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He also divided the newly-discovered continent into two governments, of which one was to extend from Cape La Vela to the Gulf of Darien, and the other from the Gulf of Darien to Cape Gracias a Dios. The first was given to Hojeda, the second to Nicuessa. These two "conquistadores" had to deal with a population far less easy to manage than that of the Antilles.

Seven of the Spaniards saved themselves in a large hollow tree, intending to swim off at night; but those on board supposing them all killed, sailed away much dejected, for Uraba, to inquire after Nicuessa.

This resolution was principally forwarded by Balboa, who secretly advised all the principal people to exclude him, yet declared in public that he was for receiving Nicuessa, and even got the public notary to give him a certificate to that effect . After spending eight days among these islands, where he took a few Indians for slaves, Nicuessa made sail for Darien.

While meditating upon this project, a boat came into the port with four men, who reported that Nicuessa had been stranded on an unknown coast, and after marching a great way by land with incredible fatigue, was now not far off, but that he and his followers were in a very miserable condition.

On coming to the landing-place, he found many of the Spaniards on the shore waiting his arrival; when, to his great surprise, one of them required him in the name of all the rest, to return to his own government of Nombre de Dios. Nicuessa landed next day, when the people of Darien endeavoured to seize him, but he was extraordinarily swift of foot, and none of them could overtake him.

After some unlucky adventures, Olano arrived at Veragna, which was their place of rendezvous, where he endeavoured to persuade the people to abandon their original design as impracticable, and to sail for Hispaniola to make the most of what they had left, alleging that Nicuessa had certainly perished with all his men.

They got the promise of a grant of all that had been discovered on the continent; but one Diego Nicuessa interposed, and being a richer man, with better interest, he stopped their grant and procured half of it to himself.

Nicuessa and Hojeda now agreed to separate, that each might pursue the plan of discovery and settlement which was directed by their respective commissions.

There was a story current in the West Indies, that when the Spaniards came afterwards to settle the island of Cuba, they found inscribed on the bark of a large tree, "Here the unfortunate Nicuessa finished his life and miseries."

Understanding that Nicuessa intended to steer for Veragua, Hojeda made all sail for the river of Darien; but having lost his old pilot, on whose experience he chiefly depended, he missed the river, and resolved to establish a settlement on the eastern promontory of the gulf of Uraba, which he did accordingly, calling his new town St Sebastian; because that saint is said to have been martyred by the arrows of the infidels, and was therefore thought a fit patron to defend him against the poisoned arrows of the Indians.