From the top of the ferris wheel you could feel a moist wind come swiftly up across the river and over Ramirez Beach. The blue went out of the river water, so that it looked like a choppy brown sea, as wide as the horizon. On the beach, men with sunburned bellies poured a last thermosful of hot water over the damp leaves in their mate gourds and sipped hot mate, the strong bitter tea of the Plate River gauchos, through silver straws.

Sand was blowing up over the road toward the casino, and the palatial turrets of the hotel, and the park where a young man had been writing poems into a spiral notebook (he would stop, and wave his pen slowly, beating time). The old Mercedes taxis lined up outside the casino to carry away middle-aged women and couples from Buenos Aires who had lost their pension checks or their vacation money on the roulette tables. There is only rouelette, played with plastic pastel-colored chips in big square rooms lit up as bright as church bingo halls.

The ferris wheel trembled, and came around too fast. At the hotel, chambermaids unlocked empty rooms and banged the windows shut to keep out the rain. The hotel has Persian rugs, and carved wooden armchairs with velvet seats, and a grand mosaic and marble foyer that always seems to be empty.

You can stand under the awning out front and watch the cars roll down the boulevard by the river: a 1948 Plymouth, spring green, big as a baby whale and striped with chrome; a '32 Citroen, black and low, grill like an inverted v; a '38 Fiat, sky blue, bug-eye lights, voluptuous fenders, and a chrome swan curving up from its hood. There are Model As, '57 Chevrolets, 50-year-old pickup trucks, no model name visible, that their owners identify simply as "used."

They are clean, cared for, even gleaming now and then. Foreigners have bought up many of them -- the producers of "The Untouchables" were said to have found two choice Packard touring cars in Montevideo. But in this country they are just old cars. They were bought before tariff barriers set up to protect local industry made foreign cars a luxury for the very rich. Their owners reupholster, repaint, change transmissions, add new mirrors, and quite often lust after the gradually cheapening new Japanese imports that do not consume so much gas.

"LOOK -- THE national symbol," said an Urguayan politican the other day, pointing with a little maliciousness at the tower of the Montevideo soccer stadium, which was built for Uruguay's first world soccer championship, and looks faintly like the inside of a washing machine.

"The place where we reached our glory," he said. "It was constructed in 1930. It was not bad." And he nosed his car (a fairly modern little Ford) down a street where banana trees arched over like giant maples. Women in summer dresses glanced up from the stone steps of solid gray buildings with thick wooden doors, and a milk-wagon man flicked the reins on his horse.

Uruguay, as the people here are particularly fond of observing, was once a very advanced place. Its exports kept the country (or certain sectors of it) wealthy -- the rolling green pastureland yielded beef, and leather, and wool -- and there was money enough for English roadsters and neo-Cannes hotels.

A single visionary president, Jose Batlle y Ordonez, nationalized businesses and expanded the protective role of the government until Uruguay, much earlier than most of the Western Hemisphere, offered shortened work weeks, minimum wage, free workers' medical service, unemployment pay, free compulsory education and illegitimate children's inheritance rights. Laws provided women the right to divorce without giving a reason.

That was in the 1920s and for the last 30 years the national obsession has been figuring out how to simultaneously retrieve that comfort and give at least passing notice to the second half of the century. Export markets began to dry up after the Korean War, and that speeded up an economic decline that was poison to a social structure accustomed to steady wealth.

"THE COUNTRY had already arrived at a standard of living different from other countries of Latin America," said another politician. The politicians talk about politics. The "civilian-military" government, a president plus military junta, silenced the politicians and prohibited all political activity almost eight years ago.

The economy, by then well into its second decade of steady decline, had begun to tailspin in those years. There were strikes, and in 1972 the national growth rate was minus 3.6 percent. Urban and mostly middle-class guerrillas called Tupamaros had taken to kidnapping and murders to press for radical economic change. Then-president Juan M. Bordaberry gave the military free rein to eliminate the Tupamaros, and in 1973, when Congress refused to allow the Army to try a congressman for his alleged Tupamaro ties, the Army dibanded Congress and took control.

Now the growth rate is up, as official economists pursue their version of the "free trade" policies that are supposed to be reshaping the economics of lower South America -- lowered tariff barriers to end protection of industry, public expenditure cutbacks, end of price controls. Inflation ran 84 percent in 1979, an estimated 43 percent in 1980.

Labor unions are silenced. Exports are increasing, imports are booming, and Argentines and other foreigners are pouring money into resort condominiums and Uruguayan bank accounts. Between 1971 and 1978, real wages -- based on the minimum wage figure -- dropped by 42 percent. There is low unemployment, many people think, because Uruguayans pack up and leave.

They emigrate by the hundreds of thousands -- up to a fifth of the current population of 3 million is a commonly heard figure. They go with young families, according to some population studies, so that after you have been in Montevideo for a few days, you understand all at once why the city feels profoundly different from Lima, or Sao Paolo, or any of the South American cities to the north that are struggling with exponentially growing populations.

It is not simply that in Montevideo the people are Spanish-Italian and to the north they are intricate caramel blends of Indian and sometimes black. The faces in Montevideo are old. You can walk down any crowded street in Brazil and feel as though you are caught in a class change at the public high school. In Montevideo, what you remember is the soft-skinned woman in her 50s choosing ripe tomatoes at a vegetable stand.

"The best of the country, those the country has spent a fortune on, the professionals, the engineers, the professors, the best musicians -- they've all gone," said a proscribed politician who spends his days holding a sort of clandestine salon in his apartment. "The best actors -- they've all gone. And the very best are the ones who will never come back."