At the first conference, the governor proposed his plan to the Araucanians under every aspect that he thought might render it acceptable and agreeable. In pursuance of their previous agreement, the Araucanians objected, equivocated, and at length appeared to consent, but ended by requesting the necessary assistance for beginning the work. Accordingly, having pointed out the situations which he thought most eligible for the new cities, the governor sent them a great quantity of wrought iron, together with provisions for the labourers, and cattle for transporting the timber. As the work made no progress, the quarter-master Cabrito repaired to the frontiers with several companies of soldiers, to stimulate the tardy operations, and placed for this purpose superintendents in different quarters. The serjeant-major Rivera, was entrusted with the building of Nininco, and Captain Bargoa with that of another city on the banks of the Biobio, while Cabrito directed all the operations from his head-quarters at Angol.

Finding all their acts of equivocation and delay ineffectual, the Araucanians flew to arms, and having united to the number of five hundred men under the toqui Curignancu, they proceeded to besiege Cabrito in his camp. Burgoa, who had been made prisoner and very roughly treated, was set at liberty in consequence of being represented as inimical to the quarter-master. Rivera crossed the Biobio in sight of the enemy who were seeking to slay him, but he got away in safety under the protection of a missionary, and afterwards returned with four hundred men to relieve Cabrito. Another missionary requested the Araucanian officer who escorted him, to forgive a Spaniard by whom he had been grievously offended: The Araucanian answered that he had nothing to fear while in company with the missionary; and that it was now no time to think of revenging private injuries. Such was the attention paid to the sanctity of the missionaries, that not a single Spaniard was slain who had the good fortune of getting under their protection.

In order to attack the Araucanians in several places at once, the governor formed an alliance with the Pehuenches, who inhabit the western slopes of the Andes between the latitudes of 33° 30' and 36° S. and between the heads of the rivers Maypo and Chillan. They accordingly sent an army through the defiles of the mountains to invade Araucania: But Curignancu, being informed of their approach, fell upon them by surprise while descending from the Andes and completely routed them, taking their general Coligura and his son, both of whom he put to death. Though this event might have been supposed calculated to occasion eternal enmity between the Pehuenches and Araucanians, it yet so effectually reconciled them, that the Pehuenches have been ever since faithful allies to the Araucanians, and implacable enemies to the Spaniards. Even in this war, Curignancu availed himself of the assistance of these mountaineers to harass the Spanish possessions in the neighbourhood of St Jago. Since that time, the Pehuenches frequently attack the Spanish caravans between Buenos Ayres and Chili, and almost every year furnishes some melancholy events of that kind.

The mortification of seeing his grand project completely overthrown preyed on the mind of Gonzago, already afflicted by a severe chronic illness, which was so much aggravated by this disappointment as to cut him off in the second year of the war; and Don Francisco Xavier de Morales was appointed his successor by the viceroy of Peru. As formerly concerted, the neutral provinces of Araucania now declared in favour of those who had first begun hostilities, and the war was prosecuted with vigour by the whole confederacy. Curignancu and his brave vice-toqui Leviantu, kept the Spanish troops in constant motion and alarm, though reinforced by several divisions from Spain. Having no materials for giving an account of the events of this war, it can only be mentioned that a bloody battle was fought in the beginning of the, year 1773, by which period the expences of the war had exceeded 1,700,000 dollars. In the same year an accommodation was agreed upon, and Curignancu was invested by the Butacayog with full powers to settle the articles of peace. He required as a preliminary, that the conferences should be held in the city of St Jago, which was conceded by the Spanish governor though contrary to the usual custom. During the negociations in that city, he made another demand still more extraordinary, "That his nation should be allowed to keep a resident agent in the capital of Chili." This was warmly opposed by the Spanish officers; but the governor thought proper to grant this likewise, as an excellent expedient for readily adjusting any differences that might arise between the two nations. The other articles of the peace were adjusted with all manner of facility, as the treaties of Quillan and Negrete were revived by mutual consent.

On the death of Gonzago being known in Spain, Don Augustino Jauregui was sent out to assume the government of Chili, who has since filled the important office of viceroy of Peru with universal approbation. He was succeeded by Don Ambrosio Benarides, who rendered the country happy by his wise and beneficent administration. "On the 21st of November 1787, Don Ambrosio Higgins a native of Ireland, formerly brigadier-general of the cavalry in Chili, was appointed president, governor, and captain-general of the kingdom, a gentleman of an enlightened mind and excellent disposition, who has gained the love and esteem of all the inhabitants. In 1792 he continued to discharge the duties of his high station with all the vigilance and fidelity which belong to his estimable character, and which are required in so important, a situation. On his first accession to the government, he visited all the northern provinces, for the purpose of dispensing justice, encouraging agriculture, opening the mines, and improving the commerce and fisheries of the kingdom. He has also established schools, repaired the roads throughout the country, and has built several new cities101."

From the short deduction of the occurrences in Chili since its discovery, which has been attempted in the foregoing pages, it will be seen that the acquisition and maintenance of that interesting and important colony has cost more expenditure of blood and treasure to Spain than all the rest of her American possessions. The Araucanians, though only occupying a small extent of territory, and with far inferior arms, have not only been able to resist the military power of Spain, till then reckoned invincible, but have endangered the loss of her best established possessions. Though most of the Spanish officers employed in the early period of the Araucanian war had been bred in the low countries, that excellent school of military knowledge, and her soldiers were armed with those destructive weapons before which the most extensive empires of America had so early fallen, and were considered as the best disciplined and bravest troops in the world; yet has this brave people been able to resist their utmost efforts, and still maintain their independence unimpaired. This will appear wonderful, especially when we consider the decided superiority which European military discipline and skill have given to its troops in all parts of the world. The rapidity of the Spanish conquests in America excited universal astonishment; and a small number of Portuguese gained with almost incredible facility an extensive territory in the east, even although the natives were extremely numerous and accustomed to the use of fire-arms. Yet, in spite of every effort of force and skill, the Araucanians have valiantly defended their country, evincing that a free people, however inconsiderable in point of numbers, can perform wonders.