Vasco Fernandez de Coutinho began to settle Espirito Santo in the same year (1531) in which the former colonies had been begun. He had amassed a great fortune in the East, and expended most of it in collecting volunteers for his new colony; sixty fidalgoes and men of the royal household accompanied him. The adventurers had a prosperous voyage. On their arrival they built a fort, which they called N. S. da Victoria, and established four sugar-works. Coutinho returned to Lisbon for recruits and implements for mining, the settlers having now obtained some indications of gold and jewels to be found in the country.

The adjoining captaincy of Porto Seguro was given to Pedro de Campo Tourinho, a nobleman and a navigator. He sold his possessions at home, and raised a large body of colonists, with which he established himself at Porto Seguro, the harbour where Cabral had first taken possession of Brazil. The history of the settlement of Porto Seguro, like that of all the others, is stained with the most atrocious cruelties; not such as soldiers in the heat of war commit, but cold calculated cruelties, exterminating men for the sake of growing canes, so waiting patiently for the fruit of crime.[7]

Ilheos, so called from its principal river, which has three islands at the mouth, was settled by Jorge de Figueredo Correa, who had a place in the treasury, under Joam III., between 1531 and 1540, and speedily became flourishing, being remarkably favourable to the sugar cultivation.

Bahia de Todo os Santos was, with its adjacent territory, given to Francisco Pereira Coutinho, a fidalgo who had made himself a name in India. He fixed his abode at Villa Velha, where Caramuru had formed his little settlement, and two of his followers married the daughters of Caramuru.

The bay, or reconcave of All Saints, is a magnificent harbour: the entrance appears to be a league in breadth; but on the right hand, on entering, there is a shoal dangerous to large vessels, called that of St. Antonio da Barre; and on the left, coral reefs running off from Itaporica. The country that surrounds it is so fertile, that it must always have been an object of desire whether to savage or civilised inhabitants; and it is not surprising that three revolutions, that is, three changes of indwellers, driven out by each other, should have been, in the memory of the Indians, before the settlement of Coutinho.

That nobleman, whose early life had been passed in the East-Indian Portuguese wars, imprudently and cruelly disturbed the peace of the rising settlement, by the murder of a son of one of the chiefs. The consequence was, that after a most disastrous warfare, in the course of which the already flourishing sugar-works were burnt, he and Caramuru were both obliged to abandon the settlement and retire to Ilheos. Soon afterwards, however, he made peace with the Indians; but on his return to the Reconcave, he was wrecked on the reef off Itaporica, where the natives murdered him, but spared Caramuru, who returned to his old dwelling.

In the settlement of Pernambuco, the first donatory, Duarte Coelho Pereira, was opposed not only by the natives, but by numbers of French, who having carried on a desultory though profitable trade on the coast, now joined the Indians in retarding those regular settlements which were likely to put an end to their commerce. The colony, however, had been planted at Olinda,[8] a situation as strong as it is beautiful, and Pereira contrived to engage some of the Indian tribes in his favour. The war was but of short continuance, and nothing farther, except the seizure of the little settlement of Garussa, in the woods and near the creek which separates Itameraca from the main land, occurred to impede the prosperity of the captaincy.

The last colony which was founded during these ten eventful years was that of Maranham. Three adventurers undertook this settlement jointly. The most celebrated was Joam de Barros, the historian; the others were Fernam Alvares de Andrada, father of the writer of the Chronicle, and Aires da Cunha.

Aires da Cunha, Barros's two sons, and nine hundred men, sailed in ten ships for their new possession, but were wrecked on the shoals of Maranham; so that it was long before any success attended the undertaking. Da Cunha was drowned, the sons of Barros slain by the Indians, and the rest of the people with difficulty survived in a very wretched condition.

Meantime the passage through Magellan's Straits had been discovered, and the Spaniards, first under Sebastian Cabot, and afterwards under Don Pedro de Mendoza, who founded Buenos Ayres, had begun to settle on the shores of the Plata, not without opposition from the Portuguese, and a more obstinate and fatal resistance from the Indians. The tribes in this neighbourhood appear to have been more civilised than those of the coast of Brazil, and consequently more formidable enemies to the rising towns. Orellana had also made his daring voyage down the mighty river that is sometimes called by his name. He had afterwards perished in an attempt to make a settlement on its shores, and nearly the same fate had attended Luiz de Mello da Silva, who made a similar attempt on the part of Portugal.