There was conflict among the settlers from the beginning over prohibition of alcohol, relations with the locals, and Lane's leadership: "I can't help feeling that the movement cannot result in success if that incompetent man Lane continues to mismanage so utterly as he has done up to the present," wrote colonist Tom Westwood. Problems intensified after a second group of colonists arrived in 1894. Dissension caused a rift in the colony and in May 1894, Lane and 58 others left New Australia to found Cosme, a new colony 72 kilometres farther south. Eventually New Australia was dissolved as a cooperative by the government of Paraguay, and each settler was given their own piece of land.