Uruguay : deuda pública y capital local. Una compleja relación (1905-1939)

In this paper the Uruguayan public indebtedness from 1905 to 1939 is estimated. The timeframe covers a particular historical period characterized by the end of the "civil wars", the consolidation of the political power of batllists and the settlement of agreements in order to restore the international public credit after the country's moratorium declaration in 1932. The evolution of the domestic and foreign public debt and its determinants, the prevailing conditions to access to international borrowing and the macroeconomic sequels of the different types of public indebtedness are some of the topics here studied. The present analysis makes a contribution to discuss three issues. First, the real burden of the country's dependence on international capital markets; second, the behavior of the local capitalists before the fiscal needs of the public sector and finally, the characteristics of the policy decisions to deal with the cease of payments led by the two deep local financial crisis. The central hypothesis of this study is that the dynamics of the Uruguayan public debt has been dependent on the international capital market and that only in times of limited access to this source of resources has the domestic capitals played an important role to cover the public sector financing needs. In turn, the domestic capitalists have shown a flexible attitude so that they have been prone to invest in public debt just when its risk and profit conditions were considered acceptable.