Chapter III details the events of Gonzalo Ronquillo de Pefialosa's administration and the interim of government of Diego Ronquillo. Events, with the greater stability constantly given the islands, follow more quickly. Gonzalo de Peñalosa, by an agreement with the king, is to take six hundred colonists--married and single--to the islands, in return for which he is to be governor for life. He establishes the town of Arevalo in Panay, builds the Chinese Parián, endeavors, although unsuccessfully, to discover a return passage to Nueva España, by the South Sea, and despatches "a ship to Peru with merchandise to trade for certain goods which he said that the Filipinas needed." He imposes the two per cent export duty on goods to Nueva España, and the three per cent duty on Chinese merchandise, and "although he was censured for having done this without his Majesty's orders" they "remained in force, and continued to be imposed thenceforward." The first expedition in aid of Tidore is sent for the conquest of the island of Ternate, but proves a failure. Cagayan is first pacified, and the town of Nueva Cáceres founded. Gabriel de Rivera, after an expedition to Borneo, is sent to Spain to consult the best interests of the islands. Domingo de Salazar receives his appointment as bishop, and is accompanied to the islands by Antonio Sedeño and Alonso Sanchez, the first Jesuits in the islands. In 1583 Gonzalo de Peñalosa dies, and is succeeded by his kinsman Diego Ronquillo. Shortly after occurs Manila's first disastrous fire, but the city is rebuilt, although with difficulty. In consequence of Rivera's trip to Spain, the royal Audiencia of Manila is established with Santiago de Vera as its president and governor of the islands. In the fourth chapter are related the events of Santiago de Vera's administration, and the suppression of the Audiencia. Vera reaches the islands in 1584, whence shortly afterwards he despatches another expedition to the Malucos which also fails. The pacification continues, and the islands are freed from a rebellion and insurrection conspired between Manila and Pampanga chiefs. Fortifications are built and an artillery foundry established under the charge of natives. During this term Candish makes his memorable voyage, passing through some of the islands. Finally the Audiencia is suppressed, through the representations made by Alonso Sanchez, who is sent to Spain and Rome with authority to act for all classes of society. On his return he brings from Rome "many relics, bulls, and letters for the Filipinas." Through the influence of the Jesuit, Gomez Perez Dasmariñas receives appointment as governor of the islands; and with his salary increased to "ten thousand Castilian ducados" and with despatches for the suppression of the Audiencia, and the establishment of regular soldiers, he arrives at Manila in May, 1590.