When the British Navy attacked Havana, over 12, infantry disembarked and, after two months of persistent siege, eventually overwhelmed the relatively small contingent of Spanish troops defending the Cuban port. But the Spanish monarchy was also hard hit, losing Florida to the British and being put on the defensive in the Caribbean.
The clear victor was Great Britain, although, paradoxically, increased defense requirements in North America would generate fateful tensions with the thirteen colonies. The results of such investments were not long in bearing fruit: as of , the British Navy outdistanced the combined fleets of Spain and France in number of ships, but in the s barely held parity; by the Bourbon navies had overtaken their great rival. Prados, ed. For an overview and new interpretation, see Allan J. The Atlantic Navies, — Great Britain France Spain Netherlands Portugal 48 22 79 37 73 73 62 29 91 91 65 28 total 41 62 28 — 62 32 — 66 32 — 79 36 1 68 41 6 70 37 — 34 43 — 1, 1, Note:Total displacement in 1, tons.
The figures for Portugal — are more approximate than the others. Less well known are the economic bases of the Family Compact, which underlay the alliance during wars but also in peacetime. The ties between the two monarchies were also strengthened by the active role of French merchants and merchant bankers in Spain during the second half of the eighteenth century as they took a leading role in the financing of much Spanish foreign trade and a prominent role in Spanish government finance during the s.
Quite to the contrary, Spain had the upper hand in the Americas.
Spain, in contrast, continued to rule over a vast, continental empire, stretching 10, miles, from Texas and California to Cape Horn. Such extensive imperial responsibilities implied considerable costs for defense, but most especially after the defeats suffered at the hands of the British military forces. It was then that the government of Charles III decided to launch a set of major military, administrative, and fiscal reforms, which were intended to fortify the whole of the empire in Spanish America. Those tax districts which produced most revenue — especially those in New Spain and upper Peru — were forced to cover deficits in other regions of the empire, ostensibly for military defense.
The noted historian John Parry argued in a series of classic works that prior to s the Spanish royal administration kept remarkably small military forces in the western hemisphere. Equally striking was the fact that most defense expenses were covered by local treasuries. The army and navy buildup had begun in the metropolis in the s but was promptly applied in Spanish America.
The new military policies were based on a three-pronged strategy: 1 building colonial armies and militias, 2 rebuilding the Spanish naval forces, and 3 strengthening a great number of military fortresses in the Caribbean and, to a lesser degree, in South America. Practically all these expenses were financed with colonial taxes: in the greater Caribbean, mostly with Mexican silver remittances while in South America, most were financed with fiscal funds from upper Peru. The main objectives of the military reforms in Spanish America were designed by a secret committee of imperial defense, appointed by the monarch, Charles III, meeting in Madrid on a regular basis during late and early until they came up with a general plan.
Treasuries in New Granada helped finance military and naval garrisons at Cartagena. See Herbert S.
The Spanish crown had established the first of the American fixed battalions in Havana in , in Cartagena in , in Santo Domingo in , and in Veracruz in , but after the military defeats of , it had become clear that they were insufficient to meet the British threats of invasion. Their introduction should not, however, be seen as positively modern nor as an undisputed success. They were based on a combination of traditional absolutist coercion and a series of complex negotiations with local elites.
While formally proposing to eradicate fiscal corruption, the new Bourbon functionaries many of whom arrived from Spain did not overlook opportunities for enrichment and the forging of alliances with local, wealthy families. Several historians have analyzed the army buildup in various colonies.
Allan Kuethe has described in detail the military plans put in place in Cuba, which were perhaps the most successful. Paradoxically, as historians Kuethe and Marchena have demonstrated, the Spanish army reforms led to an expansion of the number of native-born Cubans who became officers.
The new military elite, moreover, was closely bound to the rising sugar slave-owning oligarchy as well as to the wealthiest Havana merchants. During the same decades, military reform proceeded apace in colonial Mexico. Kuethe, Cuba, — The former were concentrated mainly in the region of Veracruz since this was considered the most likely zone for possible British invasions in the future. The militia forces, on the other hand, were organized in practically all cities of the viceroyalty, being financed mainly by local, commercial elites; actually, most of the officers of the militia were themselves merchants.
Simultaneous to the expansion of land forces was the launching of an ambitious and expensive series of investments in great fortresses in many Spanish American ports.
The s and s were the greatest age of construction of major defensive works throughout the Americas, but particularly in the Caribbean. Huge amounts of tax funds were funneled into building of defensive walls and bulwarks as well as imposing fortresses at the entrance to the ports of Havana, San Juan, Cartagena, Santo Domingo, and Veracruz.
These were equipped with great numbers of cannon, placed strategically at the entrance to bays and ports to impede any new British invasions.
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Glete, Navies and Nations, 2 vols. Also the review article by N. However, the recent monumental study by Jan Grete has forcefully demonstrated that, already quite early in the eighteenth century, the Spanish naval forces became the third most important in the world, after those of Great Britain and France. The maritime contest for world power intensified from the s onward as both France and Spain pushed forward with new construction of warships and frigates.
The Bourbon allies were bent on establishing parity with their more vigorous, naval rival, Great Britain. As a result, the French and the Spanish governments plowed enormous amounts of money into warship construction during the last four decades of the eighteenth century. The Havana-built warships carried a total of 3, cannon and the frigates cannon, altogether a formidable force. A review of imperial finance demonstrates that it was New Spain that financed the bulk of construction of the great warships built in Cuba during the century by sending large annual silver subsidies to Havana as well as basic provisions.
The tax reforms which financed the military buildup are analyzed in detail in the next chapter, but here we wish to reiterate that the greater part of military and naval expenditures for the defense of empire was covered by the colonies themselves. Metropolitan Spain did not have to finance more than a fraction of the expenses in the Americas.
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The colonial administrations 31 For data on construction of warships, see numerous charts in J. Glete, Navies and Nations, vol.
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Thrasher provide the information on each of the ships built in Havana. In addition, they provided victualling of the Spanish warships in American waters, which included provisioning of ships in the greater Caribbean, in the River Plate, as well as the few warships on the Pacific coast and the famous Manila galleon that yearly crossed the largest ocean in the world. In order to understand how these vast requirements were financed, it is essential to focus attention on the vast network of interimperial fiscal transfers. In the section that follows, particular attention will be focused on the contributions of the richest tax colony — the viceroyalty of New Spain — to the defense of the Spanish empire.
The Fiscal Logic of Imperial Expenditures The fiscal and military system of the Spanish empire in the Americas was older, quite different, and more complex than that of its imperial rivals.
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This vast imperial organization had its fulcrum in Spain, yet it spanned a great part of the western hemisphere as well as the Philippines and was based to a large degree on a complex network of tax transfers between the different treasuries of the different viceroyalties and captaincy generals. But how centralized was the fiscal administration in the empire? This is a hotly debated issue among historians today with a confrontation between two points of view.
On the one hand, there is a traditional view that emphasizes the success of the Bourbon monarchy in establishing a professional fiscal bureaucracy, a modern accounting system, and an increasingly centralized tax machinery.
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But funds were also employed in various other purposes, in addition to the expected naval and military defence. This system can be defined in terms of the operation of basic principles that explain the disbursement of public monies as well as the logic of expenditures of the multiple treasuries of the empire. A first, basic and secular principle of imperial finance applied since the sixteenth century was that the largest number of expenses should be covered in situ with the tax income collected on a regional level and accumulated in a local caja real treasury.
These remittances, nonetheless, were not necessarily limited to the viceroyalty itself; they frequently were also shipped abroad to different points of the empire, as we will see. In the case of New Spain, we can observe the dynamics of this tridimensional fiscal system in the transferences regularly realized in the late eighteenth century among the different twenty-four regional treasury offices of the viceroyalty, in most cases to cover military expenditures.
A second level of expenditures were the transfer of surplus fiscal funds from one colony to another which were known as situados, those from New Spain being directed principally to the Greater Caribbean, including Cuba, Santo Domingo, Puerto Rico, Florida, Louisiana, and Trinidad. These constituted a broad network of tax transfers between the different colonies, the quantitative importance of which suggests that historians should rethink many fundamental aspects of the way that imperial finance operated in Spanish America.
For information and estimates, see C. Marichal and M. Marichal, La bancarrota del virreinato , Chapter 1. Source: Appendix Tables 1. New Spain also provided regular fiscal subsidies for the Phillipines and occasional sums for Guatemala and Central America in times of emergencies.