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Philip V chartered creation of the Havana Company to stimulate trade and provide Florida's situado

Source: The Governorship of Spanish Florida #122

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The Reform of 1740: The Royal Havana Company
The economic trials and tribulations endured by Florida finally brought about a fundamental change in the subsidy system. The Puebla scheme of 1702 had clearly failed. The bishop had never been able to eliminate the old evils—delays, high prices, high shipping costs, and low-quality supplies—and all of these had continued to work innumerable hardships on the Floridians. In 1740, therefore, the king instituted a change in the method of supplying Florida with its annual needs.

The reform was closely tied to the establishment of the Havana Company, a joint stock enterprise similar to the British East India Company. Chartered in December, 1740, this venture aimed at stimulating Cuban trade with Spain and at promoting the royal tobacco monopoly on the island. The Caracas Company, founded 12 years earlier to increase the Spanish cacao supply, was a convenient model. For a time, at least, this enterprise had been profitable. Its stock had paid lucrative dividends, the cacao supply had increased in Spain, and it had eliminated the necessity for a situado in the Caracas area. Undoubtedly the king, the Council of the Indies, and stockholders in the Havana Company hoped to obtain similar results in Cuba and Florida.

Philip V issued the royal cedula setting up the Havana Company on December 18, 1740. The venture had a total capitalization of one million pesos in shares of 500 pesos each. The king, a leading subscriber, bought 100 shares. The company agreed to maintain a coast guard around Cuba, to repressing smuggling, to carry military goods free of charge to military and naval bases in the Caribbean, to build its own ships at its own cost, and to furnish Florida its annual quote of money and supplies. In return the company received special privileges. It obtained a monopoly over the Cuban tobacco trade with Spain, exemption from port taxes, and the right to enter Spanish ports duty free with Cuban sugar and hides. These same vessels could also carry flour, flagstones, and shipbuilding materials without imposts. For 14 years ships of the Havana Company could transport rum and wine duty free.

(Tepaske GSF)