The System Account is not allowed to start a workflow. When you create a new list item using a workflow, that new item is created by the System Account. So on any new item created by a workflow, "Start workflow on create" will not work. The workaround is to put "Create new item" inside an impersonation step in the second workflow. This will create the new item under the name of the person who publishes the workflow, and the first workflow will start on the newly created item.
I also like to create a new service account, in Central Admin, and publish the workflow from that account, rather than having items look like they were created by me when they were actually created by a workflow.
- Place your cursor outside of any steps, then click Impersonation Step in the ribbon.
- Insert action "Create list item"
- Click on "Current List" to specific field values for the new item.