As the Governor of Chile, one of the most troublesome, poor, and remote of Spanish outposts, O'Higgins was extremely active, promoting the construction of a definitive road between the capital
Santiago and the port of
Valparaíso (part of the layout of which is still in use today), continued the building of the
Palacio de la Moneda in Santiago, improved roads, and erected permanent dikes along the banks of the
Mapocho river which regularly flooded Santiago. He founded cities including San Ambrosio de Ballenary, now
Vallenar (1789); Villa de San Francisco de Borja de Combarbalá, now
Combarbalá (1789); Villa San Rafael de Rozas, now
Illapel (1789); Santa Rosa de los Andes, now
Los Andes (1791);
San José de Maipo (1792); Nueva Bilbao, now
Constitución (1794); Villa de San Ambrosio de Linares, now
Linares (1794), and Villa Reina Luisa del Parral, now
Parral (1795). He focused on developing the resources of the country, with a policy that accomplished much for the Spanish interest but also paved the way for later events in the country's history. He improved communications and trade with other Spanish colonies, based on a growing agricultural base. He abolished the
encomienda system whereby natives were forced to work the land for the crown, an act reinforced by royal decree in 1791. He was made lieutenant-general in 1794. O'Higgins was an early proponent of rice and
sugar cane cultivation in Chile during his rule between 1788 and 1796. Rice cultivation in Chile did however only began more than a century after his rule around 1920. O'Higgins had made this recommendation following the visit of the
Lapérouse expedition to Concepcion in March 1786, and he presumably discussed it with Malaspina while the
Astrea was at Concepcion. Following the ''Astrea's'' return to Spain, Malaspina produced, in partnership with
José de Bustamante, a proposal for an expedition along the lines set out in O'Higgins' memorandum. A short time later, on 14 October 1788, Malaspina was informed of the government's acceptance of his plan. José de Espinoza y Tello, one of the officers of the Malaspina expedition, subsequently confirmed the importance of the information sent by O'Higgins in stimulating the Government to initiate an extensive program of exploration in the Pacific. The prompt acceptance of O'Higgins's and Malaspina's proposal was also stimulated by news from
St. Petersburg of preparations for a Russian expedition (the
Mulovsky expedition) to the North Pacific under the command of Grigori I. Mulovsky that had as one of its objectives the claiming of territory on the northwest coast of America around
Nootka Sound that was also claimed at the time by Spain.
Huilliche uprising of 1792 In 1784 the Governor of Chiloé,
Francisco Hurtado del Pino, and Ambrosio O'Higgins had been ordered to open a route over
Huilliche territory between
Maullín and Valdivia. This caused alarm among the Huilliche of the plains of Osorno, who decided to ally with the Huilliche
Aillarehues of the
Bueno River valley and those around
Lake Ranco to the north, and to request intervention by the Governor of Valdivia, Mariano Pusterla. The latter had good relations with the Huilliches of Río Bueno and Ranco because of his support for peaceful contact coupled with a religious mission, and refused to establish any new fort in the territory. On the other hand, the Governor of Chiloé, Francisco Hurtado, supported a hard line against the Huilliches and threatened them with military invasion. In February 1789 the
Treaty of Río Bueno was signed between Huilliche chiefs and colonial authorities. This treaty averted invasion from Chiloé, and gave the Huilliches of Osorno support from the Valdivia authorities against
raids by the Aillarehue of
Quilacahuín. At that point the Huilliches offered to facilitate the new
Camino Real and to allow Spaniards to reoccupy Osorno, a city that had been abandoned in 1602. In 1792 O'Higgins rebuilt
Osorno, and as a reward was created
1st Marquess of Osorno by King
Charles IV in 1796. The treaty also allowed Spaniards to settle and form
haciendas north of the
Bueno River. However, abuses in this settlement and a fast advance of new haciendas made several chiefs change their minds. The
caciques Tangol from
Río Bueno, Queipul and Catrihuala decided to form an alliance. The Huilliche Rebellion of 1792 ensued, beginning with the pillaging of haciendas and missions, and with the ultimate aim of attacking Valdivia, which despite being well defended from the north and west, seemed vulnerable to a land attack from the southeast. Despite the limited extent of this rebellion, which never became a real threat to Valdivia, the Spanish authorities responded to it with rigour. Governor O'Higgins chose Captain
Tomás de Figueroa to lead the reprisal. Figueroa set fire to
Indian houses and croplands near his marching route, and arrested a large number of male
Huilliches as suspected rebels. After that, the Spaniards considered it appropriate to enter into a new treaty with the Huilliche leaders, and a conference with this object was held in Las Canoas, in
Osorno, in 1793. While in the treaty of Río Bueno the Spanish had been allowed to form haciendas only north of the
Bueno River, establishing that watercourse as a
de facto frontier, the Spaniards now acquired the right to set up haciendas south of it.
Parliaments of 1793 The same year, 1793, a new parliament
was held in Negrete on the
northern frontier with the aim of ratifying and renewing the older Treaty of Lonquilmo from 1783. Copying older treaties, the
King of Spain was confirmed as the sovereign of the
Araucanía, while the possession of the land was reserved for the
Mapuches, which resulted in a
de jure sovereignty of the King of Spain but in a
de facto independence of the Mapuche-controlled lands. The treaty celebrations were held from 4 March to 7 March, with many banquets of wine and meat being held for the numerous participants. The whole treaty cost 10.897 pesos, which was, according to
Diego Barros Arana, an enormous amount of money, considering the size of Chile's treasury. ==As Viceroy of Peru==