No. 439.

Mr. S. L. Phelps to Mr. Bayard.

No. 226.]

Sir: The Assembly having organized itself into two chambers, Senate and House, has found time after considerable debate to order a commission to be sent to Cáceres, and will itself appoint the members from its own body, calling upon him to surrender, conditioned upon a recognition of this Government, he being guaranteed that the constitution of 1860 shall be immediately proclaimed, and an election of a President and a Congress be ordered within a brief period. I have been asked to communicate the intelligence by cable to General Cáceres to-night, and to ascertain if he will receive the commission.

I have also just received an appeal from Americans and others at Huaraz, setting forth the deplorable condition of affairs there growing out of the imposition of burdens upon the Indians, who have risen en masse, possessed themselves of the department, and are sacking, pillaging, and assassinating. The Government force of 500 men is represented as unable to cope with the mob of infuriated men whose arms are largely clubs.

An American from Ayacucho tells me that when he left there, less than a month since, the Indians were giving much trouble to the Government force of 1,500 men under General Mas.

General Cáceres has 4,000 men in the departments of Arequipa, Puno, and Cuzco, and is apparently awaiting the coming of the dry season, or possibly the action of the Lima Government in respect to elections.

I am rather pleased to be able to state that it is reported that Colonel Puga, one of the notorious northern chiefs, has been shot in a vendetta fight.

Paper money is now ruling at about 5 per cent, of its par value, and business is paralyzed.

I have, &c.,