chy in comparison with the Araucanian state; which,
notwithstanding the vast disproportion, had hitherto been able to resist
every effort of the Spaniards. He acknowledged even the propriety of his
nation entering into negotiations for peace, but alleged that the
Spaniards affixed wrong ideas to that word; as, under the semblance of
peace, they sought to subject the Araucanians to their authority, which
they would never agree to while one of them remained alive. And finally,
that the only peace to which they would consent, must consist of an
entire cessation of hostilities, a complete restoration of all the lands
which were occupied by the Spaniards within the Araucanian territory,
and an explicit renunciation of every pretence to controul or interfere
with their independent rights.

As Loyola was of a generous disposition, he could not avoid admiring the
noble and enlightened sentiments of the barbarian ambassador, and
dismissed him with the strongest demonstrations of esteem. Yet so far
was he from any idea of abandoning the posts already established in the
Araucanian territory, that he crossed the Biobio in 1594, and founded a
new city at a short distance from that river, giving it the name of Coya
in honour of his wife a Peruvian princess. This place was intended to
protect the rich gold mines of Kilacoyan, and to serve as a place of
retreat for the inhabitants of Angol in case of need; and in order to
render it more secure, he constructed two castles in its immediate
neighbourhood, named Jesus and Chivecura, on either shore of the Biobio.
Solicitous to destroy this new settlement, which he considered as a
disgrace to his administration, Paillamachu sent in 1595, one of his
officers named Loncothequa, with orders to destroy the fort of Jesus.
After twice penetrating within the works, and even burning a part of the
interior buildings of this place, Loncothequa lost his life without
being able to accomplish the enterprise.

In 1596, the toqui made frequent incursions into all the Spanish
districts, both within and adjoining the Araucanian territory, on
purpose to subsist his troops and to inure them to a military life. The
Spanish army attempted in vain to prevent or pursue these predatory
detachments, as the wary Paillamachu took the utmost care to avoid any
encounter, determined to reserve his force for some favourable occasion.
On purpose to restrain these incursions Loyola erected two additional
forts in the neig