While much work has been done on the expansion of the British economic empire, its contraction has received less attention. The aim of this paper is to study in detail how British economic interests retreated from Uruguay after the Second World War. It also throws some light on how certain Latin American countries behaved as creditor nations: we know much about their behaviour as debtors but almost nothing about how they used their creditor status. In these negotiations, where financial and economic aspects were closely linked, Uruguay accepted most of Britain’s demands, including the use of its sterling balances for the nationalization of the British owned railways. By doing this, and not buying back its foreign debt, Uruguay was soon in need to ask for a credit to Britain and thus return to an old pattern of indebtedness.
