Juan de Ayolas was now left in command of the Spanish force. He was an able commander, and a man of determined character, eminently fitted to conduct an expedition such as this. Without hesitation, the new leader purposed to make his way farther up the stream. He got together the ships once again, and, manning them, he made his way from point to point along the great river system, attacked here and there by the Indians on the banks, and occasionally challenged by flotillas of canoes, which boldly came out to assume the aggressive. But in every case the lesson taught the Indians was a severe one, and, undeterred by the hostility shown him, Ayolas sailed inland until he came to Asuncion in Paraguay. At this spot the expedition came to a halt, and the weary pioneers landed, and immediately became lost in admiration of the fertile and delightful country in which they now found themselves.

There is no doubt that to the new-comers the country in the neighbourhood of Asuncion, with its pleasant valleys, rolling country, and forest-covered hills, must have come in the shape of a relief after the apparently interminable passage of the plains. It was the spot at which the pioneer would naturally halt, and endeavour to found his settlement.

The Guaraní Indians extended but a cold welcome to the daring adventurers. Their temperament was by nature far less warlike than that of the savage and intrepid natives in the regions of the coast. These Guaraní Indians, nevertheless, made some show of aggression, and would doubtless have been glad to scare away these undesired strangers. Owing to this, a collision between the two forces occurred; but so crushing was the defeat of the Indians that they resigned themselves submissively to the Spaniards, and henceforth became a vassal tribe, lending assistance to their white masters in both civil and warlike occupations.

Immediately after the victory, the Guaranís were set by the Spanish to assist in the construction of the new town, which was to be the head-quarters of the Imperial power in the south-east of the Continent. Once definitely settled here, the conquistadores set themselves to extend the frontiers of their dominions, which in the first place were confined to the neighbourhood of the new town of Asuncion itself.

The tribes in the immediate neighbourhood were now more than merely friendly: they were actively servile. But the case was different with the other native peoples, more especially with the Indians in the Chaco, the wooded and swampy district on the opposite side of the river. These showed themselves fiercely inimical to the new-comers, and it was seldom that the Spaniards were without a feud of some kind to suffer at their hands.

The new colonists had now time to look about them. Much had happened since they had first landed on the shores of the River Plate, but the main object of the expedition still remained clear to them. This was the discovery of a road from the south-east to Peru. Ayolas determined to take up this fascinating quest in person. Accompanied by a number of men, he sailed up the river until he came to a spot at which he judged that an attempt at the overland journey might well be attempted. Leaving Domingo Martinez de Irala, his lieutenant, in charge of the ships and of a force of men, Ayolas marched into the forest and disappeared into the unknown. It was his fate never to return. His company, ambushed and cut up by a tribe of hostile Indians, perished to a man.

It was months before Irala learned of the catastrophe. In the belief that his chief was still in the land of the living, he waited with his ships and men at the point where Ayolas had disembarked, varying his vigil from time to time by a cruise down-stream in search of provisions. The news came to him at length, shouted out by hoarse defiant voices from the recesses of the forest on the banks. For a while the Spaniards would not believe the surly message of death given by the unseen Indians. In the end, however, its truth could not be doubted, and Irala assumed command of the party. Returning to Asuncion, he was unanimously appointed Governor by the settlers of the place.

The character of Domingo Martinez de Irala was eminently suited to the post he now held. His courage was high, his determination inflexible, and his energy abundant. It is true that, in the same manner as his colleagues of the period, he was frequently totally careless of the means employed so long as the end was achieved. Nevertheless, he was in many respects an ideal leader, and his vigorous personality kept in check both the ambitions of the Spanish cliques and the dissatisfaction of the less friendly Indians.

Irala was destined to undergo many vicissitudes in the course of his Governorship. Very soon after he had been elected to this post it was his fate to be superseded for a while. Alvar Nuñez Cabeza de Vaca, having obtained the appointment in Spain itself, came out by Royal Licence to govern the new province of which Asuncion was the capital. Cabeza de Vaca was essentially a humanitarian Governor, who proved himself extremely loth to employ coercion and the sword, which means, in fact, he only resorted to with extreme reluctance as a very last resource. His courage and determination were evidenced by his overland journey; for, instead of sailing up the great river system from the mouth of the River Plate, he brought his expedition overland from Santa Catalina in Brazil, advancing safely through the numerous tribes and difficult country which intervened between the coast and Asuncion.