Venezuela, an economic report / Presented by students of the School of Foreign Service, as an aid to the foreign trade of the United States

by Georgetown University. School of Foreign Service

In the near future, Germany will again be a dangerous competitor in Venezuela. At the present time there is a German trade commission touring the country and plans are also in process of formation for German immigration on a huge scale. Though the present government of Venezuela is more than well disposed towards the United States, it is clearly evident that the mass of Venezuelans while not hostile, are rather more suspicious than friendly, while the feeling of sympathy for Germany is and always has been manifestly very strong. There is strong German propaganda now at work in Venezuela for the future sale of German goods. The idea is deeply set in the Venezuelan mind, as deeply rooted as his feeling of distrust of the "Norte Americano," that what is made in Germany is the best. There have even been instances where American goods have been sold as "Made in Germany," because of this skillful insinuation of the superiority of German goods. For a long time "Reuter's soap," manufactured by a New York concern, sold widely in the Republic, and every Venezuelan merchant would have sworn that the Reuter Company was a German concern, in spite of the fact that "Reuter Company—New York," was plainly marked on every package. The United States should institute a counter trade-propaganda in favor of goods "Made in America," if she would retain and increase the volume of her trade with Venezuela.

Experience has shown that the best means of furthering the sale of American goods is through the establishment of agencies in the principal cities of the country. Formerly much good American energy was wasted through the practice of sending out commercial travellers who toured the country without first studying the field and reporting regularly to the head office in the States. A resident American agent, with several assistants to alternate on selling trips into the interior, forms friendships, observes, and establishes liaison with the government, which is of prime importance in commercial dealings with certain Latin-American republics. Especially in meeting the peculiar customs regulations by which so many incoming shipments are questioned, held up, fined or confiscated, is the resident foreigner more apt to secure expeditious treatment while the native handling an agency would be without the recourse always at hand for the American representative.

A serious obstacle to Venezuela's trade and to the future extension of the sale of American goods in the Republic is the complicated system of customs collection. The complaints heard are those of friends anxious to facilitate trade and eliminate sources of friction. "There are nine classes in the customs tariff, ranging from 0.05 Bs. per kilo gross for the first class to Bs. 20 per kilo gross for the ninth class. In addition to the regular schedule, some articles are subject to specific or ad valorem surtaxes, two surtaxes of 12½% each, the National Tax and the Territorial Tax were authorized in April, 1901, and a 30% duty established by a decree of February, 1903, for the purpose of paying off the foreign indebtedness and continued by decree of June, 1912, to be used for internal improvements. There is also the sanitary tax of 1% and a surtax of 30% on imports from the West Indies (since June, 1881) designed to promote the establishment of wholesale houses and warehouses."[27]

[27] Compilations from "Ley de Aduanas," and "Ley de arancel de Derechos de importacion de 16 de junio de 1915."

"American exporters have been discouraged by the intricate system of fines and penalties imposed by the customs regulations for slight errors in invoices."[28] The customs collectors and officials receive meager salaries, but the discoverer of an error in an invoice, or other violation of customs regulations, receives one half of the resultant fine. Consequently, there is a natural zeal in discovering errors, frequently resulting in fines for the omission of commas, faulty use of semi-colons and for abbreviating. "As compared with other South American countries, Venezuela is placed at a distinct disadvantage and many American merchants have refused to continue doing business in the Republic."[29]

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

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

Other obstacles to the furtherance of the sale of American goods in Venezuela are poor steamship connections with the States and the resultant slowness of mails and the unwillingness of the larger American export houses to ship small trial orders which the merchants in Venezuela frequently insist upon.

In closing, the writer may use the privilege of a patriotic American to say a word concerning the impressions he received as to the character and ability of the salesmen of American goods encountered in Venezuela. While there are many young men in the field who are models of strong character and efficiency (for the most part Porto Ricans), it must be confessed that the larger cities and the capital, Caracas, are not over-supplied with energetic young American salesmen of steady habits able to command the respect of the Venezuelan buyers.[30]

George A. Townsend.