No. 436.

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

No. 213.]

Sir: The Constituent Assembly met on the 1st instant, pursuant to its adjournment one year ago. It then adjourned to give opportunity to General Iglesias, whom it had elected provisional President with dictatorial powers, to establish internal peace in Peru. He was to convoke the Assembly whenever the country should be pacified; but pacification had not been reached, and it became a question with many whether the Assembly would be permitted to convene on the day fixed by itself upon adjournment.

The Government, however, caused the Assembly, of which hardly more than a quorum appeared, to be opened with very marked display. All the troops at its command were on parade and the President repaired to the hall of Congress, accompanied by all the highest dignitaries of Government, in full dress. The diplomatic corps attended also in full dress, as were the deputies themselves.

The speech read by the President was replied to by the presiding officer of the Assembly in highly courteous terms, but there is in the remarks rather an insinuation that with a year in time and dictatorial powers, the general had not been successful or happy in the measures adopted.

Since the opening, the Assembly has received many propositions of its members respecting the future of the Government. A numerous party desires conciliatory measures with Cáeeres and an early election of President and Congress. Another party desires that the present regime shall be extended, with all its present powers, in order that a peace may be reached through the military power. Yesterday the debate became somewhat excited, and personal charges were interchanged freely, while the people witnessing the excitement cheered those who advocated conciliation. The debate will be resumed to-day, and there are those who anticipate disturbances as the final issue.

It is unquestionably true that however much the country desires peace, there is hostility to the Government of Lima of such general character, arising partly in the distrust of the people composing its leading members, but mainly from the part played by Chili in its establishment, that disturbances will become imminent should the Assembly fail to provide for an election. This feeling is being encouraged by the partisans of Pierola, whose power with the masses is still great.

Meanwhile, General Cáceres has begun an offensive movement from Arequipa and threatens Ayacucho, where the Government has considerable forces under Mas. It is hardly possible that Cáceres would have begun this march without feeling well assured of his influence with the Indians in that vicinity. These, incited by him, rose upon the strong Chilian division under Uriola, driving it out of that department with heavy loss. The same force attacking Mas would destroy his division, although perhaps 20 per cent, are Chilians, very considerable numbers of whom have enlisted in the Peruvian army, frequently occupying positions as subaltern and non-commissioned officers, and adding much to the fighting qualities of the force in which they serve.

The condition of the country has not materially improved. Its business has declined. Constant interference with tariff, taxes, dues, &c., makes all enterprises hazardous. The customs, with charges strained to the utmost, decline, and paper money has fallen to one-eighteenth of [Page 596] its face value. Fights with, bands of montoneros are frequent, and many hardships are experienced in the interior from the exactions of the soldiery and sub-officers of departments. The public distrust is increased by want of confidence in the action of some high officers affecting the paper currency.

Contracts for railway extensions of importance to the country have been made with Americans of standing, and will doubtless be carried out when peace shall have been established.

In general, where the Government is in uncontested possession, peace and personal security prevail.

I have, &c.,