Since my arrival in Spain I have had the honor of writing to you on the 3d. of feb. and 6th. of March. Nothing has since occurred which seemed to authorize my troubling you, except in my joint communications with Mr. Carmichael. The ordinary business of this mission has been followed by him of course exclusively, as well as his usual correspondence with you. The several state papers and public acts which have appeared here from time to time he has forwarded therewith, as he has informed me by the way of Cadiz and Lisbon.

Our joint letters will have informed you of the progress or rather of the stagnation of the negotiation with which we are jointly charged. This situation of things which it has appeared to us impossible to avoid under present circumstances, is extremely painful to us both, but peculiarly so to me, from the distance which I have been sent for this express object at a considerable expence to the public, and without a probability of rendering them any service whatever. I have not thought myself as yet authorized to relieve myself from this situation by returning to my residence, because that would have been breaking off the conferences which could not have failed in whatever manner it had been done, to have excited here the alarm which we thought it essential to avoid under present circumstances, for the reasons which have been detailed to you in our joint letters. I flatter myself however that this will not long be the case, as I hope we shall soon recieve letters from you written after the President shall have been informed of the change of relations between this country France and England. These are now so different from what they must have appeared to you at the time of your instructions being drawn up, that we have considered it our indispensable duty to leave time for additional ones. Our last advices from you being of Nov. 3: seem not to have contemplated their probability—and indeed could not well have done it, from the unsettled state of political data, at that time. We have since recieved the American gazettes to the 1st: of Jany.—and at that epoch our information from America stops. This ignorance of affairs there adds also to our hesitation here.

In my last letters I gave you my particular opinion of the situation of this country and the efforts they might find within their power for the present war. There still remains a great deal of zeal and unanimity in all the influential classes with respect to it. Offers continue to be made by all descriptions of persons. It is said that few have been realized, because the King has declined accepting them as not being in want—but in general voluntary contributions must be considered as a precarious resource. Some very great efforts however have certainly been made by individuals both of the laity and clergy. Several of the former have raised considerable bodies of troops at their own expence—and in one respect their zeal has done injury, as they have paid so large bounties and given so considerable pay to their troops, as to have checked the enlisting in the main army, for the bounty and pay there allowed.

Still a very great number of troops have been put on foot—they are divided into three armies—one in Catalonia under the command of M. Ricardos. It is by far the largest and the most active—a considerable part of it has advanced into Roussillon and has gained several advantages over the French troops—the numbers are differently stated—the best accounts state those who have passed the frontier at twenty thousand. It is said they treat the inhabitants well—a great number of villages have sollicited to remain under the King’s authority—and several certainly sent to invite M. de Ricardos to pass the frontier to their relief. The probability is that before the arrival of the Spanish troops there were two parties—and that afterwards, the greater number were for the strongest side, and that the rest remained silent, so as to give the appearance of unanimity of which the Spanish government boasts. The second and smallest army, consisting of about 15,0001 men, is in Aragon under the command of the Prince de Castel franco—it has not yet passed the frontier. The third is commanded by M. Carott—its number uncertain, from its extending over several posts, on the frontier of Biscay. It has made different incursions into France, always with advantage, but has returned after each success. It has been expected for some time that it would proceed and besiege Bayonne—as that of Ricardos has done Bellegarde, which place it is thought can not make a long resistance.

These armies are known to be very illy provided with all the usual articles—either from bad management—or from want of funds—constant complaints have been coming from the generals to the minister of war—who throws the blame on the minister of finance—the want of necessaries, it is said alone prevents the two main armies from penetrating further into France.

This country has also made considerable efforts in the marine department—the list which they have published amounts 50 ships of the line equipped for sea, of which 8 of 112. guns—37. vessels above 30. guns—and 49. smaller—making in the whole 136 vessels carrying 5736 guns—and 44,381 men. If this account could be closely examined there would no doubt be found several puffed articles. Still they have certainly fitted out a very considerable fleet. They have in the Mediterranean at sea 25. ships of the line—this fleet lately proceeded to Sardinia—the French troops on two little islands adjoining to Sardinia, surrendered to the Spanish admiral, to the number of 1000—with one or two frigates. The French fleet of 22. sail of the line was expected to sail from Toulon about three or four weeks ago—all communication with that country being cut off, except by sea from Italy or England, we know nothing later from thence. The English fleet it is expected will soon join the Spanish. It is thought their object will then be to pursue the French fleet if at sea—or take them if at Toulon, and destroy that port. What will surprize you is that the Spanish desire this latter event, and would aid to effect it.

These efforts have been made by Spain without laying new taxes, and without loans. It is a matter of surprize how these additional expences could be faced2 without additional revenue and that with a deficit which it is supposed existed previous to the war. The only extraordinary means, which are known, are the offers abovementioned (which certainly could have not have gone a great way towards equalling the extraordinary expences) and an operation made some time ago with which you were certainly duely informed by Mr. Carmichael, the taking into the King’s possessions the sums which the several commonalties and chambers of commerce, had in their respective common treasures to answer their common needs—these sums were considerable, and as the charges which occur are gradual and much inferior to them, and which the King is in future to take on himself, it put at his disposition a considerable quantity of disponible cash. This however, was opposed by several commonalties as being a violation of their property, and in some instances, though I believe few, their opposition was successful. The general dissatisfaction that this fiscal measure gave, has been stifled by subsequent events.

In addition to these means some suspect that there has been an abuse also in adding to the sum of Vales reales. This however would be soon detected, and their current price does not seem to indicate a well founded suspicion of such an abuse.

The importation of specie from America is also mentioned as a means—but only the excedent of the present or last year, above the other years can be taken into that account3 as this resource made a part of the ordinary revenue. It seems generally agreed that the late importations both on public and private account4 have been more than former ones, and this is corroborated by the statement of coinage in Mexico for the year 1792. which I have procured here, and which I have the honor of inclosing to you.

Should the war continue these extraordinary means must be exhausted and it is generally thought there would be considerable difficulty in levying additional taxes which would then seem indispensable. Several look to this moment as a very trying one for this country, and indeed it has been found to be such for every country whose taxes were already oppressive, and pushed to so great an extent. Attempts will probably be made towards anticipating on the revenue of posterity, in order to meet present wants. Should this country be able to push that system as far proportionally, as some others of Europe have done, they will find it a rich mine. Hitherto they have not been obliged, or not been able from the state of their credit to exploite it to any considerable degree.

On the whole this country, it seems to me, may be considered in a state of probation both with respect to its internal and external affairs: and time (perhaps a short time will suffice) must be the authority to which I must refer you.

I need not mention to you the steps which have been taken to place the supreme administration in the hands of a young favorite, as you will have of course been informed of them—the effects produced by this event are very different, from what was expected, owing in a considerable degree to the character and disposition of the present minister, and the art which was employed by the Queen to bring it about—and still more perhaps to the minds of all being exclusively occupied by the events in France and the war with that country.

During Ct. de Florida Blanca’s administration, all those who desired to see his fall, placed their eyes on Ct. Daranda for his successor. They might both be considered as national favorites. The Queen alone perhaps looked to her favorite as a rival for them both. She saw that the step from Ct. de Florida Blanca to a young Garde du corps without education, fortune, connexions or any other known recommendation but an handsome person would be too great, and particularly over the head of Ct. Daranda. His ruin was therefore resolved on, at the same time that it was determined that he should be the instrument of the ruin of his rival—this was done by bringing him into the ministry, and preventing him whilst there from taking any measure that could [serve?] any part of the public. As they had begun by excusing Ct. de Florida Blanca’s disgrace in favor of Ct. Daranda’s promotion—they ended by ill humour against him for having deprived them of a favorite without doing any thing to replace him in their affections. As the public march quick in this line they were soon out of sight of the past services and reputation of Count D’Aranda and saw only the present contemptible role he was made to play. When the public mind was found thus prepared the favorite was brought forward to supplant him and was supported in some degree by the public voice, from opposition or ill will to Count D’Aranda, who is kept as a sitting member in the council, in order to prevent his recovering from his loss of public opinion. As Madrid being the capital, is the most apprehended by the court they have kept themselves and the favorite out of its sight as it were, by residing at the different sitios. The young minister in the mean time by popular manners has gained the affections of the people around him—and by an uncommon degree of prudence, never committing himself on any occasion has acquired a good deal of respect, so that he begins to be really, contrary to what could have ever been expected, a favorite minister with the public. Whether the same caution and prudence will be used when he shall find himself well established in their affections, as have been to acquire them I cannot say—but if that should be the case he may I think promise himself a long administration. He enjoys one advantage also which will be found5 to give him a considerable advantage over his predecessors. The established usage here of every minister being absolute in his own department has ever impeded the march of administration. Ct. de Florida Blanca in the height of his power only commanded the departments where he had been able to place his favorites—the American department for instance was always independent of him during the life of M. de Galvez. The present minister on the contrary, by being identified as it were with the persons of the Royal family, is raised above envy and would meet with opposition from none of the ministry—and thus the government has acquired a degree of unity and force which it had not before. This unexpected effect of the ministry of a young uninformed man brought so rapidly from the lowest condition to the highest degree of power—and which in other countries would have produced a general outcry on one side, and imprudent insolence on the other, besides the causes above mentioned must depend in some degree also on the Spanish character. The issue cannot be said yet to be fully ascertained, but there seems every reason to believe it will end well for all parties.

Notwithstanding these subjects do not make a part of the business with which I am charged here jointly with Mr. Carmichael, still I have thought it might not be improper to give you my sentiments respecting them, as they appear to me to have necessarily an indirect connexion with it. It is for the same reason I mention the following intelligence which has been lately communicated to me with a good deal of caution though I think in a way that may be relied on.

It is the intention of this government to make New Orleans a free port to all nations with the restriction that vessels in order to be admitted there must first touch on their way at one of two Spanish ports assigned for that purpose—viz. Alicant in the Mediterranean—and a port on the coast of Gallicia on the Atlantic side. A person in the department of the Indies, is now preparing the subject and the ordinance for the purpose by the order of M. de Gardoqui who has that department. It is said this will take place very soon, by which is meant from three to six months. The object is to form an entrepot at New Orleans, by which Spain may supply their American possessions with such goods as they may chuse to admit there—and to encourage the fur trade with the Indians.

It does not appear that the U.S. are contemplated in this arrangement, or at least in a favorable manner—nothing is intended therein to facilitate the coming down the river to N. Orleans—and there does not appear as yet any idea of exempting American vessels going by sea, from touching at one of the Spanish ports abovementioned.

M. de Gardoqui has never given us the most distant hint of this intention of making N. Orleans a free port, and indeed we should have inferred a very contrary disposition from all his conversations with us. Should it be realized on the footing abovementioned it would seem rather to be with an hostile view to the U.S. and in order to enlist in the defense of their possession of N. Orleans, such nations as should be benefited by being thus admitted to it. I shall endeavor to ascertain the progress of this business—and will inform you of such as may be made during my stay here.

There is a circumstance which has been for some time and still is depending between this country and England with which you have undoubtedly been made acquainted by Mr. Pinckney, and which it may not be amiss to repeat here, as it shews a disposition in the parties on which we counted in some degree. When Ld. St. Helens arrived here, he proposed to the minister that the rules with respect to re-captures should be the same between England and Spain, as those inserted in the treaty of commerce between England and France. At that time the English commerce in the Mediterranean was much exposed to the French cruisers—and the ministry here thought it would be a losing agreement for Spain—some delay took place therefore before its acceptation. In the mean time a English vessel was recaptured by a Spanish cruiser—and after some difficulty was either delivered or agreed to be delivered—about the time of this agreement, the rich Register ship with specie and merchandize to the value, it is said of 4,000,000 of dollars was recaptured by a part of the English fleet. The Spaniards are now earnest in reclaiming her. The English, it seems, make difficulties—and affirm that Spain did not agree to give up the English vessel until after the minister got notice of the recapture of the Register ship although unknown to the English Ambassador here. It is doubted much here whether she will be restored and this has created already much ill humour in the administration. How far they will venture to shew it I cannot say—but I do not doubt this country will with time have many reasons to repent of their present position, and many causes of dissatisfaction with their new friends.

I have only now to beg pardon for troubling you with so long a letter, and to assure you of the perfect respect with which I have the honor to be, Sir, your most obedient & most humble servant