of losing the army which had been committed to his charge, and ordered a precipitate retreat, to the great surprise of Valdivia, who was apprehensive of some stratagem, and did not venture upon attempting a pursuit.  When it was discovered that the enemy had actually retreated, the Spaniards considered their flight as a special favour from heaven, and some even alleged that they had seen the apostle St James, mounted on a white horse, waving a flaming sword and striking terror into their enemies.  But the only miracle on this occasion proceeded from the timid circumspection of Lincoyan.

Being now in some measure freed from the restraint imposed upon him by the Araucanians, Valdivia applied himself diligently to the building of the city of Conception, for which place he entertained a strong predilection, as he considered that it would become the centre of maritime communication between Chili and the ports of Peru and Spain.  Although he had fixed upon St Jago for the capital of the kingdom of Chili, he determined upon establishing his own family at Conception; for which purpose he selected a pleasant situation for his own dwelling, reserving for himself the fertile peninsula between the rivers Andalian and Biobio, and resolved to ask as a reward for his services the two adjoining districts of Arauco and Tucapel, with the title of marquis:  For, although these districts still remained in the possession of the Araucanians, he fully expected to be able to subjugate that valiant people in a short time.

Having speedily reared the new city, in which he established a colony of his followers, he employed the remainder of the year 1551 in regulating its internal policy; for which purpose, after having established a Cabildo or body of magistrates, in imitation of those in Spain, as usual in all the cities of Spanish America, he promulgated a body of fundamental regulations, comprised in forty-two articles or statutes, some of which respecting the treatment of the natives within its territory and jurisdiction evinced much prudent humanity; yet, as in all the other subjected countries of America, he left them in a great measure subject to the control and caprice of the citizens to whom they were allotted.

After the settlement of his new city, and having received a reinforcement of soldiers from Peru, he resolved to attack the Araucanians in their own territories, believing that their courage was now entirely subdued, as they had made no attempt to molest him since their late repulse under Lincoyan.  With these views, he passed the Biobio in 1552, and proceeding rapidly through the provinces of Encol and Puren, unopposed by the tardy and timid operations of Lincoyan, he arrived at the river Cauten, which divides the country of the Araucanians nearly into two equal parts.  Near the confluence of this river with the Damas, he founded a new city which he named Imperial[66], in honour of the Emperor Don Carlos; though some say