In 1581 Philip II. of Spain succeeded in establishing himself on the throne of Portugal as the successor of the rash Sebastian, dead fighting the Moors at Alcacer-Kebir. The decadent and demoralised Portuguese nation made hardly the semblance of a struggle for its independence. The very ease with which Philip obtained the kingdom left him no pretext for depriving it of administrative independence. Native Portuguese continued to hold office in the colonies and to enjoy a monopoly of Brazilian commerce. Internally, therefore, the change did not much affect Brazil. But in foreign relations the effect was profound. Brazil became a part of a well-nigh universal monarchy, and one of the battle-fields of the struggle which had begun between Spain and the Protestant powers.

All South America was now under the same monarch; boundary questions between Portuguese and Spanish America apparently ceased to have any importance. The enormous extension of Brazil toward the interior over territory formerly conceded to be Spanish occurred during the sixty years of Spanish domination. The Spanish monarch did not have time to spend on Brazilian matters, and the colonists were less interfered with from Lisbon and Madrid than might have been expected. Portuguese historians have much exaggerated the evil effects of the English, Dutch, and French half filibustering, half-trading descents on the coast, which occurred during this period. The pillage of a few towns was more than compensated by the commerce that sprang up; much Brazilian sugar escaped paying the heavy export duties; settlement extended rapidly over new territory, and the importation of negroes continued.

As early as 1575 a settlement had been made in Sergipe, but the great expansion over northern Brazil began under the rule of Philip's first governor-general. In 1583 he sent troops to take possession of the important port of Parahyba, where some French traders had obtained a foothold that prevented the inhabitants of Pernambuco from spreading north beyond Itamarica. The Spanish mercenaries were at first successful, but they could not stifle the serious Indian war which broke out. The Pernambucanos had better success, because they knew how to take advantage of the dissensions among the savages. Fortifying a town at Parahyba, they permanently established their sugar plantations in its neighbourhood, and then these indefatigable and land-hungry Creoles pushed on farther to the north. In 1597 Jeronymo de Albuquerque, the greatest of Brazilian colonial generals, attacked and defeated the powerful Pitagoares Indians, and established the colony of Natal, the nucleus of the present state of Rio Grande do Norte. This brought the Pernambucanos to Cape St. Roque. To the south they had spread as far as the San Francisco River, there meeting the Bahianos who, by 1589, had taken possession of the present state of Sergipe.

North of St. Roque the Portuguese so far had done nothing except make some desultory voyages of observation, though they claimed the coast to and beyond the mouth of the Amazon. The donatories of the captaincies in that region had not succeeded in establishing any settlements. In 1541, Orellana, one of those recklessly heroic Spaniards who had helped Pizarro conquer the empire of the Incas, was a member of an expedition which crossed the Andes near Quito and descended into the forested plains, looking for another Peru—the fabled El Dorado. They finally found themselves on a great river flowing to the east, and, since their provisions were exhausted, boats were built and Orellana was sent on ahead to try to find supplies. He could not find enough to feed the main body and decided to float on down the river, well knowing it must finally bring him to the ocean. After a voyage of more than three thousand miles he came to the great estuary of the Amazon and thence made his way to Spain. No important results followed this wonderful discovery. Orellana himself shortly returned to the mouth of the river, but he could not find his way up the labyrinth of waters.

To reach the plains from the Pacific or Caribbean settlements is nearly impracticable, and the Amazon valley remained unsettled. Meanwhile the seed planted by old Duarte Coelho germinated and grew into a vigorous tree whose branches were spreading out over all North Brazil. The seventeenth century had hardly begun when the hardy Pernambucanos invaded the country lying north and west of St. Roque, hunting Indian slaves, and good places for cattle- and sugar-raising. In 1603 Pero Coelho, an adventurous Brazilian then living at Parahyba, made a settlement far to the north-west of Natal, on the coast of CearÁ, and penetrated eight hundred miles from Pernambuco. Unreasonable aggressions against the Indians brought on temporary reverses, but the Pernambucanos persevered, and the Jesuits also established missions. By 1610 the region was pretty well under white control, the Indians being incorporated to a greater extent than was usual in the settlements farther south.

The next forward movement was precipitated by a formidable French attempt to colonise MaranhÃo. Daniel de la RivardiÈre, a Huguenot nobleman, conceived the idea of carrying out on the north coast Coligny's plan of a French Protestant colony. In 1612 he landed on the island of MaranhÃo with a large and well-appointed expedition.

Jeronymo de Albuquerque fortunately happened to be on the north coast when news came of this alarming intrusion. Sending his ships on to ascertain the truth of the report, he hastened overland to Pernambuco to get a force together. With three hundred whites and two hundred Indians he started to expel the French. An assault on a fort defended with artillery was out of the question, so in his turn he fortified himself, cut off the French from access to the sea, and ambushed their foraging expeditions. In such a game, his men, inured to the climate, had an immense advantage. Forced to assault Albuquerque's position, the French were repulsed. They begged for a truce, and went home at the end of a year. Albuquerque took possession of the French town, and in 1616 secured all the rest of the northern coast to Portugal by founding ParÁ, just to the south of the mouth of the Amazon. Several settlements were made along the coast east of ParÁ and also west in the estuary itself. The Indians proved docile and were easily incorporated to so great an extent that the Indian element is more predominant in ParÁ than in any other state on the Brazilian littoral.

On the island and around the bay of MaranhÃo a prosperous colony grew up. Certain enterprising business men made a contract with the government and started a regular propaganda for immigrants, and induced a large number to come from the Azores. The state thus founded was one of the most prosperous in Brazil, and was especially celebrated for the politeness and cultivation of its inhabitants. Some of the greatest names in Portuguese literature are those of Maranhenses. It is commonly said that the best Portuguese is spoken in MaranhÃo, and not in Lisbon, Rio, or Porto—just as the English of Dublin, Aberdeen, or Boston is considered better than that of London or New York, and the Spanish of Lima and BogotÁ better than that of Madrid, Barcelona, or Buenos Aires.

Meanwhile population and wealth had been increasing satisfactorily in the older provinces south of Cape St. Roque. By 1626 Pernambuco and Bahia had grown to be towns of something like ten thousand inhabitants, and the people of the respective provinces numbered about a hundred thousand. Ilheos, Porto Seguro, and Espirito Santo had made no progress, but Rio had become a city of six thousand, while the shores of her bay and the adjacent coast were now fairly settled. Rio and Santos really performed the function of ports for the foreign commerce of Paraguay and the Argentine because the Spanish laws did not permit these colonies to have ports of their own. Campos was now settled and its sugar industry was prospering. On the SÃo Paulo plains the Paulistas had spread to the north-east to the headwaters of the Parahyba and borders of the present state of Rio, and north-west down the navigable TietÉ, along which they found an easy track for their expeditions in search of slaves. The Jesuits had long since been unable to control or check the Paulistas, and had abandoned the missions near the coast. In the remote interior, along the ParanÁ and its great tributaries, the defeated priests thought that they would be safe, and about the end of the sixteenth century they entered that region by way of Paraguay. The Paulistas recked little of the government, especially now that the king was Spanish, and, advancing the claim that Spanish Jesuits had established missions on Portuguese territory, they proceeded to wipe out the new missions.

It seems incredible that their little bands could have penetrated such distances and accomplished such results, but it is on record that they tracked nearly to the Andes, and practically exterminated, the aboriginal population of half Brazil. The Jesuits tell us that between 1614 and 1639 four hundred Paulistas with two thousand Indian allies captured and killed three hundred thousand natives. In 1632 they utterly destroyed the great Jesuit settlements on the Upper ParanÁ, though this involved an expedition of fifteen hundred miles, much of which is to this day rarely penetrable. One of their expeditions was like an ambulating village—women, children, and domestic animals accompanying it. They sometimes were obliged to stop, sow a crop, and wait for it to mature before they could proceed. For the time being, these predatory Paulistas almost reverted to the nomadic stage.

Naturally, no complete record of these expeditions survives. Their members were not literate men, and it is only when they fought the Jesuits, or when they discovered minerals, that a record of their routes has been preserved. We know that before 1632 they had traversed all of southern Brazil, and Paraguay, and even eastern Argentina and Uruguay. Incursions to the north and west followed shortly. There is an authentic record of an expedition reaching Goyaz as early as 1647, and it is probable that by that time they had penetrated the central plateau which stretches across to the Andes, had seen the headwaters of the southern tributaries of the Amazon, and had followed the eastern mountain chain almost to the northern ocean. The Paulistas secured to their country and their race more than a million square miles of fertile and salubrious territory.