The first settlement on this island was made in 1508, on the north coast, at the distance of more than a league from the present port of San Juan, the space between being swampy.  Ponce called it Caparra.  When the promising result of Ponce’s first visit to the island was communicated to King Ferdinand by Ovando, the Governor of la Espanola, his Highness replied in a letter dated Valladolid, September 15, 1509:  “I note the good services rendered by Ponce and that he has not gone to settle the island for want of means.  Now that they are being sent from here in abundance, let him go at once with as many men as he can.”  To Ponce himself the king wrote:  “I have seen your letter of August 16th.  Be very diligent in the search for gold-mines.  Take out as much as possible, smelt it in la Espanola and remit it instantly.  Settle the island as best you can.  Write often and let me know what is needed and what passes.”

Armed with these instructions, and with his appointment as governor ad interim, Ponce returned to San Juan in February, 1510, with his wife and two daughters, settled in Caparra, where, before his departure in 1509, he had built a house of stamped earth (tapia), and where some of the companions of his first expedition had resided ever since.  Ponce’s house, afterward built of stone, served as a fort.  A church or chapel existed already, and we know that there was a smelting-house, because we read that the first gold-smelting took place in Caparra in October, 1510, and that the king’s one-fifth came to 2,645 pesos.

[Illustration:  Plaza Alphonso XII and Intendencia Building, San Juan.]

With the reinstatement of Ceron and Diaz, complaints about the distance of the settlement from the port, and its unhealthy location, soon reached the king’s ears, accompanied by requests for permission to transfer it to an islet near the shore.  No action was taken.  In November, 1511, the monarch wrote to Ceron:  “Ponce says that he founded the town of Caparra in the most favorable locality of the island.  I fear that you want to change it.  You shall not do so without our special approval.  If there is just reason for moving you must first inform me.”

Caparra remained for the time the only settlement, and was honored with the name of “City of Puerto Rico.”  A municipal council was installed, and the king granted the island a coat of arms which differed slightly from that used by the authorities till lately.

The next settlement was made on the south shore, at a place named Guanica, “where there is a bay,” says Oviedo, “which is one of the best in the world, but the mosquitoes were so numerous that they alone were sufficient to depopulate it.” [81] The Spaniards then moved to Aguada, on the northwestern shore, and founded a settlement to which they gave the name of their leader Soto Mayor.

This was a young man of aristocratic birth, ex-secretary of King Philip, surnamed “the Handsome.”  He had come to the Indies with a license authorizing him to traffic in captive Indians, and Ponce, wishing, no doubt, to enlist the young hidalgo’s family influence at the court in his favor, made him high constable (alguacil mayor) of the southern division (June, 1510).