By the Treaty of Fontainebleau, 1762, and the Treaty of Paris, 1763, Louis XV ceded New Orleans, along with the portion of Louisiana lying west of the Mississippi River, to Spain. It was not until 1764 that the French officials were informed of the transaction and instructed to relinquish the Colony. For two more years the city remained abandoned by France and unclaimed by Spain. Indignation on the part of the citizenry against the transfer ran high, and was expressed in open resentment toward the Spanish commissioner, Don Antonio de Ulloa, who took possession of the Colony in 1766.
On October 28, 1768, a mass meeting of citizens, at which Ulloa's expulsion was demanded, was held in New Orleans. The Superior Council, acting upon the demands of the assembled populace, issued an order expelling the Spanish commandant, who, with his household, had retired to a ship lying at anchor in the river. During the night a band of insurgents carrying torches and flares cut the vessel loose from its mooring, and morning found the head of the government well on the way toward the Gulf of Mexico. Serious consideration was given a proposal to found a republic with a 'Protector' at its head, but fear of foreign intervention acted against the scheme.
For two years the Colony, the first in America to revolt against a European power, enjoyed freedom from foreign rule, but on July 24, 1769, the whole town was thrown into a tumult by news of the arrival at the mouth of the river of twenty-four Spanish men-of-war and twenty-six hundred soldiers under the command of Spain's most illustrious general, Count Alexander O'Reilly. No opposition was made upon the arrival of the flotilla in August, and O'Reilly took formal possession on August 18, replacing the French flag in the Place d'Armes with the flag of Spain. Shortly afterward, twelve leaders of the October revolt were imprisoned, six being executed for their participation in the bloodless rebellion.
Changes in government were made, and the French law was abolished and supplanted by the law in force in other Spanish colonies. The Executive Department consisted of a governor assisted by an intendant, auditor of war, auditor of the intendancy, comptroller, and various minor officials. Both civil and military powers were vested in the Governor, who appointed commandants in the same capacity for each parish or district. The Superior Council of the French régime was replaced by a legislative and quasi-administrative council called the Cabildo, which was composed of six perpetual regidors, two alcaldes, an attorney-general syndic, and a clerk. Its judicial function was limited to the jurisdiction of appeals from the alcaldes courts set up in New Orleans and the chief towns of the province. For lack of a legislative body, laws came either directly from Spain, the Captain-General of Cuba, the Audencia Habana (Cuban administrative council), or from the Governor himself, who, at the outset of his term, promulgated a list of laws in an inaugural address, the bando de buen gobierno. Centralization of power in the hands of a few officials, lack of a legislative body, and bureaucracy continued under Spanish rule to characterize the government of the Colony.
O'Reilly, before his departure in 1770, relieved the commerce of the Colony to some extent. Its trade had been confined, since Ulloa's administration, to six ports of Spain. Trade had also been forbidden with any but Spanish vessels owned and commanded by the King's subjects. Don Luis de Unzaga, Governor in 1772, tolerantly ignored the forbidden trade with the British, which had grown considerably, and without which the commerce of the Province would have suffered greatly. In 1774 the estimated value of Louisiana commerce was $600,000, of which only $15,000 passed through legitimate Spanish channels.
With the outbreak of the American Revolution, Spanish officials became involved, conniving with the revolting colonists in the war against England. American agents were permitted to establish bases in the city, through which they supplied the Atlantic colonies with munitions and supplies. Most active in this work was Oliver Pollock, a merchant granted freedom of trade in New Orleans and Louisiana in return for the shipload of flour he had placed at O'Reilly's disposal in 1769, when the Spanish general was hard pressed in supplying his troops with provisions. By advancing supplies and credit totaling $300,000 to the revolting colonists during the Revolution, Pollock played an important part in the success of the American cause.
Large numbers of French settlers and free Indians, who had refused to take the oath of allegiance to England after West Florida had been ceded to that country in 1763, moved to New Orleans or elsewhere in the vicinity. Under Don Bernardo de Galvez, son of the Viceroy of Spain and Governor of Louisiana, an expedition was permitted to be fitted out in New Orleans and sent against Fort Bute, an English settlement in the Manchac country. The fort was captured, and British territory as far north as Natchez was terrorized by the expedition.
As a result of these and other acts, Great Britain declared war against Spain in 1779, whereupon Galvez, with an army of militia, Indians, Negroes, and volunteers of every character, took advantage of the opportunity to make a series of successful raids against the enemy at Baton Rouge, Natchez, Manchac, Mobile, and Pensacola.
In 1788 the city was almost completely destroyed by a great fire. Tapers lighted in observances of Good Friday of that year ignited the curtains of the Nunez house on Chartres Street. Swept by a strong south wind, the conflagration spread through the town, consuming 856 houses and laying waste four-fifths of the city. While New Orleans was being rebuilt, most of the inhabitants were forced to seek refuge among the planters along the river.
The year 1794 was notable. The first newspaper in Louisiana, Le Moniteur de la Louisiane, appeared on the streets of New Orleans; Étienne de Boré, a sugar-cane planter, successfully granulated sugar; Governor Carondelet authorized construction of a canal from Bayou St. John to the city ramparts, and the new St. Louis Church, not yet a cathedral, was dedicated. A most disastrous occurrence, however, was a fire that razed 212 of the buildings erected after the Great Fire of 1788.