No. 331.
Mr. Caldwell to Mr. Fish.

No. 25.]

Sir: I have the honor to inform you that civil war has been formally inaugurated in this republic, and two combats have taken place, attended, considering the forces engaged, with much effusion of blood.

Ever since the accession of the present party to power, Buenos Ayres, whither the principal men of the opposition fled, has been the center of conspiracy against this government. On the return of the leaders who had been banished to Havana, and who actually landed in the United States, large numbers crossed over from Buenos Ayres, and, entering the northern department of the republic, commenced military operations.

The officer commanding for the government in Salto passed over to [Page 606] the revolutionists with nearly all his command, thus giving them possession of this important town and much material of war. Large quantities of arms and ammunition have been obtained from Buenos Ayres.

* * * * * * *

About ten days ago two combats took place on nearly the same day, one at Guyabos, near Paysandu, on the Uruguay River, and the other at Perseverano, in the interior. In the former the revolutionary force, which seems to have been a vanguard, was nearly annihilated, 60 being killed out of a force of about 70. It is currently reported here that these men were massacred after surrendering, and a sentence in the official report of General Borgas would seem to give ground for suspicion. He says: “I regret the affair at Guyabos was so sanguinary, since I was not in time to prevent it.” Among the killed was the commanding officer, Major Gurmendez, one of the banished men recently returned from New York.

In the engagement at Perseverano the government force met with a defeat, losing over 50 killed, 70 wounded, and 40 prisoners, besides arms, ammunition, and horses. The insurgents acknowledge a loss of only 5 killed and 17 wounded.

The government has declared the entire republic in a state of siege, and has called out the national guard. It has closed by decree all the ports of the republic on the Uruguay River against vessels proceeding from Buenos Ayres. Troops are being raised with all possible dispatch, and the government is sanguine of putting down the rebellion.

The financial situation of the country remains in the same deplorable condition, and business naturally grows worse from day to day. A new minister of finance, Don Andrés Lamas, has been appointed, but all his measures, which seem to be wise, are rendered nugatory by the universal want of confidence. Señor Lamas, who is at the same time minister of foreign affairs, has the reputation of being the ablest man in the republic.

I have, &c.,

JOHN C. CALDWELL.