Mr. Thompson to Mr. Gresham.

No. 170.]

Sir: Following my No. 156, February 6, I have the honor to report but little change in the military situation. There has been, however, some spirited lighting on the Nictheroy side of the bay, and on the morning of February 10 an attack was made on the Armacão. The insurgents secured possession of the point, but were driven back with considerable loss in life and arms. The Government loss in killed and wounded is said to have been greater than the insurgents’, but definite figures can not be obtained. The attack was daring and the fighting on both sides desperate. Admiral Saldanha da Gama in person commanded the insurgents and was severely wounded in the neck, breast and arm.

The latest news from the south is to the effect that Mello, with 1,500 troops, is in possession of Paranagua. Gumacindo, commanding the revolutionists in Rio Grande do Sul, after defeating the Government forces under Gen. Machado, marched to Ouritiba. The revolutionists control the small state of Parana, except the town of Lapa, which, strongly fortified, is defended by Col. Carneira with a force of 1,200 men. The revolutionists are poorly provided with artillery. There are but two natural passes into Sao Paulo from Parana. These are at Itavare and Santos. The Government has 2,500 troops defending Itavare and about the same number at Santos, with a reserve of 2,500 at Sao Paulo. Gen. Machado is reported to have rallied his forces, numbering 4,000 men, south of the position of the revolutionists, and it is believed, should the revolutionists attempt to pass into Sao Paulo at Itavare and be defeated, their retreat will be cut off by Machado. Mello is reported to have abandoned a contemplated advance from Iguape to Santos, and he may reenforce the command of Gumacindo at Ouritiba.

The Destroyer and four torpedo boats left Pernambuco on the 10th instant for Bahia, and the Government fleet is expected soon to arrive at Rio, where temporary accommodations for the people are being erected on the outskirts of the city preparatory, apparently, for a general engagement between the loyal and rebel forts and ships.

The recent announcement by the Vice-President of the Republic that the elections would be held on March 1 has, in a measure, given the people more confidence in the Government, although the partisans of Mello and Da Gama condemn it as a prearranged attempt to continue Peixoto’s influence in the Government. This, however, appears to be unjust, as Prudente Moraes, an upright, highly educated, conservative man, has been brought forward as the candidate for President, and at this writing it appears as if he will be chosen without opposition.

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Alfonso Penna, the present governor of Minas, to whom I have referred before as a possible aspirant, has declined to be a candidate in the interest of peace and the elevation of a civilian to the presidential chair. Prudente Moraes is the president of the national senate and is said to be an able man, and one upon whom all conservative elements can unite, whose election would bring to a close the unhappy condition now prevailing. Above all it is claimed his election would divorce the army and navy influence from civil affairs and bring the people more directly in touch with the Government.

I have, etc.,

Thos. L. Thompson.