I have had, Sir, many conversations with Mr. Carmichael on the subject of your letter to him. If it had arrived early in summer, he thinks we might have obtained all our wishes. Then the critical state of affairs induced the Comte de Florida Blanca to throw out those general assertions that we should have no reason to complain of the conduct of this court with respect to the Mississippi, which gave rise to the report its navigation was opened. That minister had intimations from del Campo of the conferences between Mr. Morris and the Duke of Leeds which occasioned him to say with warmth to Mr. Carmichael now is your time to make a treaty with England. Fitzherbert availed himself of those conferences to create apprehensions that the Americans would aid his nation in case of war. Long time the conduct of Spain was fluctuating and undecided. After a variety of circumstances (which Mr. Carmichael has explained in dispatches that have miscarried and which he will repeat in others by me) a convention was formed whereby the British gained substantially every thing they at first demanded. Want of money to support a war and the queen’s intrigues together with advice from the Compte Montmorin that peace was essential for France were probably the principal causes which compelled Spain to yield the point after each side had tried which could hold out longest. The preparations cost Spain sixteen million dollars. Thus the crisis most favorable for the attainment of our wishes is past. Unless there is some secret article in the convention by which England guarantees the possessions of Spain in America, resentment may remain1 in the Spanish court for having been obliged to receive the Law. They may also desire to be in readiness for events. How far these or other motives may operate in producing a change of system with respect to the United States remains to be learnt from an adherance to the latter part of your instructions to Mr. Carmichael.

The fact is clear that the United States are daily gaining political consideration in Europe. Spain, guided by narrow policy towards it’s colonies, fears the consequence of our encreasing strength and resources. The Compte de Florida Blanca has been so long and so obstinately opposed to the admission of foreign vessels into the gulf of Mexico, that the most he can ever be persuaded to do will be to suffer some body else to negociate, to whom, if there be blame for inconsistency in policy the fault may be imputed. But the compte not being well with the queen, loses credit; and recent circumstances indicate that he is but the ostensible, while le Rena (2at the head of the finance) is the real Minister. Mr. Carmichael thinks, that if the compte will not consent to open a negociation with liberal views, it may be possible to displace him and find a successor of better dispositions: that is if the queen lives, but she is apprehensive of dying in childbed next month, which event would give the compte more weight than ever. Campomanes, who is at the head of the judicatures, Compte D’Aranda and many others entertain just ideas with respect to our country. The first is high in influence and secretly an enemy of the Compte de Florida Blanca; the last, at the head of opposition, will not come into Office himself, but in case of a change of administration, some of his friends will succeed. Mr. Carmichael, being on terms of intimacy with the first characters here, is certainly capable of effecting more at this court than any other American.

He is heartily desirous of accomplishing the object in view at all events and fully determined to return to America in twelve or eighteen months at farthest. He has expressed that intention repeatedly. [Were he]3 to be invested with full powers, perhaps he would be able to do something before his departure from this Continent. Of this however you will judge best from the tenor of his future communications and other circumstances. Nothing has passed between him and me on that subject. But I question whether this court after having sent Gardoqui to treat in America will ever send any other minister there for that purpose. Even if they would I believe more advantages might be gained by negociating here than there.

The British ambassador has conferences with the minister almost every day, which excites jealousy in the representatives of some other powers.

Something also gives uneasiness to this court. Affairs do not go well. Frequent councils are convened. The government is feeble, jealous, mercenary and unpopular. The king is a well disposed, passionate, weak man. The queen (a shrewd, well instructed woman, addicted to pleasure and expence) governs the kingdom. She is not beloved. Nor did either of them receive the usual acclamations of the people when they returned from their country residence last fall. The queen has even been insulted, which makes her appear rarely in public. For this offence twelve washerwomen have been confined and their husbands banished the kingdom because they petitioned for their release. Several natives of distinction have lately been exiled from the capital to the provinces, among others the comptesse of Galvez. Compte Segur, a Frenchman accused of being the author of a libel against the queen, within a week past died of rigorous confinement. This government, alarmed at the success of the revolution in France, shews great distrust and hatred of the French. Several have been arrested at midnight and hurried out of the country. People begin to think and even to speak in private circles freely. In some provinces dissatisfaction prevails on account of new taxes. Three regiments are just sent into Gallicia to quell those disturbances, where an attempt was made to assassinate the new General on the road. General Lacy (who commands at Barcel [ona] and has been obliged to menace the city by turning the cannon against it) is continually writing to court for men and military supplies. Tho’ the Spaniards in many places retain the appearance, habits and manners of a people who have but lately lost their liberty; yet affairs are not ripe for reformation from want of leaders, information and means of combination. The utmost diligence is used to suppress intelligence from other countries. Notwithstanding I had the necessary passports, at the frontier town I was delayed a day and not permitted to proceed, until the Officers of police had put my letters under cover to the police in Madrid. This having been done in my presence, they delivered them to me, with an apology for the strictness of their orders. On my arrival at Madrid, I went directly to Mr. Carmichael and upon his application to the Compte de Florida Blanca, the letters (which had remained in my trunk under the seal of government) were returned unopened into my hand. But notwithstanding all precautions, letters, newspapers and pamphlets come from France into this kingdom. Interesting paragraphs are copied, circulated and read with avidity.

Projects have certainly been meditated for attempting a counter revolution in France from Turin and other quarters at the same time. They proved abortive. Tho’, I believe, the designs were previously known at this court, no aid was given. In France the finances have a good aspect and the revolution is becoming confirmed. It is thought the Compte de Artois and Most of the refugees will return within the time limited by the decree of the national assembly. I have the honor to be your most obedient servt.