The Busy Bs

One place where U.S. businessmen abroad can still flourish in a climate of high-riding free enterprise is the oil-booming republic of Venezuela, on the north coast of South America. Since 1948, when the government and the foreign-owned companies--notably Standard Oil Co. (N.J.), Shell, Gulf. Socony--worked out a mutually satisfactory deal that calls, in effect, for a 50-50 split of oil profits, production has shot up to 1,800,000 bbls. a day, flooding the sparsely populated country* with $700 million a year in oil income. The gratified government has thrown the door wide open to foreign enterprise, and the biggest colony of U.S. businessmen overseas is happily at work making money in one of the world's most profitable markets.

The biggest Bs (Venezuelan bolivars, worth 30-c- and as hard as any money in the world) are naturally made in oil and investments, but the fastest Bs come from importing, insurance, advertising, retail trade. Government bonds pay 8%, and even minimum-balance checking accounts pay 3%; many a small company makes its investment back in a year. "Business keeps doubling every year," brags one U.S. operator. "Friend of mine, worth maybe five or six million Bs, showed me his portfolio of stocks. All blue chips--stuff like electricity and beer--and paying 32% on what he put into them."

Love That Oil. What with customs duties, high profits and low farm output, Caracas prices/- average twice as high as Manhattan's, but oil keeps the money moving; the buying power of Customer Juan Bimba (Mr. Average Venezuelan) has risen 63% in eight years. The country is the U.S.'s fourth biggest cash customer (after Canada, Mexico and Cuba), taking everything from steel beams to baked beans.

The outlying communities of U.S. oilmen and construction-camp workers share in the boom through big salaries and subsidized living costs. They work hard, live quietly in their U.S.-provisioned company towns, and save money hand-over-fist between conservative splurges outside. Plenty of hard work gets done in Caracas, too. Explains one American: "This was never a place to play; it's a place to bear down and make dough." But Caracas is blooming fast as a national show window, and the capital crowd, as might be expected, includes far & away the flashiest of Venezuela's 32,000 Yanquis.

For Americans in costly Caracas, $1,000 a month is just about a rock-bottom wage. To switch jobs, one advertising executive was recently offered $1,200 a month, 15% of the firm's profits, two months' pay a year as bonus, and a membership share in the Valle Arriba golf club, now quoted at $7,000. Caracas' mountain-fringed East End, filled with ever more of the sleek, pastel-walled villas favored by the moneyed musius (as Venezuelans call foreigners, from monsieur), is one of the sights of South America. To staff such places and sustain the pace of entertainment, some of the hard-trading, hard-drinking men who keep the dance of the Bs going hire two or three housemaids, a cook, a chauffeur, a butler and a gardener. (Average cook's wage: about $10.50 a day.)

Love That Tax. Most of the musius are not in the least concerned with local politics. Discussing the army dictatorship that has bossed Venezuela for the past five years, a banker explained recently: "You have freedom here to do what you want to do with your money, and to me that is worth all the political freedom in the world." Venezuelan law lets the foreigner operate freely, and U.S. firms, which own two-thirds of Venezuela's $2.3 billion foreign investment, take their profits out in dollars, with no red tape. Yanquis residing in Venezuela pay no U.S. income taxes, and the Venezuelan tax is downright benign. Not until a salary reaches a theoretical $8,400,000 a year would the government take the maximum bite of 28%; a man earning $60,000 a year pays only $1,800. There is no tax on stock dividends.

It is all so wonderful that it may be creating a strange new breed of U.S. expatriates. "I'd like to go back and live in the States," a musiu may sigh, thinking wistfully of the soft green hills of home. Then, more likely than not, his eyes harden a little and he adds: "But of course I couldn't face those taxes."

* Population: 5,091,000, less than half that of Pennsylvania; area: 352,141 square miles, about the size of Texas and Oklahoma combined. /- Samples: a 15-c- can of U.S. pipe tobacco, $2.10; a medium-size refrigerator, $540; a Ford sedan, $3,600.

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