The Mexican situado was the name for the transfers of money from New Spain (Mexico today) to pay for the costs of the military defense of the island of Puerto Rico. These funds came from the silver mines of New Spain and went to Puerto Rico as part of an integrated plan for defending the territories in the Indies. Beginning in 1535, the Americas saw numerous attacks by pirates and corsairs that put Spain’s colonial monopoly in jeopardy. Due to Puerto Rico’s geographic position, the naval defense plan developed by Spain included Puerto Rico as part of a defensive perimeter consisting of Florida, Havana and Santo Domingo, among other points. The Mexican situado was mainly allocated for building forts, buying artillery and paying the salaries of the troops.

The situado was created by a royal decree in 1584, but the periodic transfers did not begin immediately because of numerous delays. Despite the delays, the flow of capital definitely impacted life in San Juan for more than 200 years. For example, the ships that transported the situado were used to export island products. The construction of fortifications required abundant labor, providing jobs for residents and allowing many slave owners to rent out their slaves. Finally, the salaries paid to soldiers supported local commerce. In other words, the San Juan economy, to a large degree, was based on the situado, which was irregular in arriving and fluctuated in amount. When the Bourbons took power in Spain, there was a review of the defense systems and more funds were required to maintain and repair the fortifications, which had faced four great enemy attacks. The Mexican situado came to an end in 1810 when New Spain declared its independence.

The most obvious impact of the Mexican situado was the militarization of the islet of San Juan. Scholars have suggested that the transfers of capital promoted the development of two parallel socio-economic dynamics on the island. On one hand, life in San Juan offered better economic opportunities, due to the jobs related to the defense of the empire with the construction of fortifications and the constant alert for a ship that would provide an opportunity for trade. On the other hand, daily life on the rest of the island, which had no role in defense or legal trade, depended for survival on subsistence agriculture and smuggling of meat, hides and other products. The island was divided between those who were part of the official economy and those who subsisted on the underground economy. Luis González Vales, the official historian of Puerto Rico, has proposed that although the Mexican situado fulfilled its objective of building a nearly impregnable defense system, it did not encourage an integrated economic development of the island.

Author: Gricel Surillo Luna
Published: September 12, 2014.

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