No. 430.

Mr. S. L. Phelps to Mr. Frelinghuysen .

No. 194.]

Sir: Since my last report upon the political condition of Peru, there has been no very decided change for the better. The rule of the Government has been somewhat extended in limits, but its agents commit many outrages, while reports of fights with montoneros are numerous.

Cacéres retains control over Moquegua, Arequipa, Puno, and Cuzco, but dissatisfaction with his rule seems to be as prevalent in those departments as is shown in the north with the Iglesias Government.

A small steamer has been purchased and armed for the purpose, it is said, of blockading the port of Mollendo.

The army now numbers some 6,000 men, well armed, fairly well disciplined, and immoderately officered. With this force peace has thus far been maintained here and in the immediate vicinity.

I have, &c.,