Two smiles from Madrid in 1974

The stretching bear looking for fruit on the tree is symbolic of the resiliency and strength of the industry of Madrileños. Originally, Madrid was named URSA, which means “bear” in Latin.
Bears populated many of Madrid’s forests where trees produced fruit that looked like strawberries, hence they were named “strawberry trees or the strawberry bush” (Madroño in Spanish). The fruit is popular in cake making. In the Italian Risorgimento, the strawberry tree, because of its autumnal colours, bore the same colours of the Italian flag. The red of the fruits, white flowers and green leaves, was therefore also considered a symbol of Italy.
The first mention of the national symbol of Madrid was back in 1212, at the battle of Las Navas de Tolosa, between Alfonso VIII of Castile and the Almohads. Hence the Council of Madrid sent a detachment in support of the Christian King. Back then, the troops carried a flag that showed a bear on a silver field with the seven stars of the Usra Menor on the body of the bear (meaning direction), just like the celestial star reference used for navigation (This was the first symbol of Madrid from 1212 – 1222).

Later in 1222, the clergymen of Madrilenian confronted the Council to allow animals to forage without disturbance in the fields and forests in the municipal jurisdiction. The clergymen recognised this as important to resources, slowly convincing the council of this too – but conflict between the two continued. Kind Alfonso VIII therefore decided that the animals would belong to the clergymen while the forests were bestowed to the municipality and both would share responsibility in the continuation of its progression. As a municipality possession, trees bearing delicious strawberry like red fruits were then added to the Coat of Arms to become their national symbol.
From the Wikipedia.