The succession of the Bourbons to the Spanish Crown, at the beginning of the eighteenth century, brought about a considerable change of colonial policy. To England was conceded the privilege of exporting negroes to South America, and French vessels were permitted to come round the Horn and trade at Peruvian ports. The latter concession was soon revoked and the commerce of the Pacific coast again became a monopoly for the ring of merchants at Cadiz. The Atlantic, however, by this time swarmed with ships of all the European maritime Powers, and it was impossible to prevent smuggling at the Caribbean and Argentine ports. The Madrid government reluctantly came to the conclusion that it was impossible to administer effectually from Lima the provinces which were commercially tributary to the Caribbean Sea. In 1740 Bogotá, on the populous plateau of eastern New Granada, was made the capital of a new viceroyalty, under whose jurisdiction were placed the captaincy-general of Venezuela and the presidency of Quito. Buenos Aires was a resort for contraband traders under non-Spanish flags, and smuggling through that port so increased that goods coming from Spain by the Panama route were undersold in the markets of Argentina, Paraguay, Chile, Bolivia, and even Peru itself. In 1776 the southern Atlantic region was detached from Lima, and to the new viceroyalty of Buenos Aires were attached not only the Plate provinces--Buenos Aires and Paraguay--but also that part of Chile which lay east of the Andes, as well as Tucuman and the audiencia of Charcas as far north as Lake Titicaca. By these changes Peru was reduced to its present dimensions, except that Chile remained attached as a semi-independent captaincy-general.
Three times since its foundation had Lima been nearly destroyed by earthquakes, but none of them was to be compared with the convulsion which in 1746 reduced the whole city to a shapeless mass of ruins. More than a thousand people perished; a great wave engulfed Callao, drowning half the population and carrying great ships far inland.
The expulsion of the Jesuits in 1767 was effected without difficulty. In the neighbourhood of Lima alone they owned five thousand negro slaves and property to the value of two million dollars, and every penny of their immense accumulations was confiscated by the government.