Provinces. That very year the famous Don Sebastian, King of Portugal, either fell or disappeared during an expedition against the Moors. He vanished without leaving any children, and Philip II of Spain obtained the Portuguese crown. Philip was a spiteful man. He thought to punish the Dutch for their revolt, by excluding them from his dominions. This policy proved most suicidal. The Dutch, instead of being good customers, became formidable rivals; instead of purchasing Indian commodities in the Lisbon market, they pushed on bravely to the Indian seas, and soon became ruinous competitors with Philip's Portuguese subjects for the Indian trade. They commenced with caution. They did not attempt to interfere with the Portuguese trade on the coasts of the Indian continent, but they directed their attention to that portion of the Malay Archipelago, which is known by the name of Spice Islands. In 1600 they had already erected a factory at Bantam in Java, and commenced a trade with the large island of Sumatra and the small Spice Islands. Subsequently, the factory in Java, swelled out into the great but unhealthy city of Batavia; which henceforth became the seat of the Dutch Government in the East, and the centre of their trade. Meantime the power of the Portuguese declined. The annexation to Spain proved their ruin. They received no further reinforcements from Europe, and their more enterprising rivals soon began to establish factories on the continent. In 1610 the Dutch erected the fort at Pulicat, about twenty three miles to the northward
