1.7 Rivals on the World Stage

After Columbus's voyage, Spain and Portugal argued over who owned newly found lands. In 1493 Pope Alexander VI drew a line in the Atlantic, and in the Treaty of Tordesillas (1494) the two kingdoms moved it to 370 leagues west of the Cape Verde Islands. Lands to the west went to Spain and lands to the east to Portugal. That's why Brazil, which bulges east of the line, became Portuguese. Other European states ignored the treaty.

Conquistadors were Spanish soldier-adventurers who conquered American empires. Hernán Cortés defeated the Aztec (Mexica) Empire, taking its capital Tenochtitlan in 1521, with help from Indigenous allies who resented Aztec rule and from a smallpox epidemic. Francisco Pizarro captured the Inca ruler Atahualpa in 1532 and had him executed in 1533.

In 1545 the Spanish found a huge silver mountain at Potosí, in today's Bolivia, and soon more silver in Mexico. Indigenous workers were forced to mine it through the mita, a labor draft taken over from the Inca. Treasure fleets carried silver to Seville, and Manila galleons carried it across the Pacific to trade for Chinese silk and porcelain.

Silver paid for Spain's armies, so Charles V and Philip II could fight Protestants, the Ottomans and France. But Spain spent more than it earned; the crown defaulted on its debts several times, starting in 1557. The silver also flowed out of Spain to pay foreign bankers and suppliers, and it fed inflation across Europe (see 1.10).

Portugal used its navy to seize key ports on the trade routes of the Indian Ocean rather than conquer large territories in Asia. From 1580 to 1640 Spain's king also ruled Portugal, which made Portuguese posts a target for Spain's enemies, especially the Dutch.

A joint-stock company sold shares to many investors to fund risky voyages, sharing the profits and losses. States gave these companies charters granting trade monopolies and even the right to wage war.

England chartered the East India Company in 1600, and the Dutch formed the Dutch East India Company (VOC) in 1602. The VOC drove the Portuguese out of much of the spice trade, founded Batavia (today's Jakarta) in 1619 and took Malacca in 1641. England founded Jamestown (1607) and sugar colonies in the Caribbean such as Barbados. France founded Quebec in 1608 and built a fur-trading empire in North America.

English and Dutch privateers, private ships licensed to attack enemy shipping, raided Spanish treasure fleets. England's defeat of the Spanish Armada in 1588 showed Spain could be beaten at sea. Later, rivalry between the Dutch and English produced three Anglo-Dutch Wars (1652–1674).