No. 280.
Mr. Nelson to Mr. Fish.

No. 495.]

Sir: As a consequence of the victory obtained on the 23d ultimo, at San Mateo Sindehui, by the forces under the command of General Alatorre, that officer moved from his headquarters at Nochistlan about the 30th ultimo, penetrating into the valley of Oaxaca. On the 3d instant he had invested the capital of the State, and was preparing for a night assault, when the commander of the garrison surrendered that city, with its forts, artillery, provisions, and four hundred men; the remainder of the insurrectionary forces, with the two brothers Diaz and their principal officers, having previously made good their escape in the direction of Puerto Angel, the nearest sea-port on the Pacific. It is known that a vessel has been lying in that port for the past two months, at the orders of the brothers Diaz, and, should they succeed in embarking with the scanty remnants of their elements of war, it is believed that they will proceed to-Mazatlan.

The significance of this event, as demonstrating the utter impotence of General Diaz in his own State, and presaging the speedy termination of the revolution, is unmistakable, especially when taken in connection with the fact that the leaders of the revolution in the northern States have been unable to make any progress since the taking of Saltillo, a month since. Serious dissensions have occurred between Generals Treviño and Pedro Martinez as to their plan of operation, and the former is reported to have retreated with his forces into his own State of Nuevo Leon. The governor of San Luis Potosi, General Diaz de Leon, who, a few days ago, protested against the declaration of martial law, and left that State with several hundred troops, has again recognized President Juarez, and placed his forces at his disposal. At the same time, General Antillon, governor of Guanajuato, who has previously observed “a policy of neutrality,” has openly taken part for the government with the numerous forces of that State.

In the States of Sonora and Sinaloa the situation has also improved, and the rebels are nearly reduced to the port of Mazatlan, where they have made themselves so unpopular by their exactions and forced loans that even the anticipated arrival of Porfirio Diaz will scarcely enable them long to resist the advancing forces of Governor Rubi and those of the general government.

As anticipated in my last general dispatch, the successful result of the campaign against Oaxaca will enable the government to employ several thousand of its best troops against the northern States, and it may be confidently anticipated that peace will be soon restored, and that the stability of the present government will be assured for four-years to come.

Under date of yesterday, President Juarez issued a decree conferring the government of Oaxaca provisionally upon General Alatorre until an election for State officers can be held.

I am, & c.,

THOMAS H. NELSON.