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The Financial Contribution of New Spain to the War against
Great Britain, 1779“1783
Both the French and the Spanish monarchies took advantage of outbreak of
the war of independence of the thirteen North American colonies (1776“
1783) to launch their own offensives against Great Britain in Europe and
in the Caribbean. The central objectives of the military campaigns initiated
in the western hemisphere by the Spanish crown in 1779 included the

65 AGN, Reales C´dulas Originales, vol. 92, exp. 48, f. 88.
e
66 R. de la Sagra, Historia econ´ mico-pol´tica y estad´stica, pp. 280“281.
o ± ±
67 The eighteenth century administrative experts Fonseca and Urrutia calculated the average annual
value of Mexican remittances for military expenses to Havana at 1,285,000 pesos between 1785 and
1789 (this obviously did not include the tobacco subsidy) whereas their equally expert colleague
Maniau proposed a ¬gure of 2,674,213 pesos as the average between 1788 and 1792. On the other
hand, the accounting book of the royal treasury of Veracruz for the year 1791 gave a total of 1,050,000
pesos but did not include the category of naval expenses. See Fabi´ n Fonseca and Carlos de Urrutia,
a
Historia general de la Real Hacienda, XIII“XXVII (Mexico: Imprenta de Vicente G. Torres, 1845“
1853); Joaqu´n Maniau y Torquemada, Compendio de la historia de la Real Hacienda de Nueva Espa˜ a
± n
˜
escrito en el a˜ o de 1794, notes by Alberto Mar´a Carreno (Mexico: Sociedad Mexicana de Geograf´a
n ± ±
y Estad´stica, 1914), pp. 43“46; AGN, Caja Matriz, Libro Manual de cargo y data de la Real Caja de
±
Veracruz para el a˜ o de 1791.
n
42 Bankruptcy of Empire

reconquest of Florida, the reinforcement of Spanish positions in Louisiana,
(mainly along the southern Mississippi), and attacks upon British positions
in the Bahamas, Jamaica, and Honduras.68 The costs of the war implied great
expenditures. These were incurred by Spanish military forces operating in
various points in the greater Caribbean, although the requirements were
greatest in Havana where the bulk of troops and ships were concentrated
from early 1780 onward. In order to ¬nance this great military effort,
the Crown made demands on the treasuries of New Spain that went far
beyond the standard levels of remittances to Cuba. So considerable were
these charges that by the early 1780s they surpassed the capacity of the tax
structure of New Spain to provide suf¬cient funds and obliged the viceroy to
call for a series of forced and voluntary loans from all sectors of the Mexican
population.69
The of¬cial correspondence between Viceroy Mart´n de Mayorga from
±
New Spain and military commanders in Havana illustrates the extraordinary
volume of ¬nancial support and other types of assistance sent to Havana
from Veracruz, including large amounts of provisions and manpower.70
As historian Melvin Glascock argued, during the war (1779“1783) New
Spain “was virtually the sole support of Spanish arms in the Americas . . . and
made for the mother country and her allies a contribution unmatched in
the history of colonial Spanish America.”71 The estimates by Glascock and
fellow historian James Lewis of the huge shipments of silver from Veracruz
to Havana during the war are similar despite the fact that they used different
primary sources: Lewis estimated that thirty-four million silver pesos were
sent from Mexico as situados to the Caribbean during the military con¬‚ict,
while Glascock argued that these remittances reached thirty-seven million
pesos (or dollars) in the same ¬ve years.72

68 The ¬rst three objectives were successful, whereas the raids on Honduras were a failure and the
naval campaign of Jamaica proved a major failure as a result of the sea victories obtained by the
British Navy under the command of Admiral Rodney. On the Bahama campaign, see James A.
Lewis monograph The Final Campaign of the American Revolution. Rise and Fall of the Spanish Bahamas
(Columbia: University of South Carolina Press, 1991).
A previous study of these loans can be found in Carlos Marichal, “Las guerras imperiales y los
69
pr´ stamos novohispanos™, 1781“1804” Historia Mexicana, xxxix, 4 [156], 881“907.
e
The information on the shipments is found in a variety of sources in the AGN as well as in two
70
excellent and infrequently cited doctoral theses by James Lewis and Melvin Glascock, which provide
an abundance of data on the crucial role of New Spain in the war. See Melvin Bruce Glascock, “New
Spain and the War for America, 1779“1783,” Ph.D. thesis, Lousiana State University, 1969 and
James A. Lewis, “New Spain during the American Revolution, 1779“1783: A Viceroyalty at War,”
Ph.D. thesis, Duke University, 1975.
M. Glascock, “New Spain and the War,” p. 285.
71
The source used by Glascock is a very detailed document titled “Decretos, Planos Certi¬caciones sobre
72
el Costo de la Guerra,” Archivo Hist´ rico Nacional (Madrid) Consejo de Indias, leg. 20721, cuaderno
o
v., fs. 77“109, cited in M. Glascock, “New Spain and the War,” pp. 265“274. The estimates of
Resurgence of the Spanish Empire 43

The contribution that these remittances represented for the overall war
effort of the Spanish crown can only be judged indirectly, but their impor-
tance is manifest. This ¬nancial subsidy was worth over 750 million reales
(one silver peso was equal to twenty reales de vell´ n, the monetary unit
o
most used in the treasury accounts in Spain). This was an extraordinary
sum for the period if we consider that it was equivalent to twice the annual
peacetime defense expenditures of the metropolitan treasury at Madrid.73
A dif¬cult problem is to ¬nd out exactly how these monies were spent
since only a part remained in Cuba while the rest was remitted for var-
ious military operations throughout the greater Caribbean. It should be
noted, however, that the majority of the funds went to ¬nance three types
of military expenditures: (1) the expeditionary army under the command of
Bernardo G´ lvez, the headquarters of which was at Havana, but operated in
a
the Floridas and Louisiana; (2) the Armada, under the direction of Admiral
Jos´ Solano, that carried out various naval operations against the British
e
throughout the greater Caribbean; and (3) the military garrisons in Cuba,
headed by Captain-General Juan Manuel Cacigal, which included thou-
sands of Spanish, Cuban, and Mexican troops. While there are a number of
historical studies that analyze aspects of the military campaigns undertaken
by these forces, there are only a few studies of the precise disbursement of
funds.74
The ¬nancial documents generated by the war are abundant but dispersed
and are sometimes contradictory. The of¬cial correspondence of the viceroys
in the Mexican archives includes the con¬dential reports sent by Viceroy
Mart´n de Mayorga to the Minister of Indies Jos´ de G´ lvez including
± e a
much information on the silver remittances sent to Havana on Spanish
warships. Mayorga frequently complained that the Cuban functionaries
rarely acknowledged receipt of the shipments and that he therefore had
insuf¬cient information on effective disbursements in the island; he even
went so far as to suggest to G´ lvez that he believed that important sums
a

J. Lewis, “New Spain during American Revolution,” 146 are from AGN, Hacienda, vol. 395, exp.
7. Despite being derived from different archival sources, these ¬gures also agree with those in the
treasury summaries of Veracruz, published by Klein and TePaske: the total amount registered as
leaving Veracruz for Havana between 1779 and 1783 is 37.8 million pesos. See Veracruz data in J.
TePaske and H. Klein, Ingresos y egresos de la Real Hacienda: these can be consulted in Excell format
at the database “Estad´sticas Hist´ ricas de M´ xico” in the Web site of El Colegio de Mexico, www.
± o e
colmex.mx, where a link will be found in “Biblioteca” under “Bases de datos” from July, 2007.
73 This estimate is based on the exchange rate of 20 reales vell´ n to each silver peso. For comparative
o
¬nancial data on metropolitan ¬nance, see Pedro Tedde, Pol´tica ¬nanciera y pol´tica commercial en
± ±
el reinado Carlos III, Actas del Congreso Internacional sobre Carlos III y la Ilustraci´ n (Madrid:
o
Ministerio de Cultura, 1989), vol. 2, p. 143.
74 An exception is Johanna von Grafenstein Gareis, Nueva Espa˜ a en el Circuncaribe, 1779“1808: rev-
n
oluci´n, competencia imperial y v´nculos intercoloniales (Mexico: UNAM, 1997), which provides excellent
o ±
data. Also very useful is J. A. Lewis, “New Spain during the American Revolution,” pp. 130“159.
44 Bankruptcy of Empire

were used for illicit purposes. In October 1781 the viceroy informed G´ lvez
a
that he should not pay attention to the complaints of the top royal of¬cial
at Havana who said that he had not received enough money. Mayorga added
that, in fact, enormous sums had been sent in the previous months from
Veracruz to Cuba to assist in the war effort: Mexican tax remittances had
surpassed 12 million silver pesos, plus 1.5 million pesos in provisions (¬‚our
and hard tack, ham, bacon, salt meat, powder, etc.) and the transfer of a
force of 1,913 Mexicans who were to be employed by the Spanish naval
squadrons operating out of Cuba.75
That the viceroy of New Spain was responsible not only for sending funds
and supplies but also for evaluating the scale of the ¬nancial effort required
to sustain the war in the Caribbean is con¬rmed by his correspondence with
a variety of royal functionaries. In October 1782, the chief treasury of¬cer of
New Spain informed Mayorga that he had constructed a provisional estimate
of war expenditures in the previous year and was using it to calculate future
disbursements. On the basis of the correspondence between Admiral Solano,
General Bernardo G´ lvez, and the Intendant of New Spain Pedro Antonio de
a
Cos´o he was able to calculate that the Armada operating out of Havana had
±
absorbed 5,600,000 pesos in the last three years, whereas the expeditionary
armies in Florida and Louisiana as well as the garrisons in Cuba had required
7,000,000 pesos.76 The same treasury of¬cer noted that all of these funds
had been sent punctually to Havana on various warships, surpassing all
previous expectations of the ¬nancial resources that could be obtained in
New Spain for this costly war.
Despite assurances from Mexico, the Minister of the Indies at Madrid,
Jos´ G´ lvez, remained profoundly concerned that all military expenses be
ea
covered punctually as the war intensi¬ed. In 1780 he had dispatched a
high-ranking of¬cial, General Francisco Saavedra (later minister of ¬nance
under Charles IV) to supervise and speed up the remittances of funds from
Veracruz to Havana, as well as to coordinate the provisions of additional
funds and supplies to the allied French ¬‚eet in the Caribbean. In a letter to
G´ lvez, dated September 1782, Viceroy Mayorga made a point of noting
a
that when Saavedra arrived with royal orders to remit ten million pesos
for the war, everyone had thought this impossible. Nonetheless, the task
had been ful¬lled as one warship after another left Veracruz, carrying silver
for Havana. The ¬rst to leave was the battleship San Francisco de Asis that
carried Saavedra on board and one million pesos to Havana, followed by
another ship with two million pesos a few days later. Subsequently, the San
Agust´n took more than four million pesos to Cuba and, on a second journey,
±
the San Francisco de Asis loaded another two million pesos. Mayorga argued

75 AGN, Correspondencia de Virreyes, vol. 129, exp. 1317, fs. 181“283.
76 AGN, Marina, vol. 12, fs. 144“149.
Resurgence of the Spanish Empire 45

that this effort constituted “an increase never before seen in shipments of
silver on account of the royal treasury” and he added that this had been
possible in part because of his success in raising a combination of forced
and voluntary loans from all sectors of the population of the viceroyalty.
Although the transfer of silver was the most valuable contribution of
New Spain to the war waged in the Caribbean against Great Britain, other
important contributions included food provisions for the troops and other
war supplies. Large amounts of gunpowder from the royal powder fac-
tory in Mexico City were sent to military forces at Havana, New Orleans,
Campeche, Tabasco, and El Guarico. Other important war supplies sent
from Veracruz were copper sheets for ship repairs and cargos of lead. Food
provisions sent from Mexico included ¬‚our, dried vegetables, and ham.
The amount of ¬‚our (from the region of Atlixco/Puebla) was considerable,
totaling 3,983,400 pounds sent to Havana between 1779 and 1783.77 On
the other hand, it is also important to note that even larger quantities
of supplies (particularly ¬‚our) came from the United States, as Philadel-
phia shippers plied their wares most actively and were paid in return with
Mexican silver.78
The provisions sent out from Mexican ports to Cuba were destined not
only for the sustenance of the Armada and for the garrisons at Havana
but also to supply the several thousand troops operating out of Mobile
and Pensacola which successfully carried out the reconquest of Florida and
reinforcement of Spanish garrisons in New Orleans. It is interesting to note
that a considerable portion of the soldiers and sailors who participated in the
diverse battle campaigns in Florida and Louisiana were Mexican: in 1780
some 2,000 seamen were sent from Veracruz to reinforce the naval squadrons
at Havana, and in 1782, 3,000 men of the Crown Regiment from Mexico
City and 1,000 troops of the Puebla Regiment were incorporated into
the infantry in Cuba, Louisiana, and Florida. Finally, hundreds of Mexican
convicts were sent out each year to ful¬ll their sentences, doing forced labor
in Cuban shipyards and fortresses.79


77 M. Glascock, “New Spain and the War,” pp. 265“273, provides detailed lists of provisions sent year
by year.
78 Linda Salvucci has written extensively on this subject: see, for example, “Atlantic Interesections:
Early American Commerce and the Rise of the Spanish West Indies (Cuba), Business History Review,
79 (Winter 2005), 781“800. For additional analysis of this, see essays in Jacques Barbier and
Jacques y Allan J. Kuethe, eds., The North American Role in the Spanish Imperial Economy, 1760“1819
(Manchester: Manchester University, 1984).
79 For information on the soldiers of the Mexican Crown Regiment, see C. Archer, El ej´rcito en el M´xico
e e
borb´nico; M. Glascock, “New Spain and the War,” pp. 265“273, provides annual information on
o
the transfer of seamen from Veracruz. Finally, according to Lucas Alaman, Historia de M´xico, vol.
e
1, Appendix, Document 1, the principal police court of New Spain, the Tribunal de la Acordada,
condemned 10,244 men as convicts to do hard labor at military garrisons between 1782 and 1808.
46 Bankruptcy of Empire

Apart from covering strictly military expenditures, the remittances of
Mexican silver to Cuba were also used to cover a set of international debts
of the Spanish government of Charles III. For example, a total of three
million pesos were paid at Havana between 1781 and 1783 to the agents of
´
the French“Spanish syndicate of bankers headed by Francisco de Cabarrus,
who was instrumental in the establishment of the Bank of San Carlos in
1782.80 This bank was charged with handling the new Spanish internal
debt (vales reales) of the administration of Carlos III and with service of the
external debt, mostly held in Amsterdam. The Mexican silver was used for
repayment of loans advanced to the Madrid administration to guarantee
the success in issue of government bonds, known as vales reales, and for the
launching of this ¬rst Spanish banking institution.
Last but certainly not least, Mexican funds delivered to Cuba indirectly
contributed to the most important military victory of the thirteen colonies
against the British in 1781. This little known chapter in the early history
of the United States merits more research but can be brie¬‚y summarized.
As of early 1781 a great French naval ¬‚otilla, headed by Admiral Count De
Grasse, was stationed in the port of Cap Francois in Saint Domingue (Haiti)
¸
but needed one million silver pesos from their Spanish allies. The money
was to be used for sailors™ pay but more importantly to pay the thousands of
French troops, led by Count Rochambeau, who were already heading with
American forces under George Washington to blockade Cornwallis in the
Chesapeake. The viceroy at Mexico, Mart´n de Mayorga, received orders to
±

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