This was due in no little measure to the peace and prosperity of Spain during the long reign of King Carlos III. For the overseas colonies of the European powers were so closely associated with and dependent upon the mother countries, that their healthy progress as a rule indicated healthy political and economic conditions of the latter. If there was at this time any unrest and anxiety at the courts and in the diplomatic circles of Europe this was due to events that were happening in North America and were beginning to shake the foundations of the old order. On the nineteenth of April, 1775, there had been fired the first shot in the struggle upon which the thirteen British colonies had entered in order to secure their freedom from the unbearable restrictions which Britain had imposed upon them. That shot sounded an alarm which was heard all over the world and sent a thrill through millions of hearts. The spirit that had dictated the works of the French encyclopedists and had worked like a leaven of liberty in millions of minds, had become incarnate in the British colonists and was clamoring for consummation of its ultimate aims. Monarchs and ministers convened in solemn conferences and deliberated seriously upon the possible effects of the action taken by the rebels against British overrule.

Spain and France, sharing with Britain colonial possessions in America, were profoundly disturbed. They had been allies in the recent war against Britain, and they still depended upon each other for mutual counsel and consolation. The king of France, Louis XVI., an autocrat if ever there was, had an excellent minister of finance in Turgot, a man of extraordinary foresight, of liberal judgment and of rare administrative ability. After Vergennes, the minister of foreign affairs, who favored the emancipation of America, had forwarded to the king a cautiously worded report upon the situation, Turgot was asked to give his opinion, and did so in a memorial which very succinctly stated the position of both France and Spain, and contained the following significant passages:

"The yearly cost of colonies in peace, the enormous expenditures for their defence in war, lead to the conclusion that it is more advantageous for us to grant them entire independence, without waiting for the moment when events will compel us to give them up. This view would, not long since, have been scorned as a paradox, and rejected with indignation. At present we may be the less revolted at it, and perhaps it may not be without utility to prepare consolation for inevitable events. Wise and happy will be that nation which shall first know how to bend to the new circumstances, and consent to see in its colonies, allies and not subjects. When the total separation of America shall have healed the European nations of jealousy of commerce, there will exist among men one great cause of war the less, and it is very difficult not to desire an event which is to accomplish this good for the human race. In our colonies we shall save many millions, and, if we acquire the liberty of commerce and navigation with all the northern continent, we shall be amply compensated.

"The position of Spain with regard to its American possessions will be more embarassing. Unhappily she has less facility than any other power to quit the route she has followed for two centuries, and conform to a new order of things. Thus far she has directed her policy to maintaining the multiplied prohibitions with which she has embarrassed her commerce. She has made no preparations to substitute for empire over her American provinces a fraternal connection founded on identity of origin, language, and manners, without the opposition of interests; to offer them liberty as a gift, instead of yielding it to force. Nothing is more worthy of the wisdom of the king of Spain and his council, than from this present time to fix their attention on the possibility of this forced separation, and on the measures to be taken to prepare for it."

Alas! the warning of Turgot was not heeded by the government of Spain and a whole century had to elapse and many lives had to be sacrificed before the Spanish colonies in America were to gain their independence! Both the French and the Spanish king were opposed to taking sides in the war which Britain was waging with her colonies; but they were quite ready secretly to help those colonies, knowing that their success meant the weakening of British power! Bancroft reports in his "History of the United States" (Vol. V., p. 321):

"After a year's hesitation and resistance, the king of France, early in May, informed the king of Spain that he had resolved, under the name of a commercial house, to advance a million of French livres, about two hundred thousand dollars, towards the supply of the wants of the Americans."

His example was followed by the king of Spain, who, a few weeks later, without the knowledge of any of his advisers except Grimaldi, sent a draft for a million livres more, as his contribution!

Such had been the effect of the first shot fired in the struggle for American independence. When the news of the official declaration of this independence on July fourth, 1776, reached Paris and Madrid, the worst fears of the upholders of the old régime and the most exalted dreams of the champions of the new political ideal were realized. But neither France nor Spain dared openly to take sides against Britain, both having ample reason to avoid being involved in new wars. As Turgot intimated in his message, Spain was far more directly interested in the step taken by the British colonies and the possible effects it might have upon her own possessions. Hence France decided to do nothing without the agreement of Spain. Again it is Bancroft who gives the clearest statement of the economic position of Spain and her reasons for avoiding a break with Britain. He writes in his "History of the United States" (Vol. V., p. 535):

"Equal to Great Britain in the number of her inhabitants, greatly surpassing that island in the extent of her home territory and her colonies, she did not love to confess or to perceive her inferiority in wealth and power. Her colonies brought her no opulence, for their commerce, which was soon to be extended to seven ports, then to twelve, and then to nearly all, was still confined to Cadiz; the annual exports to Spanish America had thus far fallen short of four millions of dollars in value, and the imports were less than the exports. Campomanes was urging through the press the abolition of restriction on trade; but for the time the delusion of mercantile monopoly held the ministers fast bound. The serious strife with Portugal had for its purpose the occupation of both banks of the river La Plata, that so the mighty stream might be sealed up against all the world but Cadiz. As a necessary consequence, Spanish shipping received no development; and, though the king constructed ships of the line and frigates, he could have no efficient navy, for want of proper nurseries of seamen. The war department was in the hands of an indolent chief, so that its business devolved on O'Reilly, whose character is known to us from his career in Louisiana, and whose arrogance and harshness were revolting to the Spanish nation. The revenue of the kingdom fell short of twenty-one millions of dollars, and there was a notorious want of probity in the management of the finances. In such a state of its navy, army, and treasury, how could it make war on England?"

Nobody realized these facts better than King Carlos III. His new ministers, D. Jose Monino, Count de Florida Blanca, who had succeeded Grimaldi, and Galvez, the minister for the Indies, agreed with the sovereign; and when Arthur Lee, emissary of the new republic, appeared in Europe and sought an audience with the authorities in Madrid, he was detained at Burgos to confer with Grimaldi, who was then on his way to his native Italy. Lee found little encouragement and satisfaction in this interview; he was told that the Americans would find at New Orleans three thousand barrels of powder and some store of clothing, and that Spain would perhaps send them a cargo of goods from Bilbao, but he was urged to hurry back to Paris. Florida Blanca, too, very decidedly expressed his aversion to the new republic and was reported to have said "that the independence of America would be the worst example to other colonies, and would make the Americans in every respect the worst neighbors that the Spanish colonies could have." Thus the constant fear that the close proximity of an independent state might rouse the spirit of independence in her own colonies, determined the policy of Spain toward the War of American Independence.