Real Situado facts for kids

The royal situado (which means "royal allowance" or "royal fund" in Spanish) was a special system used by the Spanish Empire. It involved money that richer Spanish colonies, like the Viceroyalty of Peru and New Spain, sent to other colonies. This money was used to pay for defenses against enemies, both from inside and outside the empire.

Why the Royal Situado Started

The idea for the royal situado began in 1565, after Pedro Menéndez de Avilés founded St. Augustine, Florida. It quickly became clear to the Spanish king that the settlements in Florida couldn't support themselves. This was because of constant attacks by pirates and resistance from the native people. Even with farming and ranching, the colonies struggled.

Because of these problems, King Philip II decided to send money every year from the Spanish treasury. This money, called the situado, paid the salaries for soldiers in forts (called presidios) and covered other important expenses.

How the Money System Worked

The money for the royal situado came from the king's share of the valuable metals, like silver, mined in the Americas. Instead of sending all this silver back to Spain, some of it stayed in the colonies. It was used to fund their government and defense needs.

This system of sending money between different treasury offices, called cajas reales (royal strongboxes), was spread across Spain's huge empire. There were about a hundred of these offices in the Americas and the Philippines. These money transfers were a very important part of Spain's complex financial system.

Every major town had a royal office. This system made sure that colonies could help each other financially. The colonies that collected the most taxes would send money to pay for the running and defense costs of the poorer colonies. For example, the silver mines in Mexico, especially in the late 1700s, provided a lot of money that was spent directly in the Americas.

Impact of the Royal Situado

The Viceroyalty of New Spain (which was mainly Mexico) not only sent a lot of precious metals to Spain but also paid for most of the empire's defenses in the wider Caribbean region.

Private businesses also grew because of this flow of money. They made more and more money by providing supplies for the military, arranging transport, handling money exchanges, giving loans, and trading goods. This helped the wealthier people in the colonies become even richer.

The Real Situado from the Viceroyalty of Peru was especially important for financing the Spanish Army of Arauco. This army was fighting in the Arauco War in what is now Chile. Most of the silver for this came from Potosí, a famous mining town in present-day Bolivia.

See also

In Spanish: Real Situado para niños