No. 437.

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

No. 215.]

Sir: Since the date of my last communication the Assembly has discussed various projects regarding Government, and has become divided into two distinct parties, one desiring to continue the government of General Iglesias with the same powers it has hitherto exercised until the country shall be pacified, and, as a consequence, the continuance of its own existence until it shall have subsequently provided for a government, and General Cáceres meanwhile shall be put down by military force. The other desires to provide for an election in the near future of a President and of Congressional deputies, and the appointment of a commission to General Cáceres with a view to making peace with that chief. The former, so far, has a decided majority. Free discussions, a resume of which is published in the daily papers, are evidently beneficial.

The financial and commercial conditions of the country constantly decline.

There are reports of uprising of Indians in Huaraz and of trouble at Truxillo, and some rather hurried movement of troops would rather appear to confirm those reports.

Except as showing the state of anarchy still existing away from the vicinity of the capital, such events have little influence upon the problem of establishment of lawful Government, which seems to be one of peculiar difficulty for this unhappy people.

I have, &c.,

S. L. PHELPS.