The rapid decadence of Spain itself during the reigns of the last kings of the House of Austria was reflected in the colonies. With the accession of the Bourbons a forward movement began, and the colonial administration was roused into an appearance of activity. Something was done in the direction of adopting a more rational commercial policy, but it was already too late. The control of trade had irrevocably passed to Holland and England, and Spain could not recover the business of her own colonies. The efforts to improve administration were largely nullified by the conservatism of her aristocracy. It seemed that her mediæval governmental machinery could not be adapted to the conditions created by her active rivals.
In 1726, Montevideo, the strategic key to Uruguay and the north bank of the Plate, was occupied and fortified. Thereafter, though Colonia still remained in Portuguese hands, it was isolated and scarcely tenable. Immediately the north shore of the Uruguay began to be settled by Spaniards. Simultaneously the ranchers of the right bank of the Paraná, who had long been tempted by the fine pastures on the opposite shore, finally ventured to secure a foothold in Entre Rios. The warlike Charruas had kept the white man out of this favoured region for two centuries, although it was so near to Buenos Aires. They did not yield without a struggle, but they were overcome, and those who refused to submit fled to the east bank of the Uruguay River--the present country of that name. There they were followed by the proselyting Jesuits, and it was only a question of a few years before the Argentines proper had crossed the Uruguay and were pasturing their herds in the rolling champaign country that extends from that river to the sea. The Spanish advance would have continued up the coast, probably as far as the northern boundary of the Rio Grande do Sul, if the Portuguese had not in the meantime established a town and fort at the mouth of the Duck Lagoon, which is the only port that gives access to the interior of that most valuable region.
The increase of population, the extension of the occupied pasture-ground, and the greater demand from Europe for hides and wool, tended to multiply the volume and value of Argentine exportable commodities. Northern Europe made marvellous strides in purchasing power during the eighteenth century, and prices all over the world felt the impetus. The commercial policy of the Spanish government became more lax and the trade prohibition fell into contempt and disuse. The system of fleets of Spanish ships under convoy was abandoned, and single ships, mostly foreign owned, and trusting to their sailing qualities and equipment to escape capture, carried all the trade. The trade of Buenos Aires grew and the population of the city increased in proportion. The exhaustion of the surface deposits and richer lodes of precious metals in the mining provinces during the eighteenth century tended to increase the relative importance of Buenos Aires and her territory, even in the mind of the Spanish government, and to turn a current of immigration toward the pastoral and agricultural provinces.