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British Investment in Latin America, 1850–1950 A Reappraisal

Published online by Cambridge University Press:  22 June 2011

Rory Miller
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Extract

For forty years much of the research on Britain's relationship with Latin America has been dominated by a rather narrow agenda, the boundaries of which were established by radical and conservative writers in the middle third of the twentieth century, just when Britain's role in Latin America was rapidly declining. Essentially this was a debate about power, that of British governments and businessmen on the one hand and Latin American governments and elites on the other. More recently, however, younger historians have begun to break free of the confines established by those writing in the 1950s and 1960s. As a result there is some hope that new research on this topic may offer more of interest to non-specialists and contribute to other historical debates, both in British and Latin American history. The purpose of this historiographical essay, which is based primarily, but not entirely, on the research undertaken in Britain during the last twenty years, is to review the recent literature on British investment in Latin America, and to investigate some of the implications of what we now know about the subject for our understanding of the evolution of Latin American societies.

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Articles
Information
Itinerario , Volume 19 , Issue 3 , November 1995 , pp. 21 - 52
Copyright
Copyright © Research Institute for History, Leiden University 1995

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References

Notes

1 This paper was originally produced for a conference at the University of Hamburg in March 1994 on the history of German interests in Latin America. I am grateful to Jochen Meissner and Boris Barth for the invitation to attend that conference and to the British Council for the necessary funding. A slightly different version of this paper will appear in German in Meissner, Jochen and Barth, Boris eds, Grenzenlose Märkte: Die deutsch-lateiname-rikanischen Wirtschaftsbeziehungen vom Zeitalter des Imperialismus bis zur Weltwirtschaftkrise (Hamburg forthcoming)Google Scholar. I am grateful also to Raúl García Heras for comments on an earlier draft.

2 To cite every piece of literature that falls into this category would produce an extremely long footnote. Probably the most popular work interpreting Britain's role in this light was Frank, Andre Gunder, Capitalism and Underdevelopment in Latin America: Historical Studies of Chile and Brazil (London 1971)Google Scholar. Frank drew heavily on earlier Latin American Marxist historians such as the Chilean Hernán Ramírez Necochea and the Brazilian Caio Prado Jr. The major conflicts about which the suspicion of direct British involvement persists in popular thinking are the War of the Triple Alliance against Paraguay (1865–1870); the Pacific War of 1879–1883 (note that the German Same for this war, Salpeterkrieg, encapsulates the war's economic significance); the Chilean Civil War of 1891; the Mexican Revolution of 1910–1920; the Argentine coup of 1930; and perhaps the Chaco War of 1932–1935.

3 Ferns, H.S., ‘Britain's Informal Empire in Argentina, 1806–1914’, Past & Present 4 (1953) 60–75CrossRefGoogle Scholar; Gallagher, J. and Robinson, R., ‘The Imperialism of Free Trade’, Economic History Review 6 (1953) 1–15CrossRefGoogle Scholar. Note that Ferns, H.S.’ later book, Britain and Argentina in the Nineteenth Century (Oxford 1960)Google Scholar, takes a much more conservative stance than his earlier papers.

4 Platt, D.C.M., Finance, Trade and Politics in British Foreign Policy, 1815–1914 (Oxford 1968)Google Scholar.

5 Platt, D.C.M. ed., Business Imperialism, 1840–1930: An Inquiry Based on British Experience in Latin America (Oxford 1977)Google Scholar. Many of the contributors to this book, including the author of this paper, were much more cautious about the absolute rejection of nationalist and dependentista interpretations than Platt himself.

6 Platt, D.C.M., ‘Dependency in Nineteenth-Century Latin America: An Historian Objects’, Latin American Research Review 15/1 (1980) 113–130Google Scholar; and Platt, D.C.M., ‘Dependency and the Historian: Further Objections’ in: Abel, Christopher and Lewis, Colin M. eds, Latin America, Economic Imperialism and the State: The Political Economy of the External Connexion from Independence to the Present (London 1985) 29–39Google Scholar.

7 See especially Platt, D.C.M., Latin America and British Trade, 1806–1914 (London 1972)Google Scholar; Platt, D.C.M., ‘Foreign Finance in Argentina for the First Half-Century of Independence’, Journal of Latin American Studies 15 (1983) 23–47CrossRefGoogle Scholar; Platt, D.C.M., ‘British Finance in Mexico, 1821–1867’, Bulletin of Latin American Research 3 (1984) 45–62CrossRefGoogle Scholar.

8 Graham, Richard, Britain and the Onset of Modernisation in Brazil, 1850–1914 (Cambridge 1968)CrossRefGoogle Scholar; Winn, Peter, ‘Britain's Informal Empire in Uruguay during the Nineteenth Century’, Past & Present 73 (1976) 100–126CrossRefGoogle Scholar, and El imperio informal britanico en el Uruguay en el siglo XIX (Montevideo 1975)Google Scholar; and Gravil, Roger, The Anglo-Argentine Connection, 1900–1939 (Boulder and London 1985)Google Scholar.

9 The final act was probably the exchange between Platt and Philip O'Brien in Abel and Lewis eds, Latin America, Economic Imperialism and the State, 29–69. Although not published until 1985, these papers had first been drafted at the end of the 1970s, when the controversy over dependency and history was in full swing.

10 Ferns, Britain and Argentina.

11 The phrase is Gallagher and Robinson's. See Robinson, Ronald and Gallagher, John, with Denny, Alice, Africa and the Victorians: The Official Mind of Imperialism (London 1961)Google Scholar.

12 Rodríguez, Mario, A Palmerstonian Diplomat in Central America: Frederick Chatfield Esq. (Tucson 1964)Google Scholar. Gough, Barry M., ‘Specie Conveyance from the West Coast of South America in British Warships, c. 1820–1870: An Aspect of the Pax Britannica’, Mariner's Mirror 69 (1983) 419–433CrossRefGoogle Scholar.

13 The Bank of England was a private institution until it was nationalised in 1946, but it worked closely with the Treasury. Its extensive archive remains in the Bank rather than the Public Record Office, but is open for research.

14 Platt, ed., Business Imperialism.Google Scholar Platt's list of British business archives concerning Latin America appears in Walne, Peter ed., A Guide to Manuscript Sources for the History of Latin America and the Caribbean in the British Isles (London 1973) 442–513Google Scholar.

15 Burk, Kathleen, Morgan GrenfeU, 1838–1988: The Biography of a Merchant Bank (Oxford 1989)Google Scholar; Ziegler, Philip, The Sixth Great Power Barings, 1767–1929 (London 1988)Google Scholar; Roberts, Richard, Schroden, Merchants and Bankers (London 1992)Google Scholar; Chapman, Stanley D., The Rise of Merchant Banking (London 1984)Google Scholar.

16 Royal Dutch Shell archives remained closed for a long time, but pre–1930 material is now available. Some data on the early history of the oil industry has also been found in the Pearson and Burmah Oil archives.

17 An exception is the research of Paul Goodwin, a North American scholar, who used the archives of the British Chamber of Commerce in Buenos Aires: Goodwin, Paul B., ‘Anglo-Argentine Commercial Relations: A Private Sector View, 1922–1943’, Hispanic American Historical Review 61 (1981) 29–51CrossRefGoogle Scholar. Two of the most notable recent contributions to the history of European business in Peru both depend on business archives discovered in Arequipa and Lima. See Burga, Manuel and Reátegui, Wilson, Lanas y capital mercantil en el sur: la Casa Ricketts, 1895–1935 (Lima 1981)Google Scholar; Quiroz, Alfonso W., Banqueros en conflicto: estructura finandera y economia peruana, 1884–1930 (Lima 1989)Google Scholar.

18 The major works of importance in the debate over Britain's decline are the following: Wiener, Martin, English Culture and the Decline of the Industrial Spirit, 1850–1980 (Cambridge 1981)Google Scholar; Barnett, Correlli, The Audit ofWar. The Illusion and Reality of Britain as a Gnat Nation (London 1986)Google Scholar; Pollard, Sidney, Britain's Prime and Britain's Decline: The British Economy, 1870–1914 (London 1989)Google Scholar; Cain, J. and Hopkins, A.G., British Imperialism (2 vols.; London 1993)Google Scholar; Rubinstein, W.D., Capitalism, Culture and Decline in Britain, 1750–1990 (London 1993)Google Scholar. For a comparative perspective one of the most influential works is Porter, Michael, The Competitive Advantage of Nations (New York 1990)CrossRefGoogle Scholar.

19 There was a fifty-year bar until 1967, when it was reduced to thirty years. This suddenly opened the prospect of research on the critical inter-war period, though the official papers for the period of rapid disinvestment after the Second World War remained closed until the end of the 1970s.

20 It is noticeable also that some important new methodological techniques have not been applied to this field. The use of linguistic analysis and of computers (whether for quantitative investigation or for prosopography), both of which have revolutionised other areas of economic and social history, are markedly absent from studies of the British role in Latin America.

21 Imlnh, Albert, Economic Elements in the Pax Britannica (Cambridge 1958) 28CrossRefGoogle Scholar; Feinstein, C.H. and Pollard, S. eds, Studies in Capital Formation in the United Kingdom, 1750–1920 (London 1988) 462–463Google Scholar.

22 Paish, George, ‘The Export of Capital and the Cost of Living’, The Statist (supplement; 14 February 1914) i–viiiGoogle Scholar.

23 Feis, Herbert, Europe, the World's Banker, 1870–1914: An Account ofEuropeanForeign Investment and the Connection of World Finance with Diplomacy before the War (Clifton 1930) 23–24Google Scholar.

24 Rippy, J. Fred, British Investments in Latin America, 1822–1949: A Case Study in the Operations of Private Enterprise in Retarded Regions (New York 1959) 67Google Scholar. Stone, Irving, ‘British Direct and Portfolio Investment in Latin America before 1914’, Journal of Economic History 37 (1977) 698CrossRefGoogle Scholar. For a brief discussion of all these estimates see Miller, Rory, Britain and Latin America in the Nineteenth and Twentieth Centuries (London 1993) 120–123Google Scholar.

25 Platt, D.C.M., ‘British Portfolio Investment before 1870: Some Doubts’, Economic History Review 33 (1980), 1–16CrossRefGoogle Scholar; Platt, D.C.M., Britain's Investments Overseas on the Eve of the First World War (London 1986)CrossRefGoogle Scholar. For a critique of Platt see Feinstein, C.H., ‘Britain's Overseas Investments in 1913’, Economic History Review 43 (1990) 288–295CrossRefGoogle Scholar. For a level-headed discussion of this and other issues concerning investment Pollard, Sidney, ‘Capital Exports, 1870–1914: Beneficial or Harmful?’, Economic History Review 38 (1985) 489–514Google Scholar.

26 Davis, Lance E. and Huttenback, Robert A., Mammon and the Pursuit of Empire: The Political Economy of British Imperialism, 1860–1912 (Cambridge 1986) 49Google Scholar. See also Davis, Lance E. and Huttenback, Robert A., ‘The Export of British Finance, 1865–1914’, Journal of Imperial and Commonwealth History 13 (1985) 28–76CrossRefGoogle Scholar. It is not clear why Davis and Huttenback lumped Mexico and Central America with North America in calculating their statistics.

27 Stone, , ‘British Direct and Portfolio Investment’, 695Google Scholar.

28 Meyer, Lorenzo, Su Majestad Británica contra la Revolución Mexicana, 1900–1950: el fin de un imperio informal (Mexico 1991) 57Google Scholar.

29 Stone, , ‘British Direct and Portfolio Investment’, 698–701Google Scholar. Michael Edelstein later criticised Stone on two grounds: that ‘portfolio’ investment in government securities did not necessarily imply a complete loss of'control’, and that Stone defined all railway company debentures as ‘direct’ investment, even though for many individual owners they were clearly a ‘portfolio’ investment, held for income, not for capital growth or control. See Edelstein, Michael, Overseas Investment in the Age of High Imperialism: The United Kingdom, 1850–1914 (London 1982) 34–35Google Scholar.

30 Svedberg, Peter, ‘The Portfolio-Direct Composition of Private Foreign Investment in 1914 Revisited’, Economic Journal 88 (1978) 771CrossRefGoogle Scholar.

31 The obvious examples are the Canadian public utilities firms which operated in Mexico and Brazil, and which are discussed later in this paper. See Armstrong, C. and Nelles, H.V., ‘A Curious Capital Flow: Canadian Investment in Mexico, 1902–1910’, Business History Review 58 (1984) 178–203CrossRefGoogle Scholar. Also McDowell, Duncan, The Light: Brazilian Traction, light and Power Company Limited, 1899–1945 (Toronto 1988)Google Scholar.

32 This issue is discussed at some length, using the example of the Central Argentine Railway, by Jones, Charles, ‘Antecedents of the Modern Transnational Corporation: British Investment Groups in Latin America’ (unpublished paper; 1994)Google Scholar. This paper will appear in a volume edited by Carlos Marichal and is to be published by the Fondo de Cultura Economica. For a shortened version see Jones, Charles, ‘The Origins of Modern Multi-national Corporations: British Firms in Latin America, 1850–1930’, in Marichal, Carlos ed., Foreign Investment in Latin America: Impact on Economic Development, 1850–1930 (Milan 1994) 27–39Google Scholar.

33 Miller, , Briton and Latin America, 124–130Google Scholar.

34 Marichal, Carlos, A Century of Debt Crises in Latin America: From Independence to the Great Depression, 1820–1930 (Princeton 1989)Google Scholar.

35 One exception making use of the Baring and Rothschild archives is Young, George F.W., ‘Anglo-German Banking Syndicates and the Issue of South American Government Loans in the Era of High Imperialism, 1885–1914’, Bankhistorisches Archiv 16 (1990) 3–37Google Scholar.

36 Fishlow, Albert, ‘Lessons from the Past: Capital Markets during the 19th Century and the Interwar Period’, International Organization 39 (1985) 385–439CrossRefGoogle Scholar.

37 Albert, Bill with Henderson, Paul, South America and the First World War: The Impact of War on Brazil, Argentina, Peru and Chile (Cambridge 1988)CrossRefGoogle Scholar.

38 Chandler, A.D., ‘The Growth of the Transnational Industrial Firm in the United States and the United Kingdom: A Comparative Analysis’, Economic History Review 33 (1980) 396–410CrossRefGoogle Scholar.

39 The literature on the growth of British multinational industrial firms is now quite rich. See especially Jones, Geoffrey, ‘The Expansion of British Multinational Manufacturing, 1890–1939’ in: Okochi, A. and Inoue, T. eds. Overseas Business Activities: Proceedings of the Fuji Conference (Tokyo 1984) 125–153Google Scholar; Jones, Geoffrey, ‘Origins, Management and Performance’, in Jones, Geoffrey ed., British Multinationals: Origins, Management and Performance (Aldershot 1986) 1–23Google Scholar; Hertner, Peter and Jones, Geoffrey eds, Multinationals: Theory and History (Aldershot 1986)Google Scholar; Nicholas, Stephen J., ‘British Multinational Investment before 1939’, Journal of European Economic History 11 (1982) 605–630Google Scholar. Important contributions to the comparative discussion have also come from Wilkins, Mira, ‘The History of European Multinationals: A New Look’, Journal of European Economic.History 15 (1986) 483–510Google Scholar, and ‘European and North American Multinationals, 1870–1914: Comparisons and Contrasts’, Business History 30 (1988) 8–45CrossRefGoogle Scholar.

40 Chapman, Stanley D., ‘British-Based Investment Groups before 1914’, Economic History Review 38 (1985) 231–233 and 235–236CrossRefGoogle Scholar.

41 Wilkins, Mira, ‘The Free-Standing Company, 1870–1914: An Important Type of British Foreign Direct Investment’, Economic History Review 41 (1988) 259–282CrossRefGoogle Scholar. For critiques of the concept see Corley, T.A.B., ‘Free-Standing Companies, their Financing, and Internalisation Theory’, Business History 36/4 (1994) 109–117CrossRefGoogle Scholar; Casson, Mark, ‘Institutional Diversity in Overseas Enterprise: Explaining the Free-Standing Company’, Business History 36/4 (1994) 95–108CrossRefGoogle Scholar. A set of theoretical and empirical studies exploring the concept further is to be published: Wilkins, Mira and Schroter, Harm G. eds, The Freestanding Company (Oxford forthcoming)Google Scholar.

42 There are exceptions, of course. Both the Peruvian Corporation (principally a railway company) and the Antofagasta (Chili) and Bolivia Railway Company built lines to the Bolivian altiplano from the Pacific coast, but to call them multinational as opposed to free-standing companies seems a matter of semantics rather than substance, since there was little to differentiate them from railway firms in other countries. Borax Consolidated owned deposits in both Chile and Peru. The most striking point is that unlike North American Firms in Mexico, Chile and Peru, British mining companies in Latin America remained FSCs rather than multinationals. This may simply have been an accident Nitrate groups may well have become multinationals had not Chile monopolised the deposits in the Atacama Desert as a result of the Pacific War.

43 Charles Jones identifies fourteen such groups in 1914: "Antecedents of the Modern Transnational Corporation’. By then the North cluster seems largely to have disintegrated into free-standing and multinational companies. The Pearson group's expansion into South America, which might have been greatly stimulated by the profits flowing from Mexican Eagle after 1910, was curtailed by the First World War.

44 The growth of British multinational manufacturing companies is the focus of my own current research, financed by Nuffield Foundation.

45 The cause of the ASAB's difficulties was its financing of the Guggenheims’ schemes to consolidate the declining nitrate industry. A number of works are relevant: Joslin, David, A Century of Banking in Latin America: To Commemorate the Centenary in 1962 of the Bank of London and South America Ltd. (London 1963) 263–273Google Scholar; Jones, Geoffrey, British Multinational Banking, 1830–1990 (London 1993) 159–162 and 240–242Google Scholar; Sayers, R.S., The Bank of England, 1891–1944 (Cambridge 1976) 263–267Google Scholar; O'Brien, Thomas F., ‘“Rich Beyond the Dreams of Avarice”: The Guggenhei.ns in Chile’, Business History Review 63 (1989) 122–159CrossRefGoogle Scholar.

46 This is not to deny that the United States was the home of most multinational firms in Latin America, or that the British position was not severely affected by the First World War..The war dealt an enormous blow to the capacity of the City of London to finance new projects, with the result that the most significant growth after 1914 came from firms which could generate their own finance rather than relying on new capital. FSCs in Latin America were hindered particularly by the restrictions which the Bank of England imposed in order to support the value of sterling. On this see Atkin, J.M., ‘Official Regulation of British Overseas Investment, 1914–1931’, Economic History Review 23 (1970) 324–335Google Scholar.

47 Aramayo is mentioned in Hennart, Jean-Francois, ‘International Financial Capital Transfers: a transaction cost framework’. Business History 36 (1994) 70CrossRefGoogle Scholar. Arana's activities involved the British government in investigating the infamous Putumayo scandal. For Vasena and some other examples see Guy, Donna J., ‘Dependency, the Credit Market, and Argentine Industrialization, 1873–1906’, Business History Review 58 (1984) 554Google Scholar.

48 Rippy, , British Investments, 127Google Scholar.

49 Guy, , ‘Dependency’, 555Google Scholar. British taxation, plus the need to appease local politicians and businessmen, also encouraged some British companies to operate through subsidiaries registered locally: Cowen, Michael, ‘Capital, Nation, and Commodities: The Case of Forestal Land, Timber and Railway Company in Argentina and Asia, 1900–1945’ in: Helten, J.J. Van and Cassis, Y. eds, Capitalism in a Mature Economy: Financial Institutions, Capital Exports, and British Industry, 1870–1939 (Aldershot 1990) 198Google Scholar.

50 On changing patterns in issuing Latin American public debt see the following: Marichal, . Century of Debt Crises;Google ScholarYoung, , ‘Anglo-German Banking Syndicates’Google Scholar; Miller, Rory, ‘The London Capital Market and Latin American Public Debt, 1860–1930’ in: Liehr, Reinhard ed., La deuda pública en América Latina: una perspectiva histórica (Frankfurt aM forthcoming)Google Scholar.

51 Electricity and tramway companies, in particular, seem to have been international in ownership and management: see the following chapters in Marichal, ed., Foreign Investment in Latin America;Google ScholarYoung, George F.W., ‘German Banks and German Direct Investment in Latin America, 1880–1940’ (57–68)Google Scholar; Nelles, H.V. and Armstrong, C., ‘Corporate Enterprise in the Public Sector Service: The Performance of Canadian Firms in Mexico and Brazil, 1896–1930’ (69–82)Google Scholar; Heras, Raul Garcia, ‘The Anglo-Argentine Tramways Co. Ltd. and its Impact in the Urban Economy of Buenos Aires, 1876–1930’ (83–92)Google Scholar.

52 For evidence of this see the market reports in financial news papers like The Economist. On the Banco del Perú y Londres and Empresas Eléctricas Asociadas, see Quiroz, Banqueros en conflido.

53 Roberts, , Schrodm, 86–92, 101–105, 137–139, 205Google Scholar.

54 Roberts (pp. 139–143) also provides a good deal ofinformation on Schroders’ involvement in the São Paulo coffee trade, including their participation in the valorisation schemes. One interesting case, relevant to the earlier discussion, is the purchase of coffee estates in 1897 by Schröder Gebrüder of Hamburg, and the flotation of a new company to operate them, San Paulo Coffee Estatés Ltd, in London, control of which was kept by the London and Hamburg associates. Whilst in outward appearance this was a British free-standing company, should one characterise it as part of an.investment group based on Schroders, and as Anglo-German?

55 Young, , ‘Anglo-German Banking Syndicates’, 17–21Google Scholar.

56 Corley, T.A.B., ‘Britain's Overseas Investments in 1914 Revisited’, Business History 36/1 (1994) 71–88CrossRefGoogle Scholar. See also Rubinstein, , Capitalism, Culture and Decline, 35–39Google Scholar. This view of Britain's continuing comparative advantage in financial services is central to the interpretation of ‘gentlemanly capitalism’ advanced by Cain, and Hopkins, in British Imperialism.Google Scholar

57 The calculations have not been done, except on a "back of an envelope’ basis. British exports to Latin America in 1913 totalled £55 million: Platt, , Latin America and British Trade, 316–319Google Scholar. Interest on investments alone, assuming £750 million of assets and a return of 4 per cent, would provide £30 million in invisibles, to which could be added merchants’ commissions on exports and imports and commissions on bills of exchange as well as shipping income and insurance premia. Further research in business archives would permit more exact assumptions about these items.

58 I owe the point about the importance of wartime economic arrangements for the peaceful withdrawal of British interests to a conversation with Marcelo de Paiva Abreu.

59 Ford, A.G., ‘Argentina and the Baring Crisis of 1890’, Oxford Economic Papers 8 (1956) 127–150CrossRefGoogle Scholar; Fishlow, , ‘Lessons from the Past’Google Scholar; Marichal, , A Century of Debt Crises.Google Scholar See also Albert, , South America, on the crisis of 1914, which Marichal does not coverGoogle Scholar.

60 The best guide to these problems is Marichal, A Century of Debt Crises.

61 Edelstein, , Overseas Investment, 125Google Scholar.

62 One issue that demands some research is the extent to which the British commercial banks financed private sector investment in Latin America during the 1920s. There is evidence that the Anglo-South American Bank, besides its involvement with the Guggenheims, had also made loans to British-owned railways and public utilities in Argentina: Heras, Raúl García, ‘Las compaías ferroviarias británicas y el control de cambios en la Argentina durante la Gran Depresión’, DesamUo Económico 29 (1990) 480Google Scholar.

63 Argentina was the only significant country not to default at all in the 1930s. Diáz Alejandro suggests this may have been because so much of the Argentine foreign debt had been repatriated that the government realised that default would not only cut it off from international financial markets but also antagonise domestic creditors: Alejandro, Carlos F. Diaz, ‘Latin America in the 1930s’, in Thorp, Rosemary ed., Latin America in the 1930s (London 1984) 27Google Scholar. It was in the interests both of the British and Argentine governments to ensure that Argentina did not default. Recent research has emphasised the importance of the Roca Funding Loan of 1934 in inter-governmental negotiations: Alhadeff, Peter, ‘Dependency, Historiography, and Objections to the Roca Pact’, in Abel, and Lewis, eds, Latin America, Economic Imperialism and the State, 367–378Google Scholar.

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65 Greenhill, Robert G. and Miller, Rory, ‘Merchants, Industrialists and the Origins of British Multinational Enterprise in Latin America, 1870–1950’ (unpublished paper; 1988)Google Scholar.

66 Jones, Charles A., ‘“Business Imperialism” and Argentina: A Theoretical Note’, Journal of Latin American Studies 12 (1980) 437–444CrossRefGoogle Scholar.

67 Miller, Rory, ‘Small Business in the Peruvian Oil Industry: Lobitos Oilfields Limited before 1934’, Business History Review 56 (1982) 421CrossRefGoogle Scholar.

68 Blakemore, Harold, British Nitrates and Chilean Politics, 1886–1896: Balmaceda and North (London 1974)Google Scholar; Lewis, Colin M., British Railways in Argentina, 1857–1914 (London 1983) 190–191Google Scholar. Similar antagonism was directed against the US-controlled Standard Oil of New Jersey in Peru and, just before the First World War, at Percival Farquhar's Brazil Railway Company. It must be borne in mind that these cases arose precisely when anti-trust campaigns in the United States had had a major success with the dissolution in 1911 of the original Standard Oil Company.

69 Lewis, Colin M., ‘The Financing of Railway Development in Latin America, 1850–1914’, Ibero-Amerikanisches Archiv 9 (1983) 266–267Google Scholar.

70 The largest Peruvian field at La Brea y Pariñas had been sold by its British owners to Standard Oil of New Jersey in 1913, but Standard operated it through a subsidiary of its Canadian-registered Imperial Oil Company, the International Petroleum Company. Lobitos, the second field, despite rumours to the contrary, remained in British hands.

71 Brown, Jonathan C., Oil and Revolution in Mexico (Berkeley 1993) 164–165Google Scholar; Philip, George, Oil and Politics in Latin America: Nationalist Movements and State Companies (Cambridge 1982) 45CrossRefGoogle Scholar.

72 A survey undertaken by the US government counted 435 British companies operating in Latin America in 1914. While their ascription of control to the British was not always accurate, this can be taken as a reasonable guide to the number of companies. United States, Federal Trade Commission, Report on Cooperation in American Export Trade (Washington 1916) 541–574Google Scholar.

73 On the Grace Contract see Miller, Rory, ‘The Making of the Grace Contract: British Bondholders and the Peruvian Government, 1885–1890’, Journal of Latin American Studies 8 (1976) 73–100CrossRefGoogle Scholar; Clayton, Lawrence A., Grace. W.R. Grace & Co., the Formative Years, 1850–1930 (Ottawa 1985) 141–175Google Scholar. There is little on the Brazilian Funding Loan using the key primary sources, but a massive literature on the Roca-Runciman negotiations. See especially Gravil, Roger and Rooth, Timothy, ‘A Time of Acute Dependence: Argentina in the 1930s’, Journal of European Economic History 7 (1978) 337–378Google Scholar; Alhadeff, , ‘Dependency’Google Scholar; Drosdoff, Daniel, Elgobiemo de las vacas, 1933–1956: Tratado Roca-Runciman (Buenos Aires 1972)Google Scholar; Tulchin, Joseph S., ‘Decolonizing an Informal Empire: Argentina, Great Britain, and the United States, 1930–1943’, International Interactions 1 (1974) 123–140CrossRefGoogle Scholar.

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75 Platt, , Finance, Trade and PolitìcsGoogle Scholar.

76 For a critique of Platt see Miller, , Britain and Latin America, 47–69. On the important mid-century period of rather confused British policy, see also John Mayo, The ‘Impatient lion’: Britain's ‘official mind’ and Latin America in the 1850s’, Ibero-Amerikanisches Archiv 9 (1983) 197–223Google Scholar; Riviere, Peter, Absent-Minded Imperialism: Britain and the Expansion of Empire in Nineteenth-Century Brazil (London 1995)Google Scholar; McLean, David, War, Diplomacy, and Informal Empire: Britain and the Republics of La Plata, 1836–1853 (London 1995)Google Scholar.

77 This paragraph summarises the arguments about the British government after 1914 developed in Miller, , Britain and Latin America, especially 192–193 and 214–216Google Scholar.

78 Rosenberg, Emily S., ‘Economic Pressures on Anglo-American Diplomacy in Mexico, 1917–1918’, Journal of Inter-American Studies and World AJfairs 17 (1975) 123–152CrossRefGoogle Scholar; Rosenberg, Emily S., ‘Anglo-American Economic Rivalry in Brazil during World War I’, Diplomatic History 2 (1978) 131–152CrossRefGoogle Scholar.

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80 Dawson, Frank Griffith, The First Latin American Debt Crisis: The City of London and the 1822–1825 Loan Bubble (Yale 1990) 143Google Scholar; Marichal, , Century of Debt Crises, 119–125Google Scholar.

81 In the literature on British diplomacy little attention has been given to the relationship between the changing nature of investment and the role played by government in Latin America. For a perceptive discussion of the US case, see Frieden, Jeffrey A., ‘The Economics of Intervention: American overseas investment and underdeveloped areas, 1890–1950’, Comparative Studies in Society and History 31 (1989) 55–80CrossRefGoogle Scholar.

82 What follows is a summary of some of the main features of recent research, but shortage of space has prevented the inclusion of much documentary evidence to support the points made. For a slightly lengthier discussion see Miller, , Britain and Latin America, 140–145Google Scholar. Two very interesting case studies based on company archives have been published: Blakemore, Harold, From the Padfic to La Paz: The Antofagasta (Chili) and Bolivia Railway Company, 1888–1988 (London 1990)Google Scholar; Eakin, Marshall T., British Enterprise in Brazil The Si John d'El Rey Mining Company and the Mono Velho Cold Mine, 1830–1960 (Durham 1989)Google Scholar. A condensed version of Eakin's arguments can be found in ‘Business Imperialism and British Enterprise in Brazil: The St John d'El Rey Mining Company Limited, 1830–1960’, Hispanic American Historical Review 66 (1986) 697–742CrossRefGoogle Scholar.

83 Alfred St John to Lord Kimberley 17 September 1894, PRO, FO 61/408; Alfred St John to Lord Kimberley 6 November 1894, PRO, FO 61/408; The Times (21 September 1894 and 22 September 1894); South American Journal (24 November 1894).

84 ‘Annual Report of Representative, 1932"; ‘Annual Report of Representative, 1933’, Peruvian Corporation archive, Lima; El Comerdo (10 September 1932).

85 University College, London: BOLSA archive, file C2/1.

86 F. Hoskins to A.W. Bolden, 21 January 1908, General Manager's Letter Book, Antofagasta (Chili) and Bolivia Railway Company archive, London.

87 Quoted inZiegler, , Sixth Great Power, 241Google Scholar.

88 H. Daubeny to Antony Gibbs & Sons, 6 September 1894, Guildhall Library, Gibbs archive, file 11470/15. The question of the relationship between foreign investment and political corruption is further developed in Miller, Rory, ‘Foreign Capital, the State, and Political Corruption in Latin America between Independence and the Great Depression’ in: Little, Walter and Posada, Eduardo eds, Political Corruption in Latin America and Europe: A Comparative Perspective (London forthcoming)Google Scholar.

89 Blakemore, , Balmnceda and North, 182–84Google Scholar; Blakemore, , From the Pacific to La Paz, 90Google Scholar.

90 On Latin American elite consumption see Bauer, Arnold, ‘Industry and the Missing Bourgeoisie: Consumption and Development in Chile, 1850–1950’, Hispanic American Historical Review 70 (1990) 227–253CrossRefGoogle Scholar; Johns, Michael, ‘The Antimonies of Ruling Class Culture: The Buenos Aires Elite, 1880–1910’, Journal of Historical Sociology 6 (1993) 74–100CrossRefGoogle Scholar.

91 The multinational manufacturing companies’ subsidiaries were largely immune from such problems. The nationalist attack on them did not really commence until after the Second World War, and then it concentrated on the large US firms like Sears, Coca Cola, or the automobile manufacturers.

92 Wright, Winthrop R., British-Owned Railways in Argentina: Their Effect on the Growth of Economic Nationalism, 1854–1948 (Austin 1974) 177–182Google Scholar. Wright is one of the few writers seriously to link British direct investment with the growth of nationalism in Latin America. Recently developed techniques of discourse analysis, a method unknown when Wright was resear-ching, could prove a fruitful approach to the study of popular nationalism.

93 Jones, ‘“Business Imperialism”’

94 It would be interesting to see how many City figures actually visited Latin America in the interwar period. The British ambassador in Buenos Aires complained, writing privately to the Foreign Office in 1929: ‘It seems incredible, but I know of directors, chairmen, even general managers, of some of the greatest companies connected with Argentina, who have never been to South America’: quoted in Heras, Raúl García, ‘Hostage Private Companies under Restraint: British railways and Transport Coordination in Argentina during the 1930s’, Journal of Latin American Studies 19 (1987) 57CrossRefGoogle Scholar. The archives of the Peruvian Corporation suggest that there were only two visits to Peru by directors of the company between the wars: Percival, Janet, The Archives of the Peruvian Corporation (London 1980)Google Scholar.

95 The methods used varied according to time and place, though there was probably an overall shift from repression to paternalism.

96 See, for example, the description of Rómulo Betancourt in the ‘Annual Report on Personalities’ produced by the British chargé d'affaires in Caracas in 1939: ‘an unscrupulous communistic agitator […] by far the most dangerous anti<apitalist element in Venezuela and a fanatic of ability’, in: PRO, FO 371/22859, A5516/5516/47.

97 Starling to Balfour 12 March 1939, PRO, FO 371/22851 A5540/480/47.

98 Quoted in Heras, García, ‘Hostage Private Companies’, 66Google Scholar.

99 Some Latin American commentators have concluded on the basis of archival research in London that Argentina and Brazil both underplayed their negotiating hand during the Second World War and its immediate aftermath. Fodor, Jorge, ‘The Origin of Argentina's Sterling Balances, 1939–1943’ in: di Telia, Guido and Platt, D.C.M. eds, The Political Economy of Argentina, 1880–1946 (London 1986) 154–182CrossRefGoogle Scholar; Abreu, Marcelode Paiva, ‘Brazil as a Creditor: Sterling Balances, 1940–1952’, Economic History Review 43 (1990) 450–469CrossRefGoogle Scholar.

100 The reasons behind such liquidations of British interest require much more research. On these examples see Greenhill, Robert, ‘Investment Group, Free-Standing Company, or Multinational? Brazilian Warrant, 1909–52’, Business History 37/1 (1995) 104–105CrossRefGoogle Scholar; Sánchez, Luis Alberto, Historia de una industria peruana: Cervecería Backus y Johnston S.A. (Lima 1978) 179–184Google Scholar; Blakemore, , From the Pacific to La Pea, 286–288Google Scholar; Eakin, , British Enterprise in Brazil, 102–104Google Scholar.

101 Sir Anthony Eden to HM Representatives in Latin America 12 August 1944, Bank of England Archive, EC 4/303.

102 Griffith-Jones, Stephany, ‘Financial Relations between Britain and Latin America’ in: Bulmer-Thomas, Victor ed., Britain and Latin America: A Changing Relationship (Cambridge 1989) 121–135CrossRefGoogle Scholar.

103 For a restatement of the Platt thesis and a powerful critique of it see Thompson, Andrew, ‘Informal Empire? An Exploration in the History of Anglo-Argentine Relations’, Journal of Latin American Studies 24 (1992) 419–436CrossRefGoogle Scholar; Hopkins, A.G., ‘Informal Empire inArgentina: An Alternative View’, Journal of Latin American Studies 26 (1994) 469–484CrossRefGoogle Scholar.

104 By the end of the 1970s a broad disillusion with the simple application of dependency theories had set in amongst Latin American historians. See, for example, Donghi, Tulio Halperfn, ‘“Dependency Theory” and Latin American Historiography’, Latin American Research Review 17/1 (1982) 115–130Google Scholar.

105 Apart from the works by Abreu, Downes, and Meyer, already cited in this paper, see also Fritsch, Winston, External Constraints on Economic Policy in Brazil, 1889–1930 (London 1988)CrossRefGoogle Scholar. British interests in Uruguay, Peru and Chile after 1914 have been much more neglected.

106 Cain and Hopkins, British Imperialism. After Gallagher and Robinson's seminal work Latin America had again sunk below the horizon of almost all British imperial historians.

107 There were major symposia on this subject at both the International Congress of the Americanists and the Congress of the International Economic History Association in 1994.