When the new code of laws abolished the audiencia of Panamá and appointed the audiencia of the Confines,[XVII‑20] Alonso de Maldonado was elected its first president[XVII‑21] through the recommendation of Las Casas, the remaining oidores being the licentiates Diego de Herrera, of whom mention has been made in connection with the province of Nicaragua, Pedro Ramirez de Quiñones, and Juan Rogel. Maldonado was directed to establish the seat of government at Comayagua, which was thenceforth to be known as Nueva Villa de Valladolid, but finding that location unsuitable he selected as a more favorable site Gracias á Dios, where in 1545 the first session of the tribunal was held.[XVII‑22] The arrival of Maldonado was celebrated with much rejoicing among the settlers; but their joy was short-lived, for one of the first measures of the audiencia was the publication of the new code of laws which, they declared, was to be strictly and immediately enforced so far as it related to the manumission of the Indians.
In Honduras the new code was regarded with no less disfavor than in the other provinces, and it was probably due only to the sparse population of this territory that we read of no such outbreak among the colonists as that of Gonzalo Pizarro in Peru, and of the Contreras brothers in Nicaragua. The settlers were fain to content themselves with making ineffectual protests, and with sending procurators to advocate their cause at the court of Spain. It does not appear that the natives were at all benefited by the regulations enacted in their favor; for a year or two later, on the arrival at Gracias á Dios of Las Casas and Valdivieso, the former declares that despite all the royal ordinances to the contrary, the Indians placed under the protection of the crown were so grossly maltreated that they preferred to return to the service of their former masters rather than enjoy their new and doubtful liberty.
On the first of June 1549 a royal cédula was issued ordering that the natives should not be used as pack-carriers, except in cases of extreme necessity, and that all employed in whatever capacity should receive payment for their services. These regulations appear, however, to have made their lot still more grievous, for the Spaniards, no longer owning them as human chattels and caring not for their lives, treated them even more harshly than before. At Gracias á Dios we learn that they were offered for hire at public auction, and after being disposed of to the highest bidder were sent to the mines or to the sea-shore forty miles distant. They were driven together, Las Casas tells us, within a circuit of ten or fifteen leagues, and a guard being placed over them, were enclosed in a corral like cattle. They were then divided by an alguacil among the settlers, and after working hard for a month received two reales, sometimes being required to serve an entire year for a single peso. When used as beasts of burden they were compelled to carry a load of seventy-five or one hundred pounds through a country abounding in swamp and forest. Their food consisted of a few hard cakes of maize, and at night, their blankets being taken from them to prevent their running away, they were often left to sleep in the open air almost naked and without shelter.