Britain held a dominant position at the negotiations, as they had during the last seven years of the war captured Canada, Guadeloupe, Martinique, Dominica, Pondicherry, Senegal, and Belle Île from the French and Havana and Manila from the Spanish. Only one British territory, Menorca, had fallen into French hands, and the Spanish had not captured a single inch of British soil. Despite suffering a year of defeats, Spain was prepared to continue the war— something which their French allies were opposed to. Bute proposed a suggestion that France cede her remaining North American territory of Louisiana to Spain to compensate Madrid for its losses during the war. This formula was acceptable to the Spanish government, and allowed Britain and France to negotiate with more legroom. Both Bourbon allies considered the treaty that ended the war as being closer to a temporary armistice rather than a genuine final settlement, and William Pitt described it as an "armed truce". Britain had customarily massively reduced the size of its armed forces during peacetime, but during the 1760s a large military establishment was maintained—intended as a deterrent against France and Spain.