New-York daily tribune. [volume] (New-York [N.Y.]) 1842-1866, 1850-11-28
VENEZUELA.
~ AZ Eauern. err tho Law Of Delay

,avy on the 10th of April 1894, entitled Upon tie
T.btrty Of Contracts" BY this law there was no
legal rate of interest, it being left to agreement
between the parties. Any creditor was author
ICED to sell by public auction to the highest oid-
der the property or securities hypothecsted to
him to the amount of the principal advanced ana
she interest upon it. 8The immediate efectoi this
law was that though the advances made on mort
gage were of triRing amount in comparison with
the value of the property, the interest charged
apon them became extravagantly onerous, that is
10 say, from one to five per cent. per month. The
most frequent rate of interest was two per cent.
per month.
II was bat seldom that men engaged IN COM
merce had recourse to loans of this nature, for |
knowing the ruinous consequences of such meas-
ares, they foresaw they would soon have to aban-
don their business altogether for business
could afford such extravagant interest. But it
sometimes happened that had payment
falling due, and not having immediate funds to
meet it, be was compelled to apply to the money
lenders to discount his notes. secured by other
responsible persons, or by collateral securities
From this period commenced the formation of an
oligarchy composed of small circle of persons
who began to exercise q predOminating influence
over the country by means of the wealth they
possessed. year after, what was called the
Revelation of Reforms occurred, and the Gov
eminent being in urgent need of funds, had to pay
the house Of Perez & Chaves monthly interest
OF five per cent on the amount advanced by them
The principal wealth of Venezuela is in its Agri-
culture. The pfoprietors OF estates, with the
view of improving them and obtaining larger
produce borrowed money at the rate OF ? and
per cent. per month. They began by clearing
their ground of timber and forming plantations on
much larger scale, hoping by applying them
solves assduously TO these labors to obtain com
Portable support for their families but tfrequenC-
~ happened that the net produce OF their lands
was scarcely sufficient to pay the interest of the
money they had borrowed. There is country
il the world where Agriculture can afford to pay
an interest of thirty percent per annum. For
short period the money lenders received the in-
,erest their advances very regularly, but after
that it was stipulated that the agricultursts
should consign their produce to them, to be dis
posed of, thus burdenng it with the additional
charges of commission and storage, not to mention
the gains made by difference in weight, &c When
the sale Of the produce was not sufficient to cover
the amount Of interest due, the deficiency
added 10 the Capltd sum ana 1t ne" CoHIta
signed upon the same conditions as the former
one The result of this was that at the end OF
some six or eight years the Agricuturists had
nortgaged their farms, their houses, all their val
tables for sums originally small, but now very
large and had no other means OF subsistence than
trihing advance made on the next years crop,
and so on successfully. They could never llqul-
date their debts for their produce would not fetch
sufficient price in the market to enable them to
do Sc, and beside, it impossible Tor them to
sell their estates at anything like an equivalent
price for as there were few men of large capital
IN the country, no one could purchase them, ex
cept their creditors and they could do better with
their money.
Large fortunes were acquired by several indi
u viduals during this time, while the great o
the country was ruined and became altogether
dependent few capitalists But every thing
must have an end Some individuals who held
notes Of the landed proprietors, and who in fact
were the masters Of their Estates not being able
TO obtain payment Of either the interest or the
capital they had advanced, to find purchasers,
for the estates themselves conceived the idea O
establishing National Bank. The Government
took fourth part of the shares, engaging at the
time to deposit in the B nnk all the customs
rector. There were to be five directors in all; the
other four were the founders and principal share
holders of the bank The Government paid $780,.
600 for its shares being half Of their nominal
value, and the Directors the remainder, that is to
say about 100000 1t is easy to perceive what
was the object of this institution, which has proved
the cause of many of the evils which have occur,
red in Venezuela. These very Directors of the
Bank were the holders Of the notes of the landed
proprietors, and with the view of recovering their
claims, lent money to them at an annual interest
of per cent. with the condition that with the
moneyth thus advanced by the Bank they should pay
the obligations which the Directors of the Bank
held before they were Directors. For this all
that was required was the formality of giving their
signatures, together with that of person consi.
dered responsible by the Directors of the Bank
When the note became due and the signer of it
could not pay it, the Bank obligugly renewed it
and renewed the interest.
For some time the Bank had sufficient funds
ior the requirements of the Treasury, whose de-
posts regularly amounted to somewhere about
100000 But it must not be supposed that it
was really National Bank, and that all persons
requiring money could obtain it on lodging unde.
niabe security, at the interest OF per cent. per
annum Those who were not of the CLIQUE, or
who had no friend at court were sure to be re.
fused. Nevertheless the same individuals could
manage oQt Of doors to obtain the sum they had
vainy solicited from the Bank at the rate of
per cent. per month, and it was known that the
persons making these advances were agents of the
Bank, or at all events obtained the funds from it.
While the Bank would refuse $500 to person
who would give security to the amount of 900,
itwoald lend to such person as Gen, Paez near