where the plan has at present been adopted; by degrees it will be extended to others.

The erection of prisons has received aid from the funds you voted for this purpose. The Penitentiary of Santiago has been considerably improved in its regimen and in its workshops.

The Bishop of Ancud has recently visited his diocese, remedying those evils by his zeal, which could not be properly attended to, from the insufficient number of his clergy. A like visit, attended with the same effects, has been made by the Bishop of Concepcion. The archbishopric of Santiago and the bishopric of Serena have recently been visited by their respective prelates.

In each of the bishoprics there are seminaries for the proper education of the ministers of religion; that of Santiago having been liberally assisted by the public treasury, a preference should now be given to those bishoprics which most feel the want of a proper number of clergymen.

Large sums have been applied to the erection and repairing of the churches, and yet the most urgent of such wants are far from being adequately supplied. For some years past the expenses have fallen entirely upon the public revenue, and unless the piety of the faithful be roused and stimulated by the clergy it will be impossible to satisfy the requirements.

The higher branches of education are extending and improving. Being under the direction of the University, encouraged by Government, and better appreciated by fathers of families, a great number of students now dedicate themselves to professions which, although of much public interest, had hitherto attracted but little attention. The courses of studies which are about to be established in several of those branches will lead them in that direction which is of such vital importance to the country.

To the University a section of fine arts has lately been added, comprising drawing, painting, architecture, and sculpture including statuary.

The National Institute and several provincial lyceums have been extended by the appointment of new professors to impart the preparatory education determined by the regulations.

The progress in primary education is very remarkable. The regimen and methods of instruction of the schools have been improved, more extended ideas are communicated to youth, and their advancement is more rapid and sure; but yet these results do not entirely satisfy the always increasing wants in this matter. Primary education cannot be properly diffused and regulated, until the law obliges the State to take upon itself the duty of superior inspection, the municipalities the immediate direction, and private individuals the part which they ought to take; while

all should respectively contribute the funds to form a special and permanent revenue for it. Nothing is more worthy of your consideration. A great part of the evils which afflict society and affect public order, or bring misfortunes upon families and individuals, arises chiefly from ignorance. To root this out by means of a good system of education which shall enlighten the mass of the people, correct their evil propensities, and form good habits, is the most urgently required work that you can undertake. I have already presented to you the result of my own reflections on this subject, and your knowledge will give it that degree of perfection which it requires.

The circumstances through which the Republic has just passed, by paralyzing industry and commerce, have had an unfavourable effect upon the public revenue of last year, and still more so on that of the present. Nevertheless, the proceeds, if applied with prudence and economy, will be sufficient to meet the expenditure, punctually paying the foreign and home debt, without neglecting the other urgent exigences of the service.

The departments which have suffered most are the Customs and the Government monopoly: the first from the paralysation of trade, and the second from the depredations committed upon it by the revolutionists. The sums taken by them from the fiscal offices have been considerable, and particularly from those of the Government monopolies. To re-establish order, and regulate those revenues and also to make the perpetrators of the abuses responsible, the Government has deemed it necessary to adopt various measures. The existing laws contain provisions applicable to such cases, but a special law which shall determine the responsibility of those persons who, under political pretexts, dispose of the public funds and private property, would produce very salutary effects.

A project of reform in the legislation of the Customs, modifying some of the regulations, as suggested by experience, has been drawn up. The particular regulations, which ought to correspond with the general orders, are in course of preparation.

The transit trade with the Argentine Republic is now carried on through the intervention of the Consuls established in Mendoza, Salta, and Vinchina, and the rules drawn up for this purpose have been in operation since the middle of last year. In consequence of this, the Custom-House of the Andes has been abolished; it was the only one in the interior of the Republic. The facilities which this measure affords to this trade, the precautions taken to avoid abuses, and especially the true interpretation of the Articles in the Treaty which exonerate our productions from duties, will extend our commercial relations with the Confederation.

The territorial contribution and the land-tax present difficulties [1860-61. LI.] 2 N

in their collection and recovery. If these two contributions were reduced to one, upon the same bases and payable at the same time, it would free the contributors from many annoyances, and the revenue would be a gainer by the facility with which they could be collected.

The untoward circumstances of the Republic have diminished the issue of the bonds of the Bank of Hypothecation, but their value has not been lessened. Large sums unemployed have been placed in that establishment on account of the security which it offers.

A savings bank for the public employés has been created, and the sums from the national revenue which were granted by the law of June 19, 1858, have been applied thereto. This system will allow Congress to enter upon a prudent course of economy in granting pensions.

I call your attention with pleasure to the conduct of the army during the late political crisis. Its loyalty can only be equalled by its courage, and on repeated occasions it has given honourable proofs of the possession of those military virtues which the Republic looks for in her defenders.

The National Guard has taken part in the fatigues of the army. In the provinces of Arauco, Nuble, Maule, and Aconcagua it has had frequent opportunities of emulating the regular forces.

A part of the police force, particularly that of Santiago which was called into military service, has also contributed effectively towards the pacification of the Republic, rivalling the forces of the line.

All these servants of the State merit its gratitude; some have voluntarily sacrificed their lives, and their widows and orphans deserve to be taken under special protection.

At the middle of last year the army of the Republic consisted of little more than 2,000 men; and in virtue of the authority you granted to me, the strength of the existing corps has been augmented, and three regiments of infantry and some squadrons of cavalry have been raised. A bounty was also given to them, in order that they might the better provide themselves with rations. in the continual movement which their duties required.

Almost all the pupils of the military college have been incorporated into the army. This establishment is now continued with a modification in its plan. The section of corporals has been abolished, and in that of the cadets the opening of a course of study has been provided for.

The high price of provisions renders it difficult for the pensioners to procure subsistence; having been incapacited in the service of the Republic, it is only just that they should receive an augmentation of the allowance which they now enjoy.

The services rendered by the navy have not been less important;

it has co-operated enthusiastically in the military operations, and has given repeated proofs in all its ranks of the good spirit by which it is animated.

The ports of the provinces of Concepcion, Atacama, and Coquimbo, provisionally closed to commerce, whilst in possession of the insurrectionists, were re-opened as soon as order had been restored in those parts.

The navy has been augmented, and now consists of 4 steamers and 4 sailing vessels. Although authorized to part with these last, I considered it prudent to suspend that measure under the existing circumstances of the Republic.

The naval school is now in operation, with the number of students fixed by the regulations. The result of the first steps in this establishment induces me to hope that it will prove a powerful aid to the prosperity and respectability of the Republic. Fellow-Citizens of the Senate and of the Chamber of Deputies,

The empire of the law, and obedience to the constituted authorities have been re-established throughout the Republic, but before arriving at this, we had the pain of seeing anarchy and disorder spreading their baneful influence over the greater part of the provinces, during 4 months. If we have not been able to avoid this misfortune, let us at least take advantage of the severe lesson which the events that we have witnessed present. Do not let us lose sight of the abyss into which evil passions may precipitate us, nor of the calamities which may befall us by listening to chimerical and exaggerated doctrines, and by allowing with culpable indolence, the evil to increase, because for the time we may imagine ourselves free from it, but which may afterwards involve and hurry us along in its course.

If the past events leave a painful impression of those excesses which we did not believe possible to have taken place, they have also given occasion for a demonstration of patriotism which perhaps could not have been expected to produce such acts of disinterestedness, laudable in the extreme. They have also shown that for the happiness of the country, these noble sentiments have prevailed, now, as formerly, and as we always expect of them. Let us, then, strengthen them, let us unite our efforts to fortify liberty in the feeling of duty and patriotism, and when we have done so, we may rest assured that liberty and order will be united, and that the Republic will advance boldly in the march of progress, without the fear of passing through those ordeals which throw it back, and do so much prejudice to its prosperity and good name.

Santiago, June 1st, 1859.

MANUEL MONTT.

CORRESPONDENCE respecting British Claims on Mexico; the temporary Withdrawal of the British Mission from the City of Mexico to Jalapa; and the Robbery of Specie belonging to British Bondholders from the House of the British Legation.-1860, 1861.

(Extract.)

No. 1.-Lord J. Russell to Mr. Mathew.

Foreign Office, August 24, 1860. It might have been anticipated that the Government at Mexico which has always professed a desire to be on friendly terms with Her Majesty's Governmeut, would have endeavoured to cultivate friendly relations, and even for its own sake, if not moved by a regard for international law and comity, would have listened to the disinterested counsels of Her Majesty's Government, and would have respected the persons and property of Her Majesty's unoffending subjects.

Her Majesty's Government have been disappointed in that anticipation; the representations and remonstrances of Her Majesty's Government more especially as regards the imposition of the tax upon capital, are entirely disregarded, and not a month passes but further outrages are committed upon British subjects, and further spoliations are perpetrated upon British property. I do not speak of the sufferings of the Mexicans themselves, or of the atrocities committed by various chieftains upon helpless women and children; such dark deeds affect the character of the whole nation, and must sooner or later bring their own retribution.

Her Majesty's Government have had, however, to consider whether it was fitting that they should continue to hold relations with a Government under which such things are tolerated, and Her Majesty's Government, after anxious consideration, have come to the conclusion that they shall best consult their own dignity, and the rights of British subjects, and perhaps even the interests of the Mexicans themselves, by withdrawing Her Majesty's Legution from the capital of the Republic.

In instructing you to take this step, Her Majesty's Government do not consider it desirable to direct you to proceed to Vera Cruz. Her Majesty's Government are above all things anxious to preserve a strict impartiality between the two contending factions. The Government of Señor Juarez, it is true, has not been so utterly regardless as has been that of General Miramon of the representations of Her Majesty's Government, but that result may be owing in some measure to the fact, that at Vera Cruz a British squadron has been at hand to enforce redress as often as occasion has required, and even with this restraint on their actions, the so-called Con