Peace negotiations had begun in April 1782, and had continued through the summer.

Representing the United States are Benjamin Franklin, John Jay, Henry Laurens, and John Adams.

David Hartley and Richard Oswald represent Great Britain.

The French Foreign Minister Vergennes had proposed in September, 1782, that is strongly opposed by his ally the United States.

France is exhausted by the war, and everyone wants peace except Spain, which insists on continuing the war until it can capture Gibraltar from the British.

Vergennes had come up with the deal that Spain will accept instead of Gibraltar.

The United States will gain its independence but be confined to the area east of the Appalachian Mountains.

Britain will take the area north of the Ohio River.

In the area south of that will be set up an independent Indian state under Spanish control.

It will be an Indian barrier state.

John Jay promptly tells the British that he is willing to negotiate directly with them, cutting off France and Spain.

The British Prime Minister Lord Shelburne agrees.

He is in full charge of the British negotiations (some of which take place in his study at Lansdowne House, today a bar in the Lansdowne Club) and he now sees a chance to split the United States away from France and make the new country a valuable economic partner.

Serious negotiations begin between Britain, France and Spain (for which Britain's chief negotiator is Alleyne Fitzherbert, and Spain's the Count of Aranda) over the next few weeks.

Although a French naval expedition had destroyed British trading posts in Hudson Bay during the summer, no territory had actually been captured.

From time to time, news arrives from India of continuing stalemate, both in the land wars (which involve the French only as supporters to local rulers) and in naval battles; the British still appear to hold all the French territory there that they had captured in 1778–79, while the French hold no British territory.

In the West Indies, on the other hand, the French still hold all the territory they had captured, while the British hold only one French island, St. Lucia.

The Spanish hold West Florida, the Bahamas and Menorca, and they are still maintaining an increasingly futile siege of Gibraltar.

An attempt to exchange Puerto Rico for Gibraltar collapses, probably because it would have brought too much competition for Jamaican products into the protected British market.

France and Britain, in the preliminary treaties signed with France and Spain on January 20, 1783, return to each other nearly all the territories they had taken from each other since 1778, except for Tobago, which the French had captured in 1781 and are allowed to keep.

France also gains some territory around the Senegal River in Africa, which it had lost to Britain in 1763.

The whole arrangement for fishing around the Newfoundland coast has to be renegotiated because of the rights awarded to the Americans.

The Spanish do much better.

They do not have to hand back West Florida or Menorca, and are also given East Florida in exchange for the Bahamas (so tens of thousands of refugees who had fled to East Florida from the United States will have to move again).

Both East Florida and part of West Florida had been Spanish possessions before 1763, so the 1783 treaty does not specify boundaries, allowing the Spanish to claim that the 1763 boundaries still apply (the remainder of West Florida had been part of French Louisiana before 1763, and the rest of Louisiana had then been handed over to Spain).

The opportunity is taken to resolve long-standing disputes about logwood cutting in Central America.

The British, however, continue to hold Gibraltar after the siege is abandoned.

France is an ally of both the United States and Spain, but Spain was not an ally of the United States, though an informal alliance had existed since at least 1776 between the Americans and Bernardo de Gálvez, Spanish governor of Louisiana, one of the most successful leaders in the war.

Spain's economy depends almost entirely on its colonial empire in the Americas, and a successful revolt by subjects of another colonial empire could set a ruinous example.

In fact, there had been a series of three rebellions by native South Americans against Spain between 1777 and 1781, led by Tomás Katari, Tupac Amaru II, and Julian Apasa (who adopted the name Tupac Katari)—all had been crushed with utter ruthlessness.

With such considerations in mind, Spain had continually thwarted John Jay's attempts to establish diplomatic relations during his long assignments in Madrid, and is the last participant in the American Revolutionary War to acknowledge the independence of the United States, a fortnight after the preliminary peace treaty with Britain, on February 3, 1783.

The Dutch had never captured anything from the British, and only French military action had saved them from losing virtually all their colonies.

They can exercise no leverage over Britain, Spain, France or the United States in the peace negotiations, and do not make a preliminary treaty until September 2, 1783, the day before the other three treaties are formalized.

Britain agrees to return nearly all Dutch possessions captured in the East Indies (the most important of which, Trincomalee on Ceylon, had already been retaken by the French anyway) but keep Negapatnam on the Indian coast, and secure other concessions.

The terms of the peace, particularly the proposed treaty with the United States, had caused a political storm in Britain.

The concession of the Northwest Territory and the Newfoundland fisheries, and especially the apparent abandonment of Loyalists by an Article which the individual States would inevitably ignore, had been condemned in Parliament.

The last point had been the easiest solved—British tax revenue saved by not continuing the war will be used to compensate Loyalists.

Nevertheless, on February 17, 1783 and again on February 21, motions against the treaty had been successful in Parliament, so on February 24 Lord Shelburne had resigned, and for five weeks the British government had been without a leader.

Finally, a solution similar to the previous year's choice of Lord Rockingham had been found.

The government was to be led, nominally, by the Duke of Portland, while the two Secretaries of State were to be Charles Fox and, remarkably, Lord North.

Richard Oswald had been replaced by a new negotiator, David Hartley, but the Americans have refused to allow any modifications to the treaty—partly because they would have to be approved by Congress, which, with two Atlantic crossings, would take several months.

Therefore, on September 3, 1783, at Hartley's hotel in Paris, the treaty as agreed by Richard Oswald the previous November is formally signed, and ...

...at Versailles the separate treaties with France and Spain are also formalized.