IN EXPLAINING the economic difficulties of the United Kingdom, the proponents of the Marshall Plan have strongly emphasized the recent shrinkage in British foreign and the consequent loss of income. Testifying before the Senate Committee on Appropriations on June I7, I949, for instance, Paul Hoffman, administrator of the European Reconstruction Program, stated that British overseas investments had all been out by the recent war.2 This article will examine the extent to which that statement holds true in respect to British in Latin America.3 It may be stated at the outset that there had not been any marked decline in the net earnings of British capital in Latin America since I939. The net income from this investment in I948 was ?I8,536,620. It was ?I9,00,329 in I939. The difference is only ?437,709! A decided decline in the nominal value of the aggregate investment had occurred, but the average yield had improved, rising from I.6 per cent in I939 to 2.9 per cent in I948. Nearly 62 per cent of the total British investment in Latin America yielded no return in I939; the capital earning no income was less than 40 per cent in I948. The total investment had been considerably reduced, but there had been more than a corresponding shrinkage in the sour part of it. The Latin-American segment of the British overseas investment had not been washed out. It had been pared down by expropriations, redemptions, liquidations, purchases, and various other means, but the net yield on what remained had gone up, especially the returns on shipping, banking, mining, petroleum, and various miscellaneous enterprises.4 British capitalists received an income of ?4,030,466 in I939 from an investment of ?324,I49,858 in Latin-American government bonds. The rate of return was approximately I.2 per cent. In I948 they received an income of ?4,248,693 on a nominal investment of ?206,145,0I7 in these government securities. The rate of return was more than 2.I per cent. A total of ?2Io,89I,878 invested in government bonds in I939 yielded no income; this bad portion of the investment in governments had been reduced to ?5,457,460 by the close of I948. A nominal shipping investment of ?I2,753,348 in the Latin-American t Professor of American history, University of Chicago. 2 Hearings on the Aid Appropriation Bill (8ist Cong., ist sess.), p. 446. Mr. Hoffman probably meant to say that the United Kingdom's foreign debts now exceed its foreign investments. According to Cleona Lewis, The United States and the Foreign Investment Problem (Washington, D.C., I948), p. 6o, British oversees declined from ?4.6 billion in I939 to ?3.3 billion in I947. 3 The statistics which follow have been compiled from the South American Journal (London) for I939, I940, I948, and I949. Stock-Exchange Official Year-Book (London) for the same years has been utilized for background and some checking of detail. 4 All statistics in this analysis dealing with income refer to net income after payment of LatinAmerican taxes.