In the meanwhile Colonia, whose inhabitants by this time must have been rendered giddy by the continuous substitution of bunting, had again passed into the possession of the Portuguese. The recurrence of war between these and the Spaniards gave Pedro de Ceballos, an able and energetic Governor of Buenos Aires, an opportunity to act. In 1762 he surprised Colonia, captured it, and was in the act of invading the ceded territory of Rio Grande when the Treaty of Paris came inopportunely into being to stay him in his path of conquest, and to give back Colonia, that bone of contention, to the Portuguese once more.
This occurred in 1763, and Ceballos was powerless to struggle further against a fate that caused victory to be followed by the loss of provinces. Nevertheless, he took various measures towards the preservation of the remaining territory. One of the most important of these was concerned with the numerous Portuguese families that were settled along the eastern frontier of the country. Having reason to believe that these were hatching further warlike schemes in conjunction with the authorities across the border, Ceballos caused them to be taken south, and to be collected together in a small settlement in the neighbourhood of Maldonado, where they could remain under the watchful eye of the Uruguayan officials.
In 1767 the expulsion of the Jesuits from South America by King Carlos III. of Spain proved of no little moment to the Banda Oriental, since many of the Indians, wandering shepherdless and at a loss, came southwards, and became part and parcel of Uruguay. It was by means of twelve of these Indian families that the city of Paysandú, amongst several others, was founded, while the fields of Montevideo and Maldonado derived many new cultivators from this source.
It was but a very few years later that the trouble with the Portuguese broke out once again. Indeed, it would seem that indulgence in border feud had now become an ineradicable habit on the part of both sides. By the year 1774 the inhabitants of Brazil had once again passed over the north-western frontier, and had spread themselves over the country in such numbers as to render their presence a menace to Uruguay. In order to remedy the situation, Vertiz, the Governor of Buenos Aires, crossed from Buenos Aires to Montevideo, from which city he sallied out northwards with an army of four thousand men. Meeting with the Portuguese forces in the neighbourhood of the Santa Tecla range, he routed them and pursued them as far as the River Yacuy, depriving them of the lands they had usurped.