No. 300.
Mr. Phelps to Mr. Frelinghuysen.

No. 139.]

Sir: Since my last communication the Government has largely concealed its doings from the public. Soldiers in some force have been sent over the mountains in the direction of Huancayo, where, as I learn from an American recently arrived, there were 800 very well-armed and disciplined troops of Caceres, being a reserve force not engaged in the fight in this city on July 27. No doubt the existence of that force accounts for the activity in sending men in that direction.

On the 6th of September Caceres, being at Ayacucho, issued a proclamation stating his purpose to continue war against Iglesias; says he will be at the head of a respectable army in Arequipa, and will renew the war from thence. He must be a man of some power since all who come in contact with him believe in his capability and destiny. I notice this in case of the foreigners employed on the trains captured by Caceres.

In the north it is said Puga is prepared to resist the Government force, but our knowledge in that regard is meager.

In Lima and vicinity quiet and peace reign, except for suspects and those against whom the Government gets information, but confidence does not increase and hopes for. the future do not brighten.

I have, &c.,