Here, west and a bit north of Mexico City, where the Sierra Madre meet the Pacific, the Cocan Indians lived long before the Spanish invasion and long before the docking of the first "Love Boat." In 1918 the town known as Las Peñas, founded in 1851, was made a municipality and renamed Puerto Vallarta. In 1968 it was finally made a city. The Bay of Banderas (Bahia de Banderas), Flags Bay, provides the harbor for Puerto Vallarta. The bay got its name in 1525 when the Spanish Conquistador Francisco Cortes engaged an Indian army on the beach. The Indians were armed with bows, arrows, wooden swords, and little flags made of colorful leathers. That encounter gave birth to the name for the bay and the valley. Today the beach is invaded by tourists and beach merchants.