forts for peace. I said to him in substance that I was without instructions touching the matter suggested by him, but that, while I knew that the United States Government felt a deep concern for the welfare of all the American republics, and that it regretted very much the present conflict and would rejoice at its termination, still I did not believe that it would, in the absence of knowledge that its good offices were desired by all the belligerents, or until it should have some good reason for believing that an effort by it in behalf of peace would be crowned with success, propose to meddle in the controversy in any manner. Subsequently, when your instruction came to hand, I was more than gratified to observe that my expressions were in harmony with the views of the State Department in so far as the Department had seen fit to make them known. Dr. Arosemena is not hopeful of accomplishing anything now, and will leave here in a few days for Lima without formally tendering the good offices of his government. He has private assurances that the services of his government are not desired by Chili at present. This country was never more confident of success in the war, apparently, than it is now. The government, as now organized, with Señor Santa Maria at the head of the cabinet, represents fully the aggressive war spirit of the country. The government has the confidence of the people in so far as the conduct of the war is concerned, and all are sanguine regarding the result. And yet I judge from the tone of the Peruvian press that the allies are quite as confident that they will ultimately triumph. While matters continue in this condition I am at a loss to understand how our government can possibly make itself useful in the direction of peace. I am sure that no proposition which would admit of the reoccupation by Bolivia of the territory between the 23d and 24th parallels, or any considerable part thereof, would be accepted by Chili, no matter where the proposition should come from. The principal cause for the declaration of war against Peru was the secret treaty between Peru and Bolivia. Chili understands this compact to have originated in Peru's hostility to her, and I am led to infer that the "security for the future" mentioned contemplated an abrogation of the treaty and an assurance that a like one would not be entered into hereafter. If Chili should, however, get possession of the Tarapacá district, I apprehend that it would be interpreted to mean much more. There can be no peace until at least one of the parties to the conflict shall show a disposition to abate some of its pretensions. I am confident that Chili is not so disposed now. If the allies are, I do not know it. The fact is, the belligerents have not sufficiently felt the horrors of war to incline them in the direction of peace. Up to this time the conflict has been confined to the sea. There has been no engagement worthy the name of battle by the army, and there must be, in my judgment, at least one serious, bloody engagement by the land force ere they will be found ready to listen to friendly suggestions from outsiders. The Chilian land forces now number about twenty-five thousand men. They have been supplied with new arms of the most approved patterns, purchased in Europe. The men are regarded as good soldiers, and there will be much disappointment here if they fail to render a good account of themselves in the engagements which must, sooner or later, take place. The capture of the famous turreted monitor Huascar by the Chilian navy has produced here the most unbounded enthusiasm. This vessel is now in the Valparaiso harbor undergoing repairs. This naval vietory leaves Chili undisputed mistress of the sea. It remains to be seen whether she is to be as fortunate on land. Her position is undoubtedly much stronger than it was prior to this naval engagement. The government is anxiously watching the course of events in the Argentine Republic. There is much hostility there to Chili, and it is feared that that country may yet drift into an alliance with Peru and Bolivia. SIR: In my No. 67 of June 24 last, I sent to you a copy of my No. 23 to the minister of the United States at Lima, in relation to the status of foreign-built ships owned by Americans, and questions pertaining thereto. Having had occasion to address that minister farther on this subject, I deem it well to communicate to you the substance of my instruction to Mr. Christiancy, in the form of a further instruction to your legation, to the end that no occasion may exist for any failure of accordance in the premises between the diplomatic representatives of the United States at Lima and Santiago. This department in its instructions (Nos. 65 and 67) to your legation, and in Nos. 7, 11, and 23 to the legation at Lima, has already defined the principles which should guide them in the determination of these questions, and can now do little more than reiterate and reaffirm the leading principles hitherto laid down, relying upon your judgment and discretion for their proper application in matters of detail, as it is manifestly impracticable to frame an instruction which shall meet every possible incident as it may arise. The right of Americans to buy foreign-built vessels and to carry on commerce with them is clear and undoubted. A reference to paragraphs 220 and 221 of the consular regulations will show how perfectly this right is recognized, and how clearly the exercise of it is defined. It has existed ever since the origin of the Government. The fact that it is possible for collusion to take place between consuls and American merchants in foreign countries, in connection with these transactions, is not a sufficient reason to invalidate a right which exists independently of statute law, and which is advantageous to the interests of American commerce and enterprise. As a consequence and adjunct of this right, the flying of the American flag cannot be absolutely prohibited. As before stated in the instructions, if circumstances justify on the part of the consular officer an opinion that the sale was honest, and that the vessel has really become the property of a citizen, she may properly fly the flag of the owner's country, as an indication of such ownership and an emblem of the owner's nationality. The duty of the consul in reference to these transactions is clearly enough indicated in Article XVII of the consular regulations. He is forbidden by law to grant any marine document or certificate of ownership, but he may properly make record of the bill of sale in his office, authenticate its execution, and deliver to the purchaser a certificate to that effect, and also certify that the owner is a citizen of the United States. A considerable discretion and responsibility rest upon consuls in regard to determining the good faith of such transactions. They are not to conclude, as a matter of course, that all such transactions are genuine and honest. They are to take notice of any circumstances which would indicate that the transfer is fraudulent, and in all such cases it is their duty to refuse the certificates referred to. But, on the other hand, they are certainly not required to consider the mere fact of the transfer of a foreign-built vessel to an American citizen as an evidence of bad faith. The presumption is rather on the other side, as in all transactions in civilized countries, and in the absence of any indication of fraud a sale in a regular way, with the usual business formalities, is to be regarded by the consul as made in good faith. When such transactions have been perfected, and when a consul, thoroughly satisfied of the good faith of the parties, has given his certificate of the transfer of a foreign-built vessel to an American citizen, and a vessel furnished with such consular certificate has been regularly cleared from the port where the consul referred to is stationed, and has come within the jurisdiction of another consular officer or diplomatic rep resentative of the United States, it should require very strong evidence of fraud to induce the second consular officer to deny the American character of the vessel, to refuse the regular and necessary clearance to enable the vessel to pursue its voyage, and still more to insist upon such a vessel hauling down its flag. In cases where a consular officer or diplomatic representative is thoroughly convinced that a vessel has no right to an American certificate of sale, and consequently no right to the use of the American colors, he will be justified in going to the extent indicated; but this discretionary power should be used with the utmost caution and reserve. Vessels in these circumstances, of course, cannot claim the privileges and immunities and the thorough protection which are accorded to regularly registered American vessels plying between ports of the United States and those of foreign countries. The American owners domiciled abroad, engaging in business of this sort, take upon themselves all the risks incident to such traffic. If they are seized by the war vessels of one or the other belligerent, and carried into courts of admiralty as prizes, they have no right to demand from the diplomatic officers of the United States that they shall be accorded anything more than fair treatment in such courts; that is to say, the fact that they are provided with consular certificates of American ownership secures for them only presumption that such is the fact, and they are not necessarily for that reason entitled to demand from the legations of the United States anything more than that protection afforded to every other species of property belonging to American citizens domiciled in foreign countries. In the absence of any statutory provisions in regard to these important and delicate matters, it seems to be the duty of the Executive branch of the Government to prevent as far as possible any damage or danger to American interests, and, in addition, to guard and cherish to the extent of its power the right of neutrals to carry on honest commerce between nations engaged in hostilities, reducing to the least possible degree the hinderances to neutral trade, which inevitably arise from a state of war. You will therefore, in all cases that may arise, keep these considerations constantly in sight, and apply them with that judgment and discretion which have hitherto won the approval of the President. The action of the legation at Lima in the matter of the "Itata" was com mended, because there seemed sufficient reason to doubt the regularity of the transfer in virtue of which she was displaying the American flag. If, as has been intimated, that vessel and her consorts, are now about to resume our flag, and other merchant vessels are preparing to pursue the same course, it will be the duty of the consul, under the direction of the legation, in that country where these ships first display American colors, to inquire strictly into the circumstances of the alleged transfers, and refuse or grant clearances according to the merits of each particular case. This being done, it is obvious that the act of one American consul or minister should not be challenged or reversed by another, except upon the strongest proof of mistake or collusion. I am, &c., No. 111. WM. M. EVARTS. No. 83.] Mr. Evarts to Mr. Osborn. DEPARTMENT OF STATE, SIR: I have received a dispatch from the minister of the United States at Lima, with a copy of a letter from the consul at Lambayeque, Mr. Montjoy, from which it appears that certain property of the American Oil Company, at Talara, which is described as "exclusively American property," and other like effects at the Lobos Islands, have been destroyed by the fleet of Chili; also that "a launch belonging to an American steam tug-boat was captured and taken away by the Chilian vessels, although made fast to the steamer and flying the American ensign." It is understood that these facts are already within your cognizance. You will bring these acts to the early attention of the Chilian Government, and so represent the matter as may distinctly show, without however any appearance of captious opposition to the legitimate processes and needs of war, that the United States expect the equitable rights of their citizens under treaty and the law of nations to be respected to the full, as befits the relations between two such friendly powers. I am, &c., No. 112. WM. M. EVARTS. No. 131.] Mr. Osborn to Mr. Evarts. LEGATION OF THE UNITED STATES, Santiago, Chili, February 25, 1880. (Received April 10.) SIR: Under date of the 3d instant the minister of war and marine issued an order to the chief officer of the Chili squadron regarding the course to be pursued in the further prosecution of the war, an extract from which, with a translation in English, I herewith inclose. It will be seen that this government proposes to adopt more vigorous measures than it has heretofore had recourse to in the prosecution of the war, and that to that end it directs the bombardment and destruction of all towns on the Peruvian coast which have prepared cannons for defense, and the destruction of all moles and other property in the various ports of the enemy used in the loading aud discharging of cargo. To say nothing of the misery and suffering which would necessarily ensue from a rigid execution of this instruction, it occurred to me that neutral rights and interests were liable to become very seriously jeopardized by it, and I therefore suggested to my colleagues of the diplo matic corps that it might be well to consider the propriety of addressing the Chilian Government on the subject. The result was a meeting of the corps, and, after a full discussion, an understanding that each representative should address the Chilian Government concerning the interpretation to be placed on the order in question. A copy of my note is herewith inclosed. You will observe that I have urged that bombardment should only be resorted to as against towns which possess some importance in a military sense, and that even then sufficient notice should be given to enable non-combatants and neutrals to remove themselves and their property from danger. You will also have observed that I have protested against the right of Chili to destroy the moles and other means of loading and discharging cargo on the enemy's coast, except where such destruction appears to be necessary in view of the military situ ation. An important fact in connection with this subject is that a very large proportion of the population, and even a larger proportion of the property, in the various towns on this coast, whether in Chili or Peru, is foreign; and it is upon these people and upon these interests that the severity of this measure must, in a great degree, fall, if its execution is insisted upon. Many of these people are Americans. If the government should listen to my suggestions, much ruin would be avoided, and I am not without hope of such a result. My note is now under consideration at the foreign office, as are also those of the other ministers, and I anticipate a reply soon. I have, &c., THOMAS A. OSBORN. [Inclosure 1 in No. 131.-Translation. Extract from order of minister of war and marine, February 3, 1880. So, then, now that it is manifest that the enemy did not duly appreciate the humanity of our conduct, I believe that our hostilities must be conducted with greater severity. In virtue of this, all towns on the coast that are protected by cannons should be bombarded and destroyed; all railroads that are serving the enemy in the transportation of troops and elements of war should be fired upon; and all moles and boats employed in the ports of the enemy in loading or discharging cargo should be destroyed. In a word, our standard of conduct hereafter must be to do the enemy all possible injury, without neglecting anything that is authorized by the law of nations, until it is made to feel the necessity of obtaining peace. Any other course will result in prolonging the war without limit, and will greatly increase the sacrifices which the country is making to sustain it. If heretofore it was believed that great severity in conducting our hostilities was. until a certain point, unnecessary; now we have sufficient data to believe that we shall not oblige Peru to lay down her arms except by reducing her to absolute want, and making her feel, in the property and interests of her inhabitants, all the burden of the war. [Inclosure 2 in No. 131.] Mr. Osborn to Señor Amuñátegui. LEGATION OF THE UNITED STATES, and SIR: I find published in the Diario Official an order from the minister of war marine of your excellency's government issued on the 3d instant to the commander |