Loss of the Naval Power of Spain and Portugal.—The seizure of Portugal by Philip II. in 1580 was disastrous in its consequences to both Portugal and Spain. For Portugal it was humiliation and loss of colonial power. Spain was unequal to the task of defending the Portuguese possessions, and her jealousy of their prosperity seems to have caused her deliberately to neglect their interests and permit their decline. In one day Portugal lost possession of that splendid and daring navy which had first found a way to the Indies. Several hundred Portuguese ships, thousands of guns, and large sums of money were appropriated by Spain upon the annexation of Portugal.[1] Most of these ill-fated ships went down in the English Channel with the Great Armada.

When the terrible news of the destruction of this powerful armament, on which rested Spanish hopes for the conquest and humiliation of England, was brought to the Escorial, the magnificent palace where the years of the king were passed, Philip II., that strange man, whose countenance never changed at tidings of either defeat or victory, is reported to have simply said, “I thank God that I have the power to replace the loss.” He was fatuously mistaken. The loss could never be made good. The navies of Spain and Portugal were never fully rebuilt. In that year (1588), preëminence on the sea passed to the English and the Dutch.

The Netherlands Become an Independent Country.—Who were these Dutch, or Hollanders? How came they to wrest from Spain and Portugal a colonial empire, which they hold to-day without loss of prosperity or evidence of decline? In the north of Europe, facing the North Sea, is a low, rich land, intersected by rivers and washed far into its interior by the tides, known as Holland, the Low Countries, or the Netherlands. Its people have ever been famed for their industry and hardihood. In manufacture and trade in the latter Middle Age, they stood far in the lead in northern Europe, Their towns and cities were the thriftiest, most prosperous, and most cleanly.

We have already explained the curious facts of succession by which these countries became a possession of the Spanish king, Emperor Charles the Fifth. The Low Countries were always greatly prized by Charles, and in spite of the severities of his rule he held their affection and loyalty until his death. It was in the city of Antwerp that he formally abdicated in favor of his son, Philip II., and, as described by contemporary historians, this solemn and imposing ceremony was witnessed with every mark of loyalty by the assembly.

The Rebellion.—But the oppressions and persecutions of Philip’s reign drove the people to rebellion. The Netherlands had embraced the Protestant religion, and when, in addition to plunder, intimidation, the quartering of Spanish soldiery, and the violation of sovereign promises, Philip imposed that terrible and merciless institution, the Spanish Inquisition, the Low Countries faced the tyrant in a passion of rebellion.

War, begun in 1556, dragged on for years. There was pitiless cruelty, and the sacking of cities was accompanied by fearful butchery. In 1575 the seven Dutch counties declared their independence, and formed the republic of the Netherlands. Although the efforts of Spain to reconquer the territory continued until the end of the century, practical independence was gained some years before.

Trade between Portugal and the Netherlands Forbidden.—A large portion of the commerce of the Low Countries had been with Lisbon. The Portuguese did not distribute to Europe the products which their navies brought from the Indies. Foreign merchants purchased in Lisbon and carried these wares to other lands, and to a very large degree this service had been performed by the Dutch. But on the annexation of Portugal, Philip forbade all commerce and trade between the two countries. By this act the Dutch, deprived of their Lisbon trade, had to face the alternative of commercial ruin or the gaining of those Eastern products for themselves. They chose the latter course with all its risks. It was soon made possible by the destruction of the Armada.

The Dutch Expeditions to the Indies.—In 1595 their first expedition, led by one Cornelius Houtman, who had sailed in Portuguese galleons, rounded the Cape of Good Hope and entered the Indian domain. The objective point was Java, where an alliance was formed with the native princes and a cargo of pepper secured. Two things were shown by the safe return of this fleet,—the great wealth and profit of the Indian trade, and the inability of Spain and Portugal to maintain their monopoly.

In 1598 the merchants of Amsterdam defeated a combined Spanish and Portuguese fleet in the East, and trading settlements were secured in Java and Johore. In 1605 they carried their factories to Amboina and Tidor.

Effect of the Success of the Dutch.—The exclusive monopoly over the waters of the Pacific and Indian Oceans, which Portugal and Spain had maintained for a century, was broken. With the concurrence of the Roman See, they had tried to divide the New World and the Orient between them. That effort was now passed. They had claimed the right to exclude from the vast oceans they had discovered the vessels of every other nation but their own.