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the western hemisphere. When British troops seized this great Caribbean
port city, the news spread quickly through Spanish America, provoking
considerable commotion. Equally, galling had been the occupation in the
same year by British naval forces of the port city of Manila, the key outpost
of the Spanish empire in Southeast Asia. Great relief was felt after the exit
of the British troops, following the Treaty of Paris in 1763, but clearly
the Spanish crown (and its ally France) had suffered a major setback in the
international power struggle.
The effectiveness of the contemporary British military machine was
based on its notable amphibious capabilities. From early in the eighteenth
century the British Navy had outdistanced all competitors in number of
ships, ¬repower, and skill of of¬cers and mariners.14 In addition, it had the
faculty of being able to transport large numbers of troops to attack rival

13 This was an expression frequently found in contemporary Spanish documents and reports.
14 See two recent overviews: Patrick K. O™Brien, “Fiscal Exceptionalism: Great Britain and Its European
Rivals from Civil War to Triumph at Trafalgar and Waterloo,” London School of Economics, Work-
ing Paper No. 65/01, 2001 and Daniel A. Baugh, “Naval Power: What Gave the British Navy
Superiority?” in Leandro Prados, ed., Exceptionalism and Industrialisation: Britain and Its European
Rivals, 1688“1815 (Cambridge, U.K., Cambridge University Press, 2004), pp. 235“257.
Resurgence of the Spanish Empire 23

empires overseas. When the British Navy attacked Havana, over 12,000
infantry disembarked and, after two months of persistent siege, eventually
overwhelmed the relatively small contingent of Spanish troops defending
the Cuban port.15 Much as the American marines of the twentieth century,
these amphibious British forces were capable of traveling long distances,
disembarking, and seizing key enemy fortresses and ports with considerable
Historians posit that the conclusion of the Seven Years™ War (1756“
1763) “marked a fundamental turning-point in the eighteenth century
balance of power.”16 As a result of the war and the Treaty of Paris (1763),
France suffered signi¬cant territorial losses, ceding complete control over
Canada to Great Britain and temporary control of Louisiana to Spain. 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 response of the two Bourbon monarchies to the defeats suffered in
the Seven Years™ War was to adopt a common set of defensive policies against
Britain.17 The alliance between France and Spain is known in diplomatic
history as the Third Family Compact and would last for thirty years, until just
after the outbreak of the French Revolution in 1789.18 Both monarchies
based their alliance fundamentally on a joint naval policy, funneling huge
amounts of money into the rebuilding and expansion of their sea forces.
The results of such investments were not long in bearing fruit: as of 1765,
the British Navy outdistanced the combined ¬‚eets of Spain and France in
number of ships, but in the 1770s barely held parity; by 1780 the Bourbon
navies had overtaken their great rival.19 (See Table 1.2.)

15 The classic work is Allan J. Kuethe, Cuba, 1753“1815, Crown, Military and Society (Knoxville:
University of Tennesese Press, 1986), particularly Chapter 1.
16 Richard Bonney, “Towards the comparative ¬scal history of Britain and France during the long
eighteenth century,” in L. Prados, ed., Exceptionalism and Industrialisation, p. 197. For recent studies
on this war, see Fred Anderson, Crucible of War: The Seven Years™ War and the Fate of Empire in British
North America, 1754“1766 (New York: Vintage, 2000) and Juan Ortiz Escamilla, ed., Guerzas
militares en Iberoam´rica, siglos xviii y xix (Mexico: El Colegio de Mexico, 2005).
17 Perhaps the most perceptive analysis of the traditionally defensive strategy of the French and Spanish
naval forces as opposed to the more aggressive British imperial navy is that by John Robert McNeil,
Atlantic Empires of France and Spain, Louisbourg and Havana, 1700“1763 (Chapel Hill: University of
North Carolina Press, 1985), pp. 75“78.
18 See the classic study: Francis Paul Renault, Le pacte de famille et l™Am´rique: la politique coloniale
franco-espagnole, de 1760 a 1792 (Paris: Leroux, 1922). For an overview and new interpretation, see
Allan J. Kuethe and Lowell Blaisdell, “French In¬‚uences and the Origins of the Bourbon Colonial
Reorganization,” Hispanic American Historical Review, 71, 3 (August 1991), 579“607.
19 Jan Glete, Navies and Nations: Warships, Navies and State Building in Europe and America, 1500“1860,
vol. 2 (Stockholm: Almquist and Wiksell International), pp. 256, 263, and 271.
24 Bankruptcy of Empire

Table 1.2. The Atlantic Navies, 1720“1790

1720 1730 1740 1750 1760 1765 1770 1775 1780 1785 1790
Great Britain 174 189 195 276 375 377 350 337 372 447 473
France 48 73 91 115 156 175 219 199 271 268 324
Spain 22 73 91 41 137 124 165 198 196 211 253
Netherlands 79 62 65 62 62 66 79 68 70 124 123
Portugal (37) (29) (28) (28) (32) (32) (36) 41 37 34 43
” ” ” 1 6 ” ”
total 360 426 470 522 762 774 849 844 952 1,084 1,216
Note:Total displacement in 1,000 tons. The ¬gures for Portugal (1760“1770) are more approximate than the
Source:Jan Glete, Navies and Nations: Warships, Navies and State Building in Europe and America, 1500“1860,
vol. 2 (Stockholm: Almquist and Wiksell International), 1993, pp. 256, 263, and 271.

Less well known are the economic bases of the Family Compact, which
underlay the alliance during wars but also in peacetime. A growing and
perhaps dominant portion of the trade with Spanish America came to be
managed by French trading ¬rms, which exercised an increasingly preem-
inent role in the great port city of C´ diz, entrepˆ t for colonial commerce.
a o
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 ¬nancing of
much Spanish foreign trade and a prominent role in Spanish government
¬nance during the 1780s.20
Nonetheless, Spanish authorities were not willing to allow the French
to have any say in direct, colonial rule. Quite to the contrary, Spain had
the upper hand in the Americas. After 1763 France only retained control of
three Caribbean islands, sugar-rich Saint Domingue (Haiti), Martinique,
and Guadeloupe. Spain, in contrast, continued to rule over a vast, conti-
nental empire, stretching 10,000 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 ¬scal reforms,
which were intended to fortify the whole of the empire in Spanish Amer-
ica.21 While the reforms were eventually implemented in all the colonies,

20 An outstanding study is Michel Zylberberg, Une si douce domination. Les milieux d™affaires fran¸ais et
l™Espagne vers 1780“1808 (Paris: Comit´ pour l™histoire economique et ¬nanci` re de la France, 1993).
e e
21 In a classic work, David Brading called the Bourbon reforms “A revolution in government”: David
Brading, Miners and Merchants in Bourbon Mexico, 1763“1810 (Cambridge, U.K.: Cambridge Univer-
sity Press, 1971), Chapter 1. Most subsequent studies have followed his interpretation, in the sense
of emphasizing the profound nature and impact of these reforms: much of the recent bibliography
Resurgence of the Spanish Empire 25

the costs were covered unequally. Those tax districts which produced most
revenue “ especially those in New Spain and upper Peru “ were forced
to cover de¬cits in other regions of the empire, ostensibly for military

Bourbon Reforms and Grand Strategies of Imperial Defense
One of the most astonishing facts of imperial rule in the Americas was
that for over two centuries the Spanish monarchy had not been obliged to
cover major land expenses for the defense of its many colonies. The noted
historian John Parry argued in a series of classic works that prior to 1760s
the Spanish royal administration kept remarkably small military forces in
the western hemisphere.23 Subsequent research has demonstrated that the
reinforcement of army forces began in the ¬rst half of the eighteenth century,
but it is abundantly clear that the reforms adopted after 1763 were crucial
in the establishment of a much larger military establishment throughout
the colonies. 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 1760s
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. The emphasis clearly was on defense against attacks by
the British Navy and/or possible invasions of key ports by British troops.
Practically all these expenses were ¬nanced with colonial taxes: in the greater
Caribbean, mostly with Mexican silver remittances while in South America,
most were ¬nanced with ¬scal 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
1763 and early 1764 until they came up with a general plan. One of the
¬rst measures adopted was to send General Alejandro O™Reilly to Cuba to

is reviewed in Alfredo Casillero Calvo and Allan Kuethe, eds., Historia General de Am´rica Latina,
vol. 3 (Paris: UNESCO, 2000).
22 The royal treasuries at Lima and Potosi produced tax surplus that was remitted to cover external
military expenditures, mainly in Chile and Buenos Aires. Treasuries in New Granada helped ¬nance
military and naval garrisons at Cartagena. See Herbert S. Klein and John TePaske, Las cajas reales de
la real hacienda de la Am´rica espa˜ ola (siglos xvi a principios del xix) CD (Mexico: Asociaci´ n Mexicana
e n o
de Historia Econ´ mica/El Colegio de M´ xico, 2004).
o e
23 Parry wrote: “It is curious that the Spanish Indies “ reputedly so rich, so envied, so repeatedly
attacked “ possessed, until the Seven Years War, no standing army.” John Parry, The Spanish Seaborne
Empire (New York: A Knopf, 1966), p. 325.
26 Bankruptcy of Empire

reorganize both the regular army forces and a new militia. The Spanish
crown had established the ¬rst of the American ¬xed battalions in Havana
in 1719, in Cartagena in 1736, in Santo Domingo in 1738, and in Veracruz
in 1740, but after the military defeats of 1762, it had become clear that they
were insuf¬cient to meet the British threats of invasion. O™Reilly was suc-
cessful in building up a relatively effective defense establishment in Cuba in
the years following. Equally important, in 1767, Juli´ n Arriaga, minister
of the Indies, ordered a faithful but ambitious technocrat, Jos´ G´ lvez, to
travel to New Spain as royal envoy (Visitador General) with instructions to
carry out a thorough report on the defense conditions and the ¬scal adminis-
tration of the viceroyalty. Not surprisingly, the Viceroy marquis de Cruillas
was surprised by the G´ lvez mission as he arrived with extraordinary mili-
tary and political powers. After G´ lvez had presented his ¬rst reports, the
Crown authorized a broad-ranging set of administrative, ¬scal, and military
reforms to be put in practice in New Spain.24
The innovations of O™Reilly and G´ lvez proved to be models for the rest
of Spanish America in the last decades of the eighteenth century. Their
introduction should not, however, be seen as positively modern nor as an
undisputed success. They were based on a combination of traditional abso-
lutist coercion and a series of complex negotiations with local elites. While
formally proposing to eradicate ¬scal corruption, the new Bourbon func-
tionaries (many of whom arrived from Spain) did not overlook opportunities
for enrichment and the forging of alliances with local, wealthy families.25
Nonetheless, the aim of the reforms was clearly to make for a more ef¬cient
¬scal machine and a larger and pro¬cient army in each of the colonies.
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.26 Initiated by General O™Reilly,
they were continued by his allies, the O™Farrill clan of Spanish of¬cers, who
virtually came to rule the island in the second half of the eighteenth century
and the ¬rst decades of the nineteenth century. 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 of¬cers.
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. Christon Archer has analyzed the expansion of the Bourbon army in

24 The classic study is Herbert Ingram Priestley, Jos´ de G´ lvez, Visitor-General of New Spain 1765“1771
e a
(Philadelphia: Porcupine Press, 1963).
25 Linda Salvucci, “Costumbres viejas, ˜hombres nuevos™: Jos´ de G´ lvez y la burocracia ¬scal novo-
e a
hispana (1754“1800),” Historia Mexicana, 33, 2 (1983), 224“264.
26 A. J. Kuethe, Cuba, 1753“1815.
Resurgence of the Spanish Empire 27

New Spain.27 The colonial forces grew to be a signi¬cant force: by the turn
of the century, they were composed by more than 10,000 regular infantry
and perhaps 30,000 militia. 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 ¬nanced mainly
by local, commercial elites; actually, most of the of¬cers of the militia were
themselves merchants. Finally, under the careful and rigorous supervision of
G´ lvez, a special effort was made to reinforce military garrisons of cavalry
and infantry in the garrisons (presidios) in northern territories, including
Sonora, Chihuahua, and Texas.
Also important was the growth of the regular army and the militia in the
viceroyalties of New Granada and Peru as well as in upper Peru (modern-day
Bolivia), in the viceroyalty of the R´o de la Plata (modern Argentina and
Uruguay), and in Chile. At the end of the eighteenth century, the total
strength of the Spanish royal armies in the western hemisphere surpassed
30,000 regular infantry and cavalry and there were perhaps as many as
80,000 men in the different colonial militias.
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 1760s and 1770s were the greatest age of
construction of major defensive works throughout the Americas, but par-
ticularly 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
Equally important was the process of rebuilding of the Spanish Navy,
which soon became the third most powerful in the Atlantic, although this
development has only recently begun to be studied.30 Whereas British
and French historians have devoted much time and energy to analyze the
expansion of their navies in this “age of the admirals,” researchers have

27 Christon I. Archer, El ej´rcito en el M´xico borb´ nico, 1760“1810 (M´ xico: Fondo de Cultura Econ´ mica,
e e o e o
28 See Leon Campbell, The Military and Society in Colonial Peru, 1750“1820, (Philadelphia: The Amer-
ican Philosophical Society, 1978) and Allan Kuethe, Military Reform and Society in New Granada,
1773“1808 (Gainesville: University of Florida Press, 1976).
29 The fundamental work is Jos´ Antonio Calder´ n Quijano, Las forti¬caciones espa˜ olas en Am´rica y
e o n e
Filipinas (Madrid: MAPFRE, 1996), but the bibliography on the subject is vast.
30 The most important work is J. Glete, Navies and Nations, 2 vols., 1993. Also the review article by


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