No. 447.

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

No. 249.]

Sir: By the last mail hence I had the honor to communicate such intelligence respecting the situation of the civil war in the interior as appeared in the Government reports and seemed fairly reliable.

It now appears that the commander of the army was largely deceived as to the condition in General Cáceres’s camp, but how a failure in an attack at that point was reported as a success is not understood. The Government force was, in fact, compelled to retire, and was harassed greatly by Indians and montoneros. Now we learn that the Government force has retreated upon Jauja; that General Cáceres’s men did not disperse, as stated; that General Cáceres was re-enforced and has assumed the offensive in some form.

The montoneros are intrenched at Truxillo, and the Government declines to attack them. It has the ports in that section closed, and several important ones to the south remain still closed by decree, and the Pacific Steam Navigation Company submits to the action, not visiting these parts.

The Government has occupied Mollendo, but we have no news of any movement against Arequipa itself.

The montoneros are very active in all sections of the country. Upon the whole, peace appears to be farther off than it did a week ago.

The Indians and montoneros are devoted to General Cáceres and resort to all kinds of practices to deceive the Government, whose commander-in-chief operates in a hostile country, so that people in Lima know little enough of what is really transpiring.

I have, &c.,