Finding their comrades did not return, Irala and his companions determined to descend the river, and on their downward journey opposite the mouth of the river Pilcomayo, finding a suitable site for colonizing, they founded (1536) what proved to be the first permanent Spanish settlement in the interior of South America, the future city of Asuncion (15th August 1536).
This able leader, eager to reach Asuncion as quickly as possible, sent on his ships to the river Plate, but himself with a small following marched overland from Santa Catherina on the coast of Brazil to join Irala.
In 1573 Juan de Garay, at the head of an expedition despatched from Asuncion, founded the city of Santa Fe near the abandoned settlements of San Espiritu and Corpus Christi.
In 1620 Buenos Aires was separated from the authority of the government established at Asuncion, and was made the seat of a government extending over Mendoza, Santa Fe, Entre Rios and Corrientes, but at the same time remained like the government of Paraguay at Asuncion, and that of the province of Tucuman, which had Cordoba as its capital, subject to the authority of the viceroyalty of Peru.
Behind them the Spaniards, who had an establishment at Asuncion, had penetrated almost to the sources of the waters of Paraguay, and had succeeded in establishing communication with Peru.