Sagasta's government entered office committed to employing autonomy to solve the Cuban problem. It hoped to rally moderate Cubans and attract sufficient numbers of insurgents so that the war would diminish and eventually end in a negotiated settlement. But success also depended on holding the support of both Spaniards and Americans. At home the government had to check patriotic nationalists who wanted to crush the insurrection; abroad it had to prevent U.S. intervention. As Spanish and American policies became more complementary, a limited accommodation developed between Madrid and Washington. But Cubans rejected autonomy, and many Spaniards and Americans continued to doubt Madrid's ability to restore peace to the island.
On the peninsula Sagasta could count on the financial community and some business elements to support his efforts. Bankers and merchants worried about the Cuban debt of $400 million, the growing national indebtedness, and the financial ruin of waging a futile conflict against the United States. They hoped a Cuban settlement would provide a means of refinancing the enormous debt. But any solution that expanded Cuban trade with the United States would adversely affect Spanish producers and shippers of textiles and wheat.