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 The wealth which passed into the country had no steady and persistent reaction on industrial and agricultural life; and when the military exigencies of Philip's policy reduced him to bankruptcy, it became obvious to the world that the Spaniards had completely misused the unique opportunities which lay within their grasp. They had sacrificed everything else to the accumulation of treasure by the Crown, and they had completely failed to attain the one object on which they had concentrated all their efforts.

The permanent gain from the treasure imported into Europe went to those countries which were able to employ it as capital for industrial or agricultural improvement, and Spain could do neither. There was every prospect, at one time, that the greatest advantage would be reaped by Spanish subjects in the Netherlands. The policy of the government, however, and the failure of the Duke of Alva to recognise the importance of trading interests, rendered this impossible. The War in the Low Countries not only caused the migration of industry from that part of Spanish territory, but tended to bring about the collapse of the great capitalists who had allied themselves to the Spanish interest. The foreigners were being gradually excluded from taking any direct part in the new industrial developments in Spain; they confined themselves more and more to banking business, and to financial operations in the government service. But the persistent failure of the Spanish and imperial policy in one country after another had the effect of crippling several of the great Genoese and German houses, and at length drained the resources even of such millionaires as the Fuggers. The decline of these bankers proved that the control of the treasure of the New World was passing into other hands; as a matter of fact it was shifting more and more into the possession of the Dutch, who were making their country a harbour of refuge for persons expelled from the Spanish Netherlands, and who were building up a great centre of commercial and industrial life at Amsterdam. At the beginning of the seventeenth century the people of Holland had succeeded in winning the greater part of the gains which accrued from the Portuguese discoveries, vchile they had also succeeded in drawing to themselves a large share of the treasure of Spanish America, and in using it as capital in commerce, in shipping, and in industrial pursuits. It was the nemesis of the policy of his Catholic Majesty that his subjects failed to derive real advantage from the much vaunted American possessions, and that the gains which might have enriched the peninsula went to his bitterest enemies.

In the middle of the sixteenth century, England was not a competitor with Spain and France for the sovereignty of the world; her political ambition was far humbler; the dangers that threatened her were so imminent, and her means of defence so insufficient, that it was only by devoting great care to the development of her resources that she