Cuzco, the Peruvian capital. They now numbered nearly five hundred,
having been reinforced by the arrival of Almagro from Panama.

In Cuzco they found great quantities of treasure, with the natural
result that the prices of ordinary commodities rose enormously as the
value of gold and silver declined, so that it was only those few who
returned with their present gains to their native country who could be
called wealthy.

All power was now in the hands of the Spaniards. Pizarro indeed placed
upon the throne of the Incas the legitimate heir, Manco, but it was only
in order that he might be the puppet of his own purposes. His next step
was to found a new capital, which should be near enough to the sea-coast
to meet the need of a commercial people. He determined upon the site of
Lima on the festival of Epiphany, 1535, and named it "Ciudad de los
Reyes," or City of the Kings, in honour of the day. But this name was
before long superseded by that of Lima, which arose from the corruption
of a Peruvian name.

Meanwhile Hernando Pizarro, the brother of Francisco, had sailed to
Spain to report their success. He returned with royal letters confirming
the previous grants to Francisco and his associates, and bestowing upon
Almagro a jurisdiction over a given tract of country, beginning from the
southern limit of Pizarro's government. This grant became a fruitful
source of dissension between Almagro and the Pizarros, each claiming as
within his jurisdiction the rich city of Cuzco, a question which the
uncertain knowledge of distances in the newly-explored country made it
difficult to decide.

But the Spaniards had now for a time other occupation than the pursuit