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."