Minister Lee to the Secretary of State.

No. 10.]

Sir: I have the honor to report that after several engagements Gen. Eloy Alfaro, a former President of Ecuador and now leader of the revolutionists, entered Quito and took possession January 17, 11 a.m.

The constitutional President to whom my letter of credence was addressed, Mr. Lizardo Garcia, took refuge in the legation of Colombia, but before doing so he issued a decree, according to the constitution removing the capital of the Republic to Guayaquil and transferring the executive power to the Vice-President, who resides in that city. Also a strong cabinet was re-formed there.

The insurgents entered in more or less order. There was little disturbance.

The federal opposition, after the defection of the four battalions noted in my No. 7 of January 13, seems to have melted here like snow in the sun. However, Guayaquil, which controls the monetary situation, is reported loyal to the constitutional Government, and General [Page 624]Plaza is there preparing his troops for the retaking of Quito. Before the entry of the insurgents, and after receiving a copy of President Garcia’s decree transferring the capital, the diplomatic corps met at the house of the dean, Mr. Micahelles, the German minister, and finally adopted my suggestion that they defer all official treaty with the power in possession until instructions are received. Yesterday I received a communication from the insurgent government requesting me to inform you that General Alfaro had assumed entire charge of the Republic. I await instructions before replying; in the meantime a week or so may change the situation radically.

Prices are soaring and there has been no communication with the coast for twenty days. This dispatch and others go forward by a second attempt to send a diplomatic post through. The first returned.

I have, etc.,

Joseph W. J. Lee.