Venezuela is, in easily won agricultural and mineral resources but poor as yet in manufactures and shipping; and that this is so may be readily seen from the detailed table of exports and imports for 1909-1910 given in Appendix B.

As may be seen from the tables in Appendix B, the largest exporter to Venezuela at the present time is the United States, with Great Britain second and Germany third. It is only within the last two or three years that the United States have advanced to this position of superiority in the trade of the republic, Great Britain having previously held the lead. There is little need to inquire into the cause of this influx of American goods, when in travelling through even remote parts of the country one meets with travellers exhibiting and praising American inventions and manufactures such as are calculated to appeal to the Venezuelan public, and this in spite of the fact that at the present time the American, as such, apart from his personal attractiveness or otherwise, is not persona grata in the country. The big stores, with branches in most of the more important towns, are mainly in the hands of Germans, but the goods sold are largely British and American. More than one of them attributed their possession of this trade to the fact that they are willing to live in the country and work there for a far smaller return at present than the British trader; but the day of small things is not to be despised, and in view of the expansion of trade and the amelioration of the standard of living evident at the present time in Venezuela, there is a great opportunity for British merchants to adopt the persevering tactics of the German, and to some extent the pushfulness of the American, not only to increase the sale of their products already shipped in large quantities into Venezuela, but to do the selling themselves.

The chief medium of exchange has been continuously since 1812 the coinage of the republic, which was at first issued after the Declaration of Independence from the old royal mint at Carácas, but for many years all the best known European moneys of the higher denominations were accepted at a fixed rate. In 1848 the franc was for a short time adopted as the unit, followed by the Venezolano (1854), and in 1879 the bolivar, equivalent to a franc, was first suggested, but only finally standardised in 1891, since which time it has remained the unit.

Banks were first established in the early eighties, but the big commercial houses, both before and since that time, have carried on a good deal of banking business. The recognised banking institutions of the country are three in number, all being permitted to issue notes pending the establishment of a long-mooted National Bank.

The Banco de Venezuela has a nominal capital of B 12,000,000, of which three-quarters is paid up. A charter was first granted by the Government to a group of Venezuelan merchants and capitalists on March 24, 1882, to form a Banco Commercial, but in 1903 it became, and has since remained, national as well as commercial. In August, 1890, the bank was reconstructed as the Banco de Venezuela, with a capital of B 8,000,000, the charter to hold good for fifty years; it underwent a second reconstruction in 1899, since which date the nominal capital has been B 12,000,000, divided into 600 shares of B 20,000 each, in the hands of 276 shareholders. The note issue is B 2,000,000, and the reserve fund at the end of 1908 was B 1,200,000. The dividend declared that year was equal to 8 per cent. on the total capital. The bank has its headquarters in Carácas, with fourteen agencies in the towns of the republic.

The Banco Carácas was incorporated on August 23, 1890, the charter holding good for forty years. The nominal capital is B 6,000,000, divided into 600 shares of B 10,000 each, and there are now 137 shareholders. The note issue is B 801,000, the reserve fund at the end of 1908 being B 579,483, while the dividend declared in that year was equivalent to 3·9 per cent. on the capital. The bank is wholly devoted to commercial business, and has its headquarters in Carácas, with various agencies throughout the republic.

The Banco de Maracaibo received a thirty-one-years charter on May 11, 1882, and was incorporated with a capital of B 1,250,000, of which three-quarters has been paid up. The 3,750 shares are held by 161 persons, who received in 1908 a dividend of 9 per cent. on the total capital; at the end of that year the reserve fund was B 125,000, while the note issue was B 1,895,000. The headquarters of the bank are in Maracaibo, and there are various agencies in the western States of the republic.

The National Debt of Venezuela dates in the first place from a few years after the Declaration of Independence, but until 1830 it was, of course, included with that of New Granada and Ecuador in the Great Colombia. At that date the various internal floating debts on the custom-houses were consolidated at 5 per cent. and a further consolidation was authorised in 1840. In 1845 a further arrangement was made under the treaty with Spain for the payment of indemnity to Spanish subjects whose property had been confiscated by the republic. Later loans have been raised for certain public works, &c., bringing the total internal debt in 1909 to over two and a half million pounds.

The external debt has a more eventful history, and dates from 1820, when the first moneys were borrowed by Colombia in London. £547,783 was the amount raised, the interest payable being at 8 per cent. if paid in London and 10 per cent. if paid in Colombia. At the division of Colombia in 1830 the total debt had increased to £9,806,406, of which £3,180,456 was for arrears of interest; the new republic was adjudged responsible in 1834 for £2,794,826, being £1,888,396 of the original debt, with £906,430 arrears. In 1840 an attempt was made to put matters on a regular footing by the issue of bonds for the outstanding capital debt, bearing interest for the first seven years at 2 per cent., with a subsequent increase to 6 per cent. at the rate of ¼ per cent. annually. Deferred bonds were issued for the arrears bearing interest at 1 per cent. for the first year with a ¼ per cent. annual increment up to 5 per cent. The total value of bonds issued was £2,007,159, the interest being paid regularly until 1847, when internal troubles prevented the payment of the October dividend.

After a period of chaos, a further arrangement was made in 1859 by which the earlier ordinary bonds were to be exchanged for others paying 2½ per cent. for the first year, and 3 per cent. subsequently, while similar bonds were to be issued for the arrears on both ordinary and deferred stock. The deferred stock was to be exchanged for 1½ per cent. bonds. Finally the bondholders agreed to accept 3 per cent. stock for the arrears of interest from 1840 to 1847, with a 2 per cent. cash payment in September, 1860.

In 1862 a £1,000,000 loan was arranged through Baring Brothers, in London, the issue to be at 63 per cent., the bonds to bear interest at 6 per cent. with 2 per cent. annual redemption. The security was 55 per cent. of the La Guaira and Puerto Cabello import duties; two years later a further loan on the same terms was issued through the General Finance and Credit Company of London, the issue price being 60 per cent.

In 1880 the bonds and loans since 1859 were converted into a new consolidated debt of £2,750,000 at 3 per cent. By resolution of August 5, 1887, the diplomatic debt (to France and Spain) was added to the National Debt, and these two branches of the external debt were duly recognised in 1889, the diplomatic claims of about £200,000 being paid interest at the rate of 13 per cent. Internal disturbances prevented the payment of interest in 1892 and 1893, but otherwise the amounts were regularly forthcoming.

In 1896 a further loan of £2,000,000 was authorised for the payment of the guaranteed interest to certain railways, and for acquiring and completing other lines. This loan, issued by the Diskonto Gesellschaft in Berlin at 80 per cent., bears interest at 5 per cent., but the requisite sum was not paid by Venezuela either for this or other debts in 1897, and only partial payments were made down to August, 1901, when they ceased altogether.

In 1903 payments were resumed, and between that year and 1907 the amounts awarded to the three favoured nations after the 1903 blockade were paid off, while the sums due to other nations were reduced before 1910 from B 21,000,000 to B 13,000,000. In 1905 also the old English 3 per cent. debt and the 1896 loan were united under the name of the Three Per Cent. Diplomatic Debt. Between 1906 and 1910 over B 33,000,000 of debt were paid off, the total at the beginning of that year being B 207,995,052.72 or £8,111,807. At the close of the year this had been further reduced to B 197,807,477.83, or £7,714,490. Nearly £400,000 was thus paid off in the first year of General Gomez’s presidency.

The natural resources of the country have received little attention hitherto, in comparison with the abundance and extent of the opportunities for investment of capital. The desultory attempts at development have in many cases met with extraordinary success, the best known instance being that of the Callao goldmine, while the return obtained for capital has been very high both for Venezuelans and foreigners; the failure of at first successful enterprises or the failure of others from the commencement has in nearly every case been due to lack of foresight, careless management, inadequate or inflated capital.

The republic has been best known to miners as a producer of the rarer metals and minerals, but the more satisfactory, if less showy, resources are not wanting, though some, such as the fine building and ornamental stones, have been absolutely neglected.

In many parts of the Caribbean Hills the Segovia Highlands, the Andes, as well as the Maracaibo and Coro lowlands, deposits of coal are known to exist, and have been worked in a perfunctory manner in various regions. There are minas de carbon de piedra west of Maracaibo, where the coal appears to be of very good quality; and similar seams have been extracted near Coro by shallow workings. The most extensive coalmines are those of Naricual, some fifteen miles eastward of Barcelona.

The ores of the other great staple mineral, iron, are vaguely referred to in descriptions of various imperfectly known parts of the country, but the only deposit which has hitherto attracted the interest of capitalists is that of Imataca on the foothills of the range of the same name in the Delta-Amacuro territory, on the banks of the Caño Corosimo. The veins are said to be numerous and extensive, and 700 tons were shipped to Baltimore in 1901, when the ore was examined and described as magnetic with 60 to 70 per cent. of iron. The main deposit is known as Imataca, but neighbouring minas bear the names of Tequendama, El Salvador, Nicaragua, La Magdalena, El Encantado, Costa Rica, and Yucatan; a concession for the whole of the known ferriferous area was granted on August 14th of last year (1911) to the Canadian-Venezuelan Ore Company, Limited, of Halifax, N.S.

Salt is, perhaps, the most profitable source of mineral wealth, in view of the Government monopoly, only certain persons being licensed to mine or otherwise obtain it. One of the richest sources is the salina of Araya, discovered by Niño in 1499, where there is an extensive surface deposit of pure sodium chloride; the majority of these salinas are situated on the dry, treeless stretches formed by ancient marine deposits, from which the salt is obtained by digging pits, these being filled with water in such a way as to dissolve out the salt of the surrounding sands and clays, and then evaporated to dryness in the sun. Several thousands of tons are obtained annually in this way near Maracaibo, on the Island of Coche, while some is also produced near Barcelona. The Coche salt is said to be the whitest and finest, but much of the inferior yellow variety is consumed in the Andine States.

Venezuela has long been known as a source of asphalt, and there are indications of the existence of the parent mineral, petroleum, all over the northern and western States. A few desultory and ill-advised attempts have been made to develop the petroleum resources in such places as Pedernales, in the Delta, and other localities near the coast; but the only satisfactory work has been carried out by the Venezuelan Compañía de Petroleo del Táchira, in the southern part of the State of that name, where for some years the oil was raised in shallow wells, refined, and sold in the neighbourhood for illuminating purposes. The more easily worked and discovered asphalt deposits have been mined both on Pedernales Island and the mainland near the Gulf of Paria, where the Bermudez asphalt “lake” is found near the Guanoco River; the area covered by the black, pitch-like residue of petroleum here is said to be considerably larger than the famous “pitch lake” of Trinidad, but the thickness of the deposit is less. The total amount exported in 1908 amounted to 37,588 metric tons, most of which was from the Bermudez property, Pedernales having only been exploited by a German company for a short time about ten years ago.

The only other non-metallic mineral which has been developed in any way appears to be sulphur, which occurs in considerable quantities near Carúpano, some eighteen kilometres from the port, in the mountains. A German company was formed in 1903 with a capital of 2,000,000 marks to work the deposit.

Copper ores are believed to exist at many places in the mountains of Venezuela, and the mines of Seboruco, Bailadores, and other places, both in the Andes and the Caribbean Hills, were worked formerly with profit. A rich deposit has recently been opened up near Pao, in the north part of the State of Cojedes, but the chief development of this resource of the country has taken place at Aroa, in the State of Yaracuy. Here extensive plant was set up some twenty years ago by a British company, and large quantities of regulus were shipped from Tucacas, the maximum being 38,341 tons in 1891. This earlier work came to an end, however, owing to the fall in prices, and the mines have only recently been reopened, when on a small capital they have made very large returns under the able management of Mr. Scrutton; the amount of ore exported in 1908 was 3,334 metric tons, and in 1909-10 4,950 metric tons, valued at about £7,000.

Gold has always since the Conquest been one of the principal attractions offered by Venezuela to prospectors and some few capitalists, and it must be acknowledged that the evidence of the various attempts proves that gold in great quantities exists in the Callao region, where the majority of the mines have been located. Lack of experience and carelessness among the managers of the earlier concerns have led to shutting down of mine after mine, when once the more accessible parts of the vein have been exhausted, or it has been lost by faulting. Among the earlier mines the El Callao was perhaps the most famous, but at all times the mining industry in this remote region has been hampered by the cost and difficulty of transport, a drawback only to be removed by the construction by the Government either of proper macadamised roads or of railways, preferably the former to begin with. In spite of the various difficulties, however, the quantity of gold exported from Ciudad Bolivar in 1908-9 was 385·774 kilograms, and in 1909-10, 601·974 kilograms.

No visitor to Venezuela who penetrates far enough into the country to catch a glimpse of the Llanos can fail to be impressed with the possibilities of the country in stock-raising and exporting, and yet this great area of pasturage supports, in proportion to its extent, a mere handful of cattle and horses. The quality of the grass of the Llanos may be inferior to that of the Argentine Pampas, but even such a defect, if existent, may be improved in time, and so far no pedigree stock have ever been introduced, nor has the industry ever been seriously handled.

In 1804, according to Depons, there were 1,470,000 cattle, horses, and mules on the Llanos, and by 1812 the total number had increased to 4,500,000; but during the wars of independence, owing to the depredations by the opposing armies, the number was greatly decreased, and in 1839 was still only a little over 2,000,000. In the meantime, however, the excellent qualities of the Barquisimeto tableland and the Coro and Maracaibo lowlands for breeding goats had been discovered, and the export of goats’ horns and hides has been continuously an important item in the trade of Western Venezuela. In 1888 the number of heads of stock on the Llanos had increased to 8,500,000, and at that period many were exported to the other States and islands of America, a few even to the United States. Ten years later revolutions and counter-revolutions had decreased the number to 2,000,000.

The export trade in live stock has never attained very great dimensions, and in 1909-10 the value was £40,374, while the always more important item of hides, horns, and hoofs of cattle and goats was valued at over £320,000. The establishment of the Venezuelan Meat Products Syndicate works for shipping frozen meat from Puerto Cabello should do much to encourage an industry as yet in its infancy and yet of incalculable interest to the country, once properly developed.

As is the case with other resources, of the many agricultural products of Venezuela only a minority have been energetically developed, in some degree on account of lack of population to collect the natural fruits in such prolific regions as Guayana, but also on account of failure to appreciate the natural advantage of the many climates to be found within the northern part of the country, where may be grown, not only the rare fruits of the tropics but the, to many, more pleasant fruits and flowers of the cooler zones.

The three cultivated plants which have multiplied sufficiently to form the basis of considerable industries are coffee, cacao, and sugar-cane. Of these coffee was first introduced from the West Indian Islands towards the end of the eighteenth century, and the plantations now cover much of the cultivated land of the northern hills. The bushes grow anywhere between elevations of 500 and 2,000 metres, but the region immediately below the 1,000 metre line is found to be the best; and at this elevation flourishing plantations are to be found in the central part of the Coastal Cordillera, and in the Andes; the Carabobo and Segovia coffees are not so good, however, as those grown elsewhere. The plants are set from 1,600 to 1,900 to the hectare, each when matured producing ¼ to ½ lb. annually, or 400 to 950 lbs. per hectare, the life of each bush being taken as about fifty years. The value of the coffee exported in the year 1909-10 was nearly £1,500,000.

Cacao is indigenous to Venezuela, and the wild trees abound in the forests of Guayana. Before the advent of Europeans it is believed that no cultivation of cacao was carried on, but the plantations of Venezuela produce some 8,000 tons annually at the present time, of which some is renowned above all other cocoa of the world. The chief cocoa districts are the neighbourhood of Carácas, parts of the Orinoco Delta, and the Maracaibo Lake region. In the financial year 1909-10 the total exports were valued at about £700,000.

Sugar can be grown anywhere in Northern Venezuela, except on the Llanos and in the higher mountains, or where, as near Barquisimeto or Coro, the atmosphere is too dry. In addition to the native or Creole sugar, there are three varieties from the East known as Otahiti, Batavia, and Selangor cane. From the juice of these sugars crude (papelon) and refined (azucar), with alcohol (aguardiente) and rum are manufactured, the greater part of the crop being utilised in distilleries. Most of the sugar comes from the Maracaibo and Carácas districts, but the product is for the most part consumed in the country, as are the million or so bottles of alcohol. The exports for 1909-10 amounted to £20,000.

Tobacco can be grown all through the foothills of the Cordilleras, but the only important centres are the upland valleys south of Cumaná, in the east, and near Capatárida, in the State of Falcón; the latter is said to be the best, and considerable quantities of the leaf are sent to Havana. Cotton also grows wild along the dry northern coast, and has been cultivated to some extent, particularly after the American Civil War; at the close of the last century the exports amounted to 450 tons, but in 1909-10 only 63 tons were shipped, the greater part of the native product being used in the Valencia mills. Of the remaining agricultural produce most is consumed in the country, the principal plants being maize, manioc (of which some is exported), and (in the Andes) wheat.

Of the wild products rubber has been known to occur in Guayana since 1758, and the latter has been collected since 1860 in a desultory manner by individual prospectors; some is also produced in the forests of Zulia, but the largest quantity passes through Ciudad Bolivar, which exported some 440,000 lbs. of caoutchouc in 1909-10, valued at over £116,000. The tonka-beans, balatá-gum (see p. 215), sernambi, and copaiba-balsam of Guayana are also collected and exported, to say nothing of the many valuable timbers, with which little is done as yet, while coconuts have their place among the minor agricultural products of the country.

The fisheries of Venezuela, if these can be considered as existent, are of very slight importance, and even the pearling-grounds have comparatively little value. These are more or less controlled by the Government, and unlimited concessions have been granted to companies from time to time, a system not calculated to secure the greatest possible length of life for this national asset. The value of the stones exported in 1909-10 was about £21,000.

As we have seen, the industries of Venezuela are in their infancy, and have as yet no international importance, and apparently little for the country itself, in spite of the enormous protective duties on all kinds of manufactures. Chocolate of good quality is made in Carácas, some 45,000 lbs. being turned out by “La India,” but the high-priced imported article is more sought after.

Cotton goods are manufactured in Valencia, drills, flannelette, canvas, &c., being the principal varieties, largely made of the local produce. In spite of the great grazing-grounds of Venezuela very little butter is made in the country, and the inhabitants seem here also to prefer the inferior but much more expensive imported (tinned) variety. An important industry throughout Northern Venezuela is that of tanning, dividive and mangrove bark being the principal materials used; the leather is used chiefly for boots and saddles.

Matches are a Government monopoly, and are manufactured in Carácas. The glass industry, heavily protected though it is, does not seem to have acquired any great importance since its inception in 1906, though paper (chiefly of inferior quality) has been manufactured since 1897.

The two most profitable local industries are the cigarette factories and breweries; the former, a heavily protected monopoly, exists in many parts of the republic, though the largest output is from the Federal District. The Cervecería Nacional was established in Carácas in 1894, with a capital of B 600,000, increased in 1901 to B 2,500,000; it has flourished continuously, and bought up the smaller rival breweries of Valencia and Puerto Cabello. There is also a brewery in Maracaibo, and very little beer is imported into Venezuela.

It is, perhaps, early yet to look for development in the arts or sciences in Venezuela, but there have been one or two painters of note; and of a vast output of flowery writing some is worthy of the name of literature. In this connection the Academy and the Academy of History, with the museum and library in Carácas, deserve honourable mention.

There are two Universities, as we have seen, that of Carácas dating from 1725, that of Mérida from 1810; in both the best faculties are those of medicine and law, few of the many “doctors” in the country having any knowledge of other branches.

Although after the separation from Colombia steps were taken to have a survey made of the republic, the first preliminary studies of Codazzi have remained till very recently all that have been done. Since 1907, however, there has been a Commission, under the control of the War Department, which is slowly collecting material for a map of the whole country, but so far only a small area has been completed.