When hostilities were renewed in 1762, the governor of _Buenos Ayres_ succeeded in possessing himself of _Colonia_; but in the following year it was restored to the Portuguese, who continued in possession until 1777, when it was definitively ceded to Spain. The continual encroachments to the Portuguese in the _Rio de La Plata_, and the impunity with which the contraband trade was carried on, together with the questions to which it constantly gave rise with foreign governments, had long shown the necessity for a change in the government of that colony; for it was still under the superintendence of the Viceroy of _Peru_, residing at _Lima_, three thousand miles distant. The Spanish authorities accordingly resolved to give fresh force to their representatives in the _Rio de La Plata_; and in 1776 they took the important resolution to sever the connection between the provinces of _La Plata_ and the Viceroyalty of _Peru_. The former were now erected into a new Viceroyalty, the capital of which was _Buenos Ayres_. It comprised the province of its own name, together with those of _Paraguay_, _Cordova_, _Salta_, _Potosí_, _La Plata_, _Santa Cruz de la Sierra_, or _Cochabamba_, _La Paz_, and _Puno_, besides the subordinate governments of _Monte Video_, _Moxos_, and _Chiquitos_, and the Missions on the Rivers _Uruguay_ and _Paraná_. To this Viceroyalty was appointed _Don_ Pedro Cevallos, a former governor of _Buenos Ayres_. A formidable armament was placed under his command; twelve men-of-war escorting a numerous fleet of transports, sailed from Spain, with ten thousand men. The first act of Cevallos was to take possession of the island of _St. Katherine_, the most important Portuguese possession on the coast of _Brazil_. Proceeding thence to the _Plate_, he razed the fortifications of _Colonia_ to the ground, and drove the Portuguese from the neighbourhood. In October of the following year, 1777, a treaty of peace was signed at St. Ildefonso, between Queen Maria of Portugal and Charles III. of Spain, by virtue of which _St. Katherine’s_ was restored to the latter country, whilst Portugal withdrew from the _Banda Oriental_ or Uruguay, and relinquished all pretensions to the right of navigating the _Rio de La Plata_ and its affluents beyond its own frontier line.