were Spanish officers in Cuba who expressed "the conviction that the government of Madrid had the deliberate intention that the squadron be destroyed as soon as possible, in order to quickly reach peace". Although there was nothing exceptional about the defeat in the context of the time (Fachoda incident, 1890 British Ultimatum, First Italo-Ethiopian War, Greco-Turkish War (1897), Century of humiliation, Russo-Japanese War...among other examples) in Spain the result of the war caused a national trauma due to the affinity of peninsular Spaniards with Cuba, but only in the intellectual class (which will give rise to Regenerationism and the Generation of 98), because the majority of the population was illiterate and lived under the regime of caciquismo. The war greatly reduced the Spanish Empire. Spain had been declining as an imperial power since the early 19th century as a result of Napoleon's invasion. Spain retained only a handful of overseas holdings: Spanish West Africa (Spanish Sahara), Spanish Guinea, Spanish Morocco and the Canary Islands. With the loss of the Philippines, Spain's remaining Pacific possessions in the Caroline Islands and Mariana Islands became untenable and were sold to Germany in the German–Spanish Treaty (1899). The Spanish soldier Julio Cervera Baviera, who served in the Puerto Rican Campaign, published a pamphlet in which he blamed the natives of that colony for its occupation by the Americans, saying, "I have never seen such a servile, ungrateful country [i.e., Puerto Rico] ... In twenty-four hours, the people of Puerto Rico went from being fervently Spanish to enthusiastically American.... They humiliated themselves, giving in to the invader as the slave bows to the powerful lord." He was challenged to a duel by a group of young Puerto Ricans for writing this pamphlet. Culturally, a new wave called the Generation of '98 originated as a response to this trauma, marking a renaissance in Spanish culture. Economically, the war benefited Spain, because after the war large sums of capital held by Spaniards in Cuba and the United States were returned to the peninsula and invested in Spain. This massive flow of capital (equivalent to 25% of the gross domestic product of one year) helped to develop the large modern firms in Spain in the steel, chemical, financial, mechanical, textile, shipyard, and electrical power industries. However, the political consequences were serious. The defeat in the war began the weakening of the fragile political stability that had been established