Cuba rebelled against Spain in the Ten Years' War beginning in 1868, resulting in the abolition of slavery in Spain's colonies in the New World. American interests in the island, coupled with concerns for the people of Cuba, aggravated relations between the two countries. The explosion of the USS Maine launched the Spanish-American War in 1898, in which Spain fared disastrously. Cuba gained its independence and Spain lost its remaining New World colony, Puerto Rico, which together with Guam and the Philippines were ceded to the United States for 20 million dollars. In 1899, Spain sold its remaining Pacific islands the Northern Mariana Islands, Caroline Islands and Palau-to Germany and Spanish colonial possessions were reduced to Spanish Morocco, Spanish Sahara and Spanish Guinea, all in Africa.
The "disaster" of 1898 created the Generation of '98, a group of statesmen and intellectuals who demanded liberal change from the new government. However both Anarchism on the left and fascism on the right grew rapidly in Spain in the early 20th century. A revolt in 1909 in Catalonia was bloodily suppressed. Jensen (1999) argues that the defeat of 1898 led many military officers to abandon the liberalism that had been strong in the officer corps and turn to the right. They interpreted the American victory in 1898 as well as the Japanese victory against Russia in 1905 as proof of the superior value of willpower and moral values over technology. Over the next three decades, Jensen argues, these values shaped the outlook of Francisco Franco and other Falangists.
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