The national mercantile marine having changed its flag the week before the declaration of war, there appeared in 1866 only 15 national vessels, in place of 1,500 or 1,600 that entered in the previous years. The relative maritime importance of the chief ports is as follows: Valparaiso Tons. 354,123 Ships. 901 Coronel.. 418 211,537 Caldera. 324 200,761 Tomé. 287 122,721 Coquimbo. 278 166,001 Constitucion. 247 Huasco. Talcahuano Ancud. Valdivia.. Melipulli.... 53,660 much less probable since the Government of Spain has not followed in the present war the course of and rather has augmented, by her manifest violaconduct which belonged to a civilized belligerent, tions of international law, the grievances suffered by her adversaries, and has made herself liable for reparation. However moderate might be the demands of Chili and her allies, they could not cease to be proportionate to the magnitude of the insults and damages which have been received, and in consequence would be too distasteful to the pride of Spain to presume with reason that they would be accepted by her willingly. The frustration of the object of the conference would lead to arbitration, and although the government of the republic has always been partial to this method of solution, it believes it would not be able to accept it without certain reservations. These reservations are inspired as much by the irregular conduct of the enemy, to which I have just alluded, as by the bases of convention which other mediating powers have previously made, and which Chili has not hesitated to reject. First, it is consid The following is the nationality of the vessels ered that the bombardment of Valparaiso was an entering the Chilian ports: On January 21st General Kilpatrick, ambassador of the United States in Chili, addressed a note to the Chilian Government, transmitting the propositions of settlement which the cabinet of Washington had concluded to suggest to the belligerents in the war of the allied South American republics against Spain. The following extracts from the reply, dated April 17th, of Alvaro Covarrubias, Chilian Minister of Foreign Affairs, explain the proposition of the United States, and the position of Chili: According to these propositions, Chili and her allies on one side, and Spain on the other, should appoint plenipotentiaries to Washington, authorized to meet in a conference presided over by a person whom the President of the United States should designate, for the purpose of agreeing upon terms of a permanent peace which should be equitable, just, and honorable for all the belligerents. In case they should not arrive at a unanimous agreement, the President of the United States should designate a third State or sovereign, who should decide, as arbitrator, the differences which the plenipotentiaries might not succeed in arranging. Even now it is easy to foresee that the manner of convention proposed by the government of your excellency would lead necessarily to an arbitration, pure and simple, the same as frequently occurs between two nations at difficulty with each other, with the sole difference that in this case it would not be the parties themselves but the President of the United States that would choose the arbitrator. To substantiate this it will be sufficient for me to call to mind the extravagant and unjust pretensions which Spain has had since before the commencement of the present war, and the tenacity with which she has adhered to them, until she has involved the republics of the Pacific in a long and disastrous conflict. It is not to be expected, therefore, that in the conference at Washington, Spain would' show herself more favorable to the voice of justice and conciliation. This is act of hostility, inexcusable and meriting the most severe reprobation, whether it be regarded in the light of the present general principles of international right which make the criterion of the ideas and sentiments prevailing in our epoch, or with reference to the consequences and sad precedents which it may tend to create. The opinions of civilized nations have universally execrated this deed; and after so incontestable a verdict it would not be possible to agree that the qualifications of the odious character of the bombardment should be referred to an arbitration. Therefore, my government believes that in this respect the fixing of the kind of reparations which Spain may be obliged to make to Chili and only be a matter of arbitration, and in no manner a her allies in consequence of the bombardment would decision upon the legitimacy or illegitimacy of that most reprehensible abuse of power. In the second place, I cannot fail to take into conwhich have been previously made by other mediasideration that in the propositions of convention tory States, there figured the condition that the belligerents should reciprocally return the prizes made during the course of hostilities. According to this condition, Spain would gratuitously receive the war-steamer Covadonga, captured by the Chilian corvette Esmeralda in good and true combat, and Chili would give up, without compensation, that lawful as well as valuable trophy. I say without compensation, for Spain would not be able to return to the republic even the merchant-ships captured by her naval forces, burned as they have been by those same forces. The Government of Chili would deem it prudent on accepting the arbitration to leave out of the arbitrator's power this inadmissible condition. It would consider necessary also the previous step of explaining in a precise manner the different situations which the contending parties in the present war occupy; situations which have been wont to be confounded in the propositions of settlement before alluded to. In the present war there is only one aggressor, which is Spain, and four injured parties, Chili, Peru, Bolivia, and Ecuador; the first two in a direct manner, and the last two indirectly. Whatever might have been the motives of complaint which the Spanish Government had against Chili and Peru, it is an evident and incontrovertible fact that to get redress she did not begin by exhausting the pacific means of diplomacy, nor did she respect the laws of international right, and that the occupation of the Chincha Islands on the 14th of April, 1864, and the blockade of the ports of Chili on the 25th of September, 1865, were acts of unnecessary hostility, ir regular in their form, and unjust in their motives. Consequently those aggressions of Spain constituted by themselves alone an outrage, as unmerited as it was grave, against Chili and Peru, and fastened upon her the exclusive responsibilities for all the sad consequences of the war in which she involved four republics. Appealing to the judgment of one arbitrator, Chili and her allies would not be able to renounce the reparations which their enemy owes them, nor the right of fixing by themselves the character and magnitude of those reparations. Such are the reservations which my government, in concurrence with her allies, has believed it indispensable to make in order to be able to lend its adhesion to the propositions of settlement of the cabinet at Washington. On March 31st and April 1st the election of representatives for Congress took place. The government carried its ticket in a majority of the districts. The Conservatives have, in the new Congress, a large majority; a considerable number belong to the Moderate Liberals, and only a few are members of the Radical, or, as it is called in Chili, the National party. The new Congress was opened on June 1st. The following are a few of the most important points in the President's message: The mediation of France and England* for a permanent peace could not be accepted, as it did not meet the requirements deemed necessary by the allies, but for an indefinite truce negotiations are still going on. While the proposal made by the United States for a Congress at Washington to settle the difficulties between Spain and the allied republics was acceptable to Peru, Chili saw grave objections to such a Congress, and so in order not to interrupt the good feeling existing between the two countries, she sent her Minister of Foreign Affairs to Peru, who, in conference with her cabinet, effected a complete unison between the views and determinations of the two republics. The relations between Chili and Peru are of the most satisfactory character. The treaty of boundaries between Chili and Bolivia has been ratified by the contracting parties, and exchange of these ratifications has given force to a treaty which destroys every germ of discord in the mutual relations of the two States. The treaties recently signed at Lima by the ministers of Chili, Bolivia, and Ecuador, will shortly be submitted to Congress. The establishment of free trade by the suppression of custom-house dues, and in general the tightening and strengthening of all the ties of intercourse between the contracting republics, are the essential aims and objects of these treaties. Peru was asked to take part in these treaties, but from transient circumstances was prevented. Negotiations are going on for a postal arrangement with Great Britain, which Americans truly hope will be followed by one with the United States, as the greatest confusion exists in the postage and quick delivery of the mails. The revenue of 1866, compared with that of the *The substance of the propositions made by England and France was as follows: 1. The demand for the salute to the Spanish flag to be withdrawn. preceding year, shows a falling off, which does not amount to $100,000. The blockade of Valparaiso and the consequent free importation of foreign goods, which produced a decrease of more than $700,000 in the custom-house receipts, would have made the falling off alluded to much greater, had it not been for the compensation offered by the natural augmentation in the produce of the other branches of reve nue. In the present year Chili has raised a loan in London, of the nominal amount of £2,000,000 sterling, the net product of which will be nearly £1,600,000 and will be applied principally to the redemption of the Anglo-Chilian loan, and to the covering of the deficit occasioned by the purchase of war material. The sum remaining from the last loan, the increase in the receipts of the custom-houses, and the railway between Santiago and Valparaiso-receipts which during the first four months of this year have exceeded those given in a similar period of former years, by $600,000-the greater yield to be expected from the reform of the tax on the licenses to exercise any profession or trade, and stamped paper, and the future tax on legacies, concur to assure an easy position to the public treasury for some time. Affected by the blighting influence of war, commerce was last year in an unsatisfactory state. Imports had diminished, and exports had only increased by $1,000,000. At the present moment, circumstances have happily completely changed. Exports have taken a development unknown in this country, and the increase of imports shows itself in the increased receipts at the custom-houses. Through the friendly mediation of France an exchange of prisoners with Spain has been arranged, and the vessel taking them to France has left our harbor. About the Chilian prisoners nothing is known, but it is to be supposed that they are on their way home, in accordance with the terms of the agreement. Hos Notwithstanding the willingness of the Chilian Government conditionally to accept the proffered mediation of the United States in the war of the allied republics against Spain, no forinal agreement with Spain was arrived at. tilities were, however, not resumed, and the nominal continuance of the war did not deter the Chilian Government from carrying on its public works in Valparaiso, as they presumed their defensive works to be of such a nature as to inspire the Spaniards with sufficient fear to respect them, or at least convince them that a second visit would not be so much to their advantage as the first was. Of the fortifications of Valparaiso, a Belgian engineer, who had had charge of the fortifications at Callao, made a report, which says: "They not only afford the advantage of engaging the enemy at a very considerable distance on the sea side, thus rendering a bombardinent almost impossible, but from the beginning of the engagement the fire of the assailants against the city and the batteries which defend its approaches will be ineffectual." 2. A reestablishment of the treaty of January 27, 1865, While preparing for defence, the Chilian Gov between Peru and Spain. 3. A declaration by Bolivia and Ecuador, establishing the same relations with Spain as existed previous to the declaration of war. 4. A revocation of the edict expelling residents of Spanish birth from the allied republics, and the conditions imposed upon them in case of a continued residence. 5. A reciprocal indemnification for the injuries sustained by the belligerents prior to the declaration of war. 6. An exchange of prisoners. 7. A reciprocal restitution of prizes, and no indemnification for such as may have been destroyed. crnment refrained from any aggressive act. A member of the cabinet officially stated in Congress, on July 28th: "There has never existed a truce between the Spanish Government and the Governments of the allied South American republics; neither have the offices of any other government been accepted to bring about a settlement of our difficulties. But the Chamber of Deputies and the country must understand that we are in no condition to wage an aggressive war, and are determined to preserve our present defensive attitude, without running the risk of remote expeditions, however much we may be provoked to it." At the close of the year 1866 the Government of Chili took the first decisive step toward occupying the banks of the River Tolten, in the southern district of the republic, now inhabited by Indians. On the spot selected as the site of the future city a conference was held, at which were present five hundred of the most influential Indians of that region. In the course of the negotiations Colonel Saavedra, commander-inchief of the forces, made known to the caciques the wishes and purposes of the Chilian Government, and requested them to sell the quantity of land necessary for the building of the projected city and for that of barracks and works of defence. After some mutual explanations the owners of the land acceded to the request of the government, and the construction of buildings was at once begun. The settlements established by the government steadily increased in the course of the year. The territory is to be divided off into districts, and colonies established upon them. The lands that the government grant to the immigrants are free, for the term of twenty years, from the usual contributions, and all colonists are declared to be citizens of Chili, without further steps being taken in the usual manner. The greatest drawback to the colony thus far has been the want of a regular communication with the rest of the republic, being entirely dependent upon the two vessels that went yearly with provisions for the colony, or a chance steamer that passed through the straits to the Pacific. But the establishment of a line of steamers between Valparaiso and Liverpool, that in 1867 was agreed upon between the government and the Pacific Steam Navigation Company, will place this colony in monthly communication with the republic, and thus render its progress more certain. On December 2, 1867, an important decree was issued, granting certain privileges to families or persons desirous of settling in the colony of Magallanes. The substance of the decree is as follows: I. To the families of colonists established in Magallanes, or who may establish themselves there, it is conceded: 1. A free passage, with their luggage, tools, and implements of tillage, in the transport-ships sent by the government to Magallanes. 2. An area of land to be decided upon by the governor, but not exceeding twenty-five hectares for the father of a family. and twelve for each son over fourteen years of age. The land will be sold to the colonists at the rate of fifty cents the hectare, to be paid in the following manner. 3. Free rations for the term of one year for the father and each son over ten years of age. 4. A monthly allowance of five dollars to cach family for the term of one year; but the governor may, with the approval of the government, increase this sum, should extraordinary circumstances warrant it. 5. Freedom from all import dues of tools, machinery, and effects for the private use of each colonist. 6. A collection of seeds, to be chosen by the colonist, to a value not exceeding ten dollars, 300 boards, and a quintal of nails, to be valued at the current price. 7. Medical attendance and medicines, and free schools for children. II. The above assistance will be afforded to the colonist by way of loan, to be returned in the proportion of one-tenth part each year, to commence three years after the colonist takes possession of his land. III. The colonist not taking possession, by himself or agent, of his land within six months from the time of his being accepted by the government, without good reasons for such neglect, will lose his right thereto, and it may be otherwise disposed of as vacant, by the gov ernor. IV. The title to the land will be given to each colonist when, in the judgment of the governor, a proper amount of improvementin fencing and cultivation-shall have been effected. V. If, at the expiration of three years from the date of taking possession, the land be not sufficiently improved to entitle the colonist to a title-deed, as above mentioned, he will lose his right thereto, and the governor may dispose of it in favor of another person, but who will be charged with the value of the improvements effected. VI. Each lot of land will remain hypothecated to the amount owing by the colonist to the public treasury. Another decree of the government appoints a commission of engineers to report upon the best means of irrigating some of the waste tracts of Araucania, and also offers inducements to settle on the frontier of that district. The famous Island of Juan Fernandez was, in December, 1867, leased to a Mr. Robert Wehran, who contemplated establishing a colony and whaling-station there. An extraordinary session of Congress was held in December, 1867, for the purpose of approving of the appropriations for the coming year, as also of several important projects. The government carried all their measures through. One of the principal projects that was carried was to authorize the President of the republic to invest the sum of $800,000 in the construction of government bonded war honses, and a suitable wharf at Valparaiso to enable vessels to lay alongside and discharge their cargoes. CHINA, an empire in Eastern Asia. Emperor, Ki-Tsiang (before his accession to the throne, Tsai-Sung), born April 5, 1855; succeeded his father, Hieng-Fund, August 22, 1861. The estimates of the area of China Proper vary from 1,294,000 to 1,548,000 English square miles; and of the area of the dependencies of China, from 3,012,000 to 3,118,000 English square miles. The population of China Proper was, in 1812, estimated at 361,993,179; in 1842, at 414,686,994; and in 1866, at 450,000,000. The population of the dependencies of China is estimated as follows: Mantchooria, 3,000,000; Mongolia, 3,000,000; Thian-Shannanlu and Thian-Shan-pelu, together, 1,000,000; Thibet, 11,000,000; Corea, 9,000,000; the LieuKhieu Islands, 500,000. At the head of the department of Foreign Affairs is Prince Kong. The Chinese army, according to a recent statement (Moger, "Recollections of Baron Gross's Embassy to China and Japan," London, 1860), consists of about 600,000 men, scattered throughout the empire. Besides, there are about 200,000 Tartars at the immediate disposition of the government. The soldiers, when not on duty, practise some trade at their residences, so that it may be said that China has no standing army. The revenue, according to an official report made in 1864, amounted to £63,934,713. Throughout the year 1867, the Chinese Government had to sustain a hard struggle against the Nien-fei ("Northern ") rebels. The imperial troops several times suffered severe defeats, and in August even the capital of the empire, Pekin, was threatened. Several others of the large cities, as the treaty-ports Chefoo and Hankow, were in danger of falling into the hands of the rebels, though no one was actually captured. The chief of the rebels declared himself emperor. In December, 1867, the imperial troops under Footai were severely beaten by the rebels in Southern Shan-king. One of the English papers, published in China, gives the following information of these rebels, which was derived from a native Christian who had been a prisoner in the ranks of the rebels for fourteen days: The rebel army is in an exceedingly well-organized state. The whole army is divided into fifty large banners, each of the large banners numbers fifty men, but under the command of each large banner are fifty small standards with fifty men each, so that the whole army would amount to 125,000 men. The banner with which the informant had to march was in the centre of the whole army. On the banner was written in very large characters "lauchinwong." This party was commanded by three officers, one commanding officer, one officer of the commissariat, and one officer in charge of the captives. Thirty men of his party were people from Kong si, some from Hunan, and some were captives from Shensi and Shan-tung. No information about intended movements or the whole plan of operations is ever conveyed to any of the common soldiers; each has to look to his banner, when that is put down he has to stop, when it is turned he has to retire, when it is lifted up he has to march. Even the commanding officers of the smaller banners have no other means for learning where they have to march to, but by watching the movements of the large banners, which are directed by one immense standard. The party with which our informant was, had not any engagement with any enemy; the fighting was all done by some of the smaller banners which marched ahead. He says his provisions were uniformly good and regularly supplied to each fighting man as well as to each of the captives. He was always treated well, and never saw any captive who had to complain of ill usage. Many of the soldiers were mounted on mules, and even some children that were among the captives were carried along on the backs of donkeys or mules. He only saw a few Chinese-made cannons, but as he never came near any of the fighting detachments he cannot judge if they have many cannons or not. But he says he half foreign fashion, riding past his company on saw one day four foreigners, dressed half Chinese splendid mules, but he could not see if they were armed or not. No question as to the number of foreigners in the ranks was ever answered by any for a very long time among the rebels said there soldier whom he asked, but a fellow-captive who was were more than a hundred foreigners in the camp. The rebels do not seem to observe any form of worship, at least our informant saw nothing of that kind. Another correspondent to an Anglo-Chinese paper says: "I do not think that you overrate the magnitude of the so-called Nien-fei rebellion, which I am now satisfied has become a similar affair to the Changmow long-haired or Taiping insurrection. One of the descendants of the Wangs, who has Mohammedan and Nienfei adherents, has absorbed, if I am rightly informed, all the elements opposed to the existing order of things." The following extract from the official organ of the Chinese Government, the Pekin Gazette, is important, as showing the alarm felt by the Chinese Government at the inroads made by the Nien-fei in the province of Shan-tung. An Imperial Edict.-Last year, when the Nien-fei rebels forced their way from Ho-nan into Hu-peh, we repeatedly ordered Li Hung-chang and Tseng Kuo-chaun, with the Hsiang and Hwai regiments and the whole available force of the province of Hu-peh, to attack them with vigor, and we were in expectation of hearing that they had been annihilated on the spot and their rebellious spirit quelled forever. These banditti, however, penetrating as far as Hwang-ma and Sui-tsao in Ho-nan, and the districts of Nanyang and Hsiu-lo in Hu-peh, ran riot in every direc tion; and though we have received frequent reports of victories gained over them, yet they have day after day failed to produce any beneficial results. In the 5th moon of the present year (June, 1867) the provincial authorities of Shan-tung and Ho-nan reported these rebels, entering Ho-nan in a vast horde, passed by the towns of Ye-hsien, Hsiangch'eng, Hsu-chow and Lau-k'ao, invaded Shan-tung, and bore straightly through the Show-chang district by way of Chun-chu to the Grand Canal. They have now a second time forced their way into the country about Tai-ning and Ning-yang, and are gradually nearing the capital of the province (Chi-nan-foo). But what effectual resistance have they encountered? The high civil officials in the different provinces, and those in command of the troops, are always talking of the preparations they are making to withstand and crush the robbers, but what is the disgusting reality? When the rebels approach, these officers form no properly-defined plan of resistance; and when they retire, they consider they have achieved their object, if they can only get them out of their own jurisdictions, and in the mean time the treasury is drained and the people oppressed without end. When will the bands of these Nienfei, now in the very heart of the kingdom, be subdued? We have already handed over to the Board Ting Peo-chen, that he may receive the severest punishment that the law allows, for his recent loss of the river-wall, and have ordered the execution, in the presence of the whole army, of Chu-War-mei, the officer in command of the garrison. We now command that Tseng Kuo-chuan, governor of Hu-peh, be deprived of his official button, and that, in company with Li Huo-nien, governor of Ho-nan, his punishment be before all other adjudged by the Board, that all may know the lightness of the sentence hereby awarded. We also command Li Hung-chang strictly to inquire into and report to the throne the names of the several officers who by their feeble opposition allowed the rebels to escape them. With regard to Li Hung-chang himself, the officer specially commissioned to superintend the opera tions directed against the Nien-fei, inasmuch as over half a year has elapsed without any sensible advan. tage resulting from his generalship, he has certainly abused the trust reposed in him by his sovereign; we therefore order him, in expiation of his present disgrace, to win renown for himself by at once taking active command of the troops, and leading them into Shan-tung, where, in conjunction with others, he must scour the country and stamp out the smallest spark of rebellion existing there. Any subsequent failure to cope with the manoeuvres of the sioner and governor a punishment so heavy that they will find it difficult to bear up against it. Tremble and obey! rebels will draw down on the aforesaid commis On March 12th, the American bark Rover, owned and commanded by Captain W. Hunt, of Port Jefferson, Long Island, was wrecked on the southern coast of the Island of Formosa, and the captain and crew massacred. The Island of Formosa has been partially colonized by Chinese within the last two centuries, and the shores of the bay near the scene of the murder are already settled by a mixed race, who are a cross between the Chinese and the aborigines. This mixed race affects constant hostility toward the natives, but maintains a close connection with them, which is strengthened by inarriage ties, and these relatives are known to assist them in their crimes and share their plunder. One Chinaman, belonging to the crew of the Rover, escaped the massacre, and made a detailed statement to the United States consul at Swatoo. He stated that after he reached the Chinese village, on the day following the massacre, he induced a Chinaman belonging to the settlement to go among the savages to persuade them not to kill the officers and crew of the Rover, but allow them to be ransomed. On the return of the man on the following day, he learned that five of the captain's boat were murdered on the afternoon of the attack, and that the other boat had arrived in the night and two of the crew were murdered on the morning of the next day. As soon as the news reached Mr. Legendre, the United States consul at Amoy, he proceeded to Taiwanfoo in the United States steamer Ashuelot, reaching that place on the 28th of April. He wrote to the authorities of the island, stating the circumstances of the massacre, and asking an immediate investigation. Mr. Legendre also asked that the persons implicated in the outrage should be punished according to the Chinese laws, and offered the assistance of the Ashuelot to that end, and the recovery of the prisoners, should there be any in the hands of the As the natives. To this the Taotai, general, and prefect-the highest authority in the island---replied on the following day, relating the action taken in the murder of the crew of a British vessel, but which was afterward explained to have reference to the crew of the Rover, the misunderstanding arising from an error of the linguist at the British consulate, when Mr. Carroll represented the affair to the Taotai. The Taotai said that he knew that all of the crew of the Rover had been murdered. He declined any assistance from the American ship-of-war, but at the same time promised to do every thing in his power. Chinese authorities made no inquiries about the case, Admiral Bell, commanding the United States squadron in the Chinese waters, sent an expedition, consisting of the Hartford and the Wyoming, against the savages. The crews of these two vessels had a fight with the Formosans on the 13th of June. After four hours' advancing against a deadly and at times invisible foe, the party were compelled by exhaustion and loss from sun-strokes to return to their ships. Lieutenant-Commander Mackenzie was killed, but no other casualties were reported beyond those occasioned by the heat. The savages, it seems, were well armed, although no other evidences of intercourse with civilized nations were discovered. They pursued an admirable plan of retiring slowly before the crews, frequently ambushing them in the deep jungle. In his dispatches to the Navy Department at Washington, Rear-Admiral Beil suggests that the only effectual remedy against barbarous outrages on shipwrecked mariners by these savages will be for the Chinese authorities to occupy the island with a settlement protected by military. In July the American consul at Amoy induced the Chinese authorities to send a force of fully 2,000 men to South Bay, which expedition the consul accompanied. The expedition arrived at the limit of Chinese jurisdiction on July 23d. A deputation of Chinese interceded for the savages, and offered security for their future good behavior. The United States consul had an interview with Toketok (head chief of the southern savages of Formosa) and the chiefs of the eighteen tribes, whom he called to account severely. The chief's pleaded as an excuse former massacres by whites, but promised future good behaviour if generously dealt with. The consul insisted on kind treatment of distressed foreigners, which was also agreed to. A fort was erected for the refuge of shipwrecked mariners, and the Chinese became security for the savages' good faith, and signed an agreement to assist foreigners in dealing with the savages. The consul returned on the 15th of October, bringing the body of Mrs. Hunt and some relics of the Rover. Among the most memorable events in the history of China during the year belongs the establishment of a college at Pekin for the study of foreign languages and foreign knowledge in general. The proposition for the |