By the late 1820s, Puerto Rico and Cuba had become Spain's only remaining colonies in the Americas and its major source of colonial returns. A decade later, however, the slave-based plantation system in Puerto Rico was beginning to show signs of stagnation due to the convergence of a number of domestic and international forces. In the late 1840s the Iberian colonial bureaucracy initiated a series of proposals to stimulate Puerto Rico's transformation into an agriculturally modern, diversified, free-labour economy. This initiative failed due to an adverse economic environment, administrative confusion and rivalries, and the failure of officials on the island to enlist the support either of local planters or those at the lower levels of society. This paper explores the reasons for this failure in detail.