Gardoqui and Sons of Bilbao: the Spanish supply line to the Continental Army, 1777-1778
While refusing both alliance and recognition, the Spanish crown routed material aid to the Continental Army through a Bilbao merchant house. Arthur Lee's papers, printed by resolution of Congress in 1829, carry the terms Spain offered at Vitoria in 1777, the order to ship naval stores from Bilbao the moment the Court of Spain furnished the money, an invoice for 1,926 Palencia blankets sent to Cape Ann in 1778, and the price Spain later named for a loan: Florida and ship timber.
Why this wins its question: Ask what Spain contributed to American independence and the answer, in English, is either nothing, or Bernardo de Galvez at Pensacola after 1779, or a warm generality about "Spanish aid" with no document behind it. The specific pre-belligerent channel - a Bilbao merchant house acting for the crown while the crown refused recognition - is asserted far more often than it is evidenced, usually from secondary retellings with round numbers such as thirty thousand blankets and no citation. This object quotes the file instead: the memorandum Lee wrote at Vitoria on 17 March 1777 naming all four channels in the same breath as the refusal of an alliance; his order that the naval stores at Bilbao ship "the moment the Court of Spain agrees to furnish the money", which is the sentence that shows whose money it was; and one complete invoice - the George, Captain Job Knight, Cape Ann, Elbridge Gerry, 1,926 Palencia blankets at 27 riales - whose arithmetic is checked here line by line. It refuses the two temptations of the subject in both directions. The aid was not charity: the firm's own letter says the commission was cut from 5 per cent to 3, that the blankets had to be bought with specie sent ahead into the country round Palencia, and that half the commission would be profit. And Spain's help was not disinterested: the volume's contents record Gardoqui suggesting the cession of Florida and a supply of ship timber as the means of obtaining the loan Congress wanted. What is left after both deductions is still a documented supply line, which is more than the usual accounts of this episode can show.
Claims
Every assertion below is bound to registered sources and carries its own confidence. Weight them; do not treat the page as uniformly authoritative.
The terms are recorded in the American envoy's own memorandum, written in Spain. From Vitoria on 17 March 1777, Arthur Lee set down for the Count de Florida Blanca what he had understood from the Marquis de Grimaldi to be the intentions of the King of Spain towards the United States: that "for very powerful reasons his Majesty cannot at this moment enter into an alliance with them, or declare in their favor"; that they might nevertheless depend on his sincere desire to see their rights and liberties established, and on his assisting them as far as might be consistent with his own situation; that "for this purpose the house of Gardoqui at Bilboa would send them supplies for their army and navy from time to time"; that they would find some ammunition and clothing deposited for them at New Orleans; that their vessels should be received at the Havanna on the same terms as those of France; and that the Ambassador at Paris should have directions immediately to furnish their Commissioners with credit in Holland. Four channels, none of them an alliance.
The aid was designed to be deniable, and the same page says so twice over. Grimaldi added that his Majesty would do these things "out of the graciousness of his royal disposition, without stipulating any return", and that if upon inquiry any able veteran officers could be spared from his Irish brigade, the States should have them. Lee then records that he communicated these intentions to Congress "in terms as guarded as possible without mentioning names, so that the source of those aids" should not be disclosed should the despatches fall into hostile hands. A power that will not be named in a despatch is not yet a belligerent, and the secrecy is part of the evidence of what the aid was.
The supplies were not a promise only; by late 1777 they had arrived and had created an administrative problem worth writing about. Lee to Messrs Gardoqui and Sons at Bilboa, Paris, 15 November 1777: "I have learnt from America, that there was a difficulty on the arrival of the supplies sent to America through your house, in knowing whether they were for Congress, or for Mr Gerry, to whom they were consigned." The route ran to a private consignee in New England, and the confusion over whose property the goods were is a consequence of routing state aid through a merchant house.
Behind the merchant house stood the Spanish treasury, and one sentence fixes the relation between them. Lee to the Committee of Foreign Affairs, Paris, 19 December 1777: "I have directed all the naval stores that are collected at Bilboa to be shipped forthwith, the moment the Court of Spain agrees to furnish the money." The goods were assembled at Bilbao on American account and released by a decision taken in Madrid; the firm was the instrument, not the source.
One shipment is documented to the last item, and it is the most concrete thing in the whole file. "Invoice of seventyfive Bales of Merchandise shipped on board the George, Captain Job Knight, for Cape Ann, consigned to Elbridge Gerry, on Account of Arthur Lee." Numbers 1 to 75: "75 bales containing 1926 fine large Palencia blankets, at 27 riales, 52,002,00". Charges: "To 413 vares of wrappers, at 2 riales, 826" and "To packing, lighterage, &c. 750", together 1,576,00; sum 53,578,00; "Commission, 3 per cent, 1,607,11"; total "Riales of V. 55,185,11". Below it: "Placed to the debit of Arthur Lee. Bilboa, the 28th of March, 1778. Errors excepted. J. GARDOQUI & CO."
The firm's covering letter shows that this was commerce on a reduced rate rather than charity, and it is the firm itself that insists on the distinction. James Gardoqui and Co. to Arthur Lee, Bilboa, 1 April 1778: "You will see by this invoice, that agreeable to what you are pleased to communicate to us in your very esteemed favor of the 6th instant, we have reduced our commission to 3 per cent. But, dear Sir, besides our being allowed 5 per cent by all the American friends we have worked for in the present troublesome times", the blankets "must be collected in the country round about Palencia, and the money must be remitted in specie there long beforehand for the purpose"; they were obliged to pay the freight and run the risks of it and to make good the collectors' expense and trouble out of the same commission, "so that at present we reckon that half of it will be our profit." The supply line reached into Castilian villages and was financed in coin sent ahead of the goods.
The invoice's arithmetic checks, which is worth stating because it is what distinguishes an account from an assertion. 1,926 blankets at 27 riales is 52,002 exactly, as printed; the two charges of 826 and 750 make the 1,576 printed; and 52,002 plus 1,576 is the 53,578 printed. Three per cent of 53,578 is 1,607.34 riales, printed as "1,607,11", and 53,578 plus that commission is 55,185.34, printed as "55,185,11" - consistent with a second column counted in maravedis at 34 to the rial, which is the vellon reckoning the abbreviation "Riales of V." implies. The expansion of that abbreviation and the reading of the fractional column are this corpus's inference from the figures, not a statement made on the page.
What Spain would not give, and the price it named for what the Americans wanted most, is in the same volume, and it belongs beside the invoice. The editor's table of contents summarises the loan correspondence of 1778: Lee to Florida Blanca, 18 July, enclosing the resolutions of Congress relative to the negotiation of a loan of two millions sterling and requesting that application be made to the King of Spain for it; James Gardoqui to Lee, Madrid, 13 August, "Cannot obtain the loan required in Spain"; Gardoqui to Lee, Madrid, 20 August, "Suggesting the cession of Florida and supply of ship timber to Spain, as a means of obtaining the loan"; Lee to the Committee of Foreign Affairs, 21 August, "Difficulty of obtaining a loan"; and Lee to the Committee, 31 August, "Requesting instructions as to the cession of Florida, and the supply of ship timber to Spain, on condition of supplies of money." Spain's interest in the war was Spain's, and it was territorial and strategic; the blankets and the Florida question are two ends of one policy.
The limits of this file bound everything above it. These are Arthur Lee's papers as transcribed by an editor in 1829 from manuscripts in the Department of State, not the manuscripts; the loan sequence in the preceding claim is the editor's summary and not a letter opened here, which is why it is carried lower; and the record is one commissioner's, so it shows what passed through Lee's hands and cannot measure the whole of Spanish aid, of which the New Orleans and Havana channels named at Vitoria leave no accounts in this volume. Lee is moreover a party in his own dispute with Silas Deane over the public accounts - on the page facing the Gardoqui invoice he is demanding that "we should settle the public accounts relating to the expenditure of the money intrusted to us for the public" - and a claimant to credit for the Spanish connexion he is describing.