No. 17.
Mr. Clapp to Mr. Hunter.

No. 5.]

Sir: I have the honor to report that affairs connected with Paraguay and Brazil have, within the last month, attracted much attention. It appears that the diplomatic representatives of Brazil and of this republic met at Asuncion for the purpose of concluding final treaties, or a joint treaty, which should settle the disputed boundary-lines between the three nations, and all other questions growing out of the recent war. Dr. Quintana, on the part of the Argentine Republic, demanded that the whole of the Grand Chaco should be acknowledged as Argentine territory. This is a vast wilderness on the right bank of the river Paraguay, and extending through about the same degrees of latitude as that republic. It embraces probably from three to four thousand, square miles, and is traversed by two principal rivers, the Vermijo and the Pilcomayo. It has only one small settlement, which is called Ville Occidental, and is located above Asuncion on the Paraguay River, and was established by Lopez, who sent there some French emigrants. This vast wilderness is inhabited only by a few savages. The Paraguayan government refused to accede to the demands made by Dr. Quintana, in which refusal it is understood that they were sustained by the Brazilian envoy. Dr. Quintana finally withdrew from Asuncion and returned to Buenos Ayres. After his withdrawal a treaty was arranged between Brazil and Paraguay, whereby the river Apa is to constitute the boundary-line of the two countries, Brazil remitting all financial claims on account of the war, and agreeing to maintain a military force in Paraguay in support of the present government.

I consider the information that I have obtained respecting this treaty to be reliable, as far as it goes, and, I understand, by it Brazil obtains all the territory to which she has ever made any claim. The arrangement [Page 30] was evidently consummated very soon after the departure of Dr. Quintana. His return, and the publication of the substance of the treaty in the public prints, caused great excitement and angry discussion in Buenos Ay res, the ground of complaint being that Brazil had violated the obligations of the triple alliance which was formed at the commencement of the war, but, before many days, a better feeling seemed to prevail—a confidence in the good faith and friendship of Brazil. At this juncture President Sarmieuto issued a decree constituting the whole of the Grand Ghaeo an Argentine province, designating Ville Occidental as its capital, and naming General Julio de Vedia, the present commander of the Argentine forces in Paraguay, as its governor.

The following is a translation of this decree, cut from the Daily Standard of Buenos Ay res.

Note.—The only copy of this decree that I was able to obtain was sent with the original of this dispatch.

The decree is to the effect that—

The whole of the Grand Chaco is constituted a new province of the Argentine Republic; its capital is established at Ville Occidental. General Julio de Vedia, commander of the Argentine forces in Paraguay, is appointed governor, and he is directed to organize immediately a municipal government at the capital.

The portion of this territory which lies above the Vermejo River, and in which the new capital is located, has, ever since the formation of the South American republics, been claimed by Paraguay and Bolivia as well as by this republic, but Paraguay is the only power that has made any effort to occupy the territory.

No news has vet been received here of the reception of the decree in Brazil.

Rebellion in Coreientes.—A rebellion has recently broken out in the province of Corrientes, Argentine Republic, against the newly elected governor, Don Justo. I have been very much surprised to see that many of the most prominent papers of this city justify and encourage the insurgents; and that when the governor came here and applied for aid to the President he was absolutely refused.

The capital of the province was seized; and it appeared that a revolution had been accomplished, but the latest advices announce that Colonel Babiene, commander of the provincial troops, has completely routed the main body of the insurgents.

I am, &c.,

DEXTER E. CLAPP,
Chargé d? Affaires ad interim.