"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]