A naval arms race among Argentina, Brazil and Chile—the most powerful and wealthy countries in South America—began in the early twentieth century when the Brazilian government ordered three "dreadnoughts", formidable battleships whose capabilities far outstripped older vessels in the world's navies.
In 1904, the Brazilian Navy found itself well behind its Argentine and Chilean rivals in quality and total tonnage; few ships had been ordered since the fall of the Brazilian monarchy in 1889, while Argentina and Chile had just concluded a fifteen-year naval arms race which filled their navies with modern warships. Rising demand for coffee and rubber was fueling a large increase in the Brazilian government's revenue, and the country's legislature voted to devote some of the proceeds to address this naval imbalance. They believed that building a strong navy would play an essential role in remaking the country into an international power.
The Brazilian government ordered three small battleships from the United Kingdom in late 1905, but the appearance of the revolutionary British warship HMS Dreadnought in 1906 quickly scrapped these plans. Instead, the Brazilians ordered three Minas Geraes-class dreadnoughts—a warship type which quickly became a measure of international prestige, similar to nuclear weapons today. This action focused the world's attention on the newly ascendant country: newspapers and politicians in the great powers fretted that Brazil would sell the ships to a belligerent nation, while the Argentine and Chilean governments immediately canceled their naval-limiting pact and ordered two dreadnoughts each (the Rivadavia and Almirante Latorre classes, respectively).
Meanwhile, Brazil's third dreadnought faced a good deal of political opposition after an economic downturn and a naval revolt: the crews of both of their brand-new battleships, along with several smaller warships, mutinied and threatened to fire on Rio de Janeiro if there was no end to what they called the "slavery" being practiced by the Brazilian Navy. Despite these pressures, Armstrong successfully held the Brazilians to their contractual obligations. Construction on the new ship, preliminarily named Rio de Janeiro, was halted several times due to repeated design changes. Brazil's coffee and rubber booms collapsed soon after. Concerned that their ship would be outclassed by larger super-dreadnoughts, they sold the incomplete vessel to the Ottoman Empire in December 1913.