INVESTMENT OPPORTUNITIES IN VENEZUELA
Before entering upon a discussion of the future opportunities for
investment in Venezuela, two outstanding features need to be emphasized
as factors influencing the investing of money in Venezuela. They are:
1st, A realization of the fact that Venezuela needs immigration and
needs it badly to develop her rich natural resources, as her population
has been almost at a standstill for the last ten years. The other
crying need is _foreign, not native, capital_.
Venezuela, a country larger than Germany, at present maintains a
population estimated at 2,800,000. The greater proportion of the
population is found in six or eight large cities in the north. Around
the Orinoco and south of it lie thousands of acres of rich virgin soil
and, strange to say, mines of coal, iron, copper, and gold which are
not worked due to lack of transportation facilities.
Here, then, lies the prime investment of the country, a proper system
of railroads to make these rich natural resources available. These
projects have already been discussed widely, and Doctor Vicente Lecuna,
President of the Bank of Venezuela, considered the most prominent man
in the country, named railroads as the greatest need of the country and
the best investment for foreign capital.
Here we may be permitted to digress for a moment to point out an unique
advantage which Venezuela holds in regard to commerce with the United
States. Due to the opening of the Panama Canal, Venezuela can ship as
easily and quickly to the western part of the United States as to the
eastern and thus effect a considerable saving on trans-shipment of
goods by rail across the United States. Further, the proposal holds
much favor here to-day for the introduction of a steamship line to
Saint Louis which would be quicker and cheaper than the present line to
New York. Thus we see that three direct lines might be maintained from
the States to Venezuela, one from some western port via the Canal, a
second from Saint Louis which would transport the goods to the Middle
West; and, lastly, an expansion of the present service from New York.
[Illustration: VENEZUELAN STUDENTS DEPOSITING WREATH BEFORE STATUE OF
GEORGE WASHINGTON, CARACAS, JULY 4, 1920]
[Illustration: GEORGETOWN STUDENTS DEPOSITING WREATH AT THE TOMB OF
SIMÓN BOLÍVAR IN THE PANTHEON, CARACAS, JULY 4, 1920]
Here too a word would not be amiss relative to the present service from
New York. The Red D Line maintains a fleet of four passenger ships, the
largest being of three thousand tons and the time consumed from New
York to La Guaira usually nine days. The need for more and better ships
is obvious. With improved service, there is no reason why Americans in
search of a cool spot to visit in the summer time should not come to
Caracas situated, as it is, three thousand feet above sea level in a
mountainous country and with a wealth of that beautiful scenery found
only in the tropics.
PROPOSED RAILROADS
1. _San Felipe to Puerto Cabello._
The first line to be considered would run from San Felipe to Puerto
Cabello. Puerto Cabello already occupies a prominent place in the
economic life of Venezuela, being one of the principal ports and a
port of call for all American and European steamers. The proposed
railroad would be approximately eighty kilometers in length and would
pass through one of the best cacao regions of Venezuela. This section
is especially favored due to the trade winds which blow across it,
giving this locality a special aptitude for the raising of a superior
brand of cacao; it is from this section along the coast that the best
cacao in the world comes. At present, due to the lack of transportation
facilities, it is useless to develop the region, for the product
can not find its way to market. A railroad here would serve to make
available a huge, rich territory for cacao which could then find its
way into the markets of the world.
2. _San Cristobal to Valencia._
The second proposed railroad is one from San Cristobal to Valencia
passing by way of Barinas. Considerable construction work would be
necessary as this line would be about 615 kilometers in length, through
rich, fertile lands which at present lie untouched due to lack of
communications with the outside world. The railroad would lie over flat
level land except for a stretch of approximately fifty kilometers over
the mountains.
All along the southeast of this road lies fertile table land suitable
for the raising of cattle. In fact, the llanos extend all along the
route while to the north stretches the coffee producing section of
Venezuela. Near Barinas there are large cacao and tobacco plantations
but they are not developed to any appreciable degree nor to their real
capacity, due to the lack of proper forwarding agencies. Furthermore,
the opening up of this region by railroad would give great impetus
to further settlement and investment in the interior, for it is an
observed fact that after the railroad come cities and civilization.
The situation is similar to that existing in our own history when,
simultaneously with the building of the trans-continental railroads,
caravans pushed their way westward and have left as their heritage the
great cities of the West. This lesson from our own history should not
go unnoticed, for the same opportunity exists in Venezuela and to the
pioneers will come rewards similar to those reaped by our own dauntless
settlers.
Even now before the building of this railway, English companies have
acquired large concessions of territory near the proposed line. This
is only a start and soon they will be extending their concessions
and if Americans do not act before it is too late they will find the
choicest land already taken. Most of the English concessions lie in
the Apure district, the best cattle land in Venezuela, whose only
disadvantage lies in the fact that the land is frequently inundated
by the overflowing of the waters of the Apure River. The value of the
land, of course, depends on its fertility and the availability of
water, but it may be stated that a square league, that is, twenty-five
square kilometers (9 square miles), varies in price from two thousand
to five thousand bolivars, or from $400.00 to $1000.00. And this for
land in the best cattle section of Venezuela! Among other sections of
the country well suited for cattle raising are the llanos of Marturin,
extremely fertile lands, swept by the trade winds. As they are situated
in the northwestern part, shipment could be made through the port
of Guanta which, it is predicted, will be the future main port of
Venezuela. In this same vicinity lie the llanos of Barcelona, even
closer to the port high tablelands, but somewhat dryer than the llanos
of Maturin. To develop this land, a railroad from Ciudad Bolívar, a
port used now on the Orinoco and Barcelona, is necessary. This would
connect with the present line from Barcelona to Guanta, thus connecting
two important ports and serving a rich cattle section, necessitating
the building of only three hundred kilometers of road.
Further west, running parallel to the last mentioned line, lies a
region between San Fernando and Cagua, and as Cagua is already on a
railroad line, shipments can be made either to Puerto Cabello or La
Guaira. The llanos of Guárico which lie in this region are high table
lands but with numerous oases which provide sufficient water for the
cattle. At times, parts of this region are subjected to inundation
which makes the land very rich and fertile. This is another section
merely waiting the day when capital will develop railroads. It may not
be amiss to remind American investors that the English have already
secured three large concessions along this route.
Another important consideration deserving of mention is that along
this route lie coal mines which have not been developed due to lack of
transportation facilities. These mines would serve as an easy means of
procuring fuel for the road.
3. _Limon-Castilletas._
Another railroad projected is that from Limon to Castilletas. About
Limon are rich oil fields now being developed but which are handicapped
by the fact that Maracaibo, the present shipping port for oil, lies
inside the Gulf of Maracaibo and only small ships can enter due to
deposits which are continually filling up the strait. Maracaibo is not
always available for small ships and a line from Limon to Castilletas,
which is a port lying outside the bar and on the shores of the Gulf of
Venezuela, would solve the present difficulty and, besides, effect a
saving of over two hundred kilometers in sailing distance.
4. _Yuruari-Orinoco._
The last important railroad which the country needs is one from the
Yuruari River to the Orinoco. About the region of Yuruari are rich gold
mines which are only worked to a small extent and in a very primitive
way due to the impossibility of bringing the necessary machinery to
the mines. Not only would a line connecting the two rivers do this but
it would also pass through rich grazing lands. Then, too, only a short
distance to the east are the iron mines of Imataca, still unworked due
to the lack of transportation facilities.
Railroads are, then, the key to a double prosperity--prosperity for
the foreign investor and an opportunity for Venezuela to take her
proper place in the markets of the world. It seems inconceivable that
here, close at hand, potential factors of great wealth are lying
dormant awaiting the magic touch which in this case must come from the
railroad, the forerunner of civilization. Dipping further into the
future, we can see other results which would quickly follow the opening
up of this great country,--an increase in immigration, consequently
a larger market in which to buy and sell. And whom should it benefit
more, the United State close at hand, or Europe a week further away!
Time alone will decide, but this point can bear emphasis again and
again that now is the propitious hour when, due to the recent war,
American goods are being sought for in increasing volume by Venezuela.
But England is already in the field and Germany is striving hard to
regain her lost place in the sun. It behooves all of us, therefore,
to strive with might and main to consolidate the position in world
commerce which was thrust upon us and there lies no better path to that
end in South America than along iron rails constructed by American
capital in the sister Republic of Venezuela.
_Joseph P. Quinlan._
FOREIGN TRADE OF VENEZUELA
AND
AMERICAN GOODS IN VENEZUELA