The royal situado ( es, real situado) was the Spanish term for revenues that the

viceroyalties A viceroy () is an official who reigns over a polity in the name of and as the representative of the monarch of the territory. The term derives from the Latin prefix ''vice-'', meaning "in the place of" and the French word ''roy'', meaning "k ...

Peru , image_flag = Flag of Peru.svg , image_coat = Escudo nacional del Perú.svg , other_symbol = Great Seal of the State , other_symbol_type = National seal , national_motto = "Firm and Happy f ...

New Spain New Spain, officially the Viceroyalty of New Spain ( es, Virreinato de Nueva España, ), or Kingdom of New Spain, was an integral territorial entity of the Spanish Empire, established by Habsburg Spain during the Spanish colonization of the A ...

New Granada New Granada may refer to various former national denominations for the present-day country of Colombia. * New Kingdom of Granada, from 1538 to 1717 *Viceroyalty of New Granada, from 1717 to 1810, re-established from 1816 to 1819 *United Provinces of ...

, and

Rio de la Plata Rio or Río is the Portuguese, Spanish, Italian, and Maltese word for "river". When spoken on its own, the word often means Rio de Janeiro, a major city in Brazil. Rio or Río may also refer to: Geography Brazil * Rio de Janeiro * Rio do Sul, a ...

sent to finance colonial frontier defenses against internal and external enemies. Soon after Pedro Menendez de Aviles founded

St. Augustine, Florida St. Augustine ( ; es, San Agustín ) is a city in the Southeastern United States and the county seat of St. Johns County on the Atlantic coast of northeastern Florida. Founded in 1565 by Spanish explorers, it is the oldest continuously inhabi ...

in 1565 , it became apparent to the Spanish crown that depredations by pirates and the resistance of the native population would prevent Spanish settlements from becoming self-sufficient in ''La Florida'', despite their ranching and farming operations. As a consequence of this state of affairs, Philip II instituted annual transfers, known as the ''situado'', from the Spanish treasury to pay the

presidio A presidio ( en, jail, fortification) was a fortified base established by the Spanish Empire around between 16th and 18th centuries in areas in condition of their control or influence. The presidios of Spanish Philippines in particular, were cen ...

payroll and other expenses. This money was derived from the king's portion of precious metals mined in the Americas that was not transported to Spain, but rather was distributed throughout the colonial territories to fund their administrative and defense expenses. This system of financial transfers between the hundred or so treasury offices or royal cajas (''cajas reales'') spread across Spain's

empire An empire is a "political unit" made up of several territories and peoples, "usually created by conquest, and divided between a dominant center and subordinate peripheries". The center of the empire (sometimes referred to as the metropole) ex ...

in the Americas and the Philippines. These intercolonial tax flows, or situados, formed a vital part of the Spanish monarchy's vast and complex fiscal system. There was a royal office in every important town. This system ensured a mutual interchange of compensation and financial support among the colonies. Remittances by the colonies that yielded the largest tax revenues defrayed the administration and defense costs of the poorer colonies. The silver mines of Mexico, especially in the second half of the 18th century, furnished an increasing sum spent directly in the Americas and not recorded by the

royal treasury A treasury is either *A government department related to finance and taxation, a finance ministry. *A place or location where treasure, such as currency or precious items are kept. These can be state or royal property, church treasure or i ...

in Madrid. The Viceroyalty of New Spain therefore not only provided important sums of precious metals for the Spanish

metropole A metropole (from the Greek '' metropolis'' for "mother city") is the homeland, central territory or the state exercising power over a colonial empire. From the 19th century, the English term ''metropole'' was mainly used in the scope of ...

but also financed the largest part of the empire's defenses in the greater Caribbean. Private business developed to take advantage of the flow of capital raised by the situado and reaped growing profits for the upper colonial classes in military provisions, transport, currency exchange premiums, loans, and private trading. The Real Situado from the

Viceroyalty of Peru The Viceroyalty of Peru ( es, Virreinato del Perú, links=no) was a Spanish imperial provincial administrative district, created in 1542, that originally contained modern-day Peru and most of the Spanish Empire in South America, governed fro ...

financed the Spanish

Army of Arauco The Army of Arauco ( es, Ejército de Arauco) was a professional army in the service of the kings of Spain that was based in Spanish-Mapuche frontier, south-central Chile, during the 16th to 19th centuries. It was notable for being a rare example ...

as a result of the

Arauco War The Arauco War was a long-running conflict between colonial Spaniards and the Mapuche people, mostly fought in the Araucanía. The conflict began at first as a reaction to the Spanish conquerors attempting to establish cities and force Mapuche ...

.Lacoste, P. 2005. El vino y la nueva identidad de Chile. '' Revista Universum'', 20, 24-33. Most of the silver came from

Potosí Potosí, known as Villa Imperial de Potosí in the colonial period, is the capital city and a municipality of the Department of Potosí in Bolivia. It is one of the highest cities in the world at a nominal . For centuries, it was the location o ...

in present-day

Bolivia , image_flag = Bandera de Bolivia (Estado).svg , flag_alt = Horizontal tricolor (red, yellow, and green from top to bottom) with the coat of arms of Bolivia in the center , flag_alt2 = 7 × 7 square p ...

References

History of Chile Arauco War Economic history of Chile Military economics Viceroyalty of Peru {{chile-hist-stub

See also

References