The Sun.
London, England, 1865-07-21 00:00:00

THE SUN, LONDON, FRIDAY EVENING, JULY 21, 1865,

SOUTH AMERICA.

BUENOS AIRES, June 10.

The Paraguayan war still continues. A slight
brush has already taken place between the Argen-
tines and Paraguayans at the city of Corrientes, re-
sulting in the complete temporary defeat of the
Paraguayans, who were numerically superior to the
Argentines. The Brazilian squadron is anchored
off the mouth of the Paraguayan River, and effectu-
ally blockades Paraguay. The Brazilian army,
which has remained so long inactive, has at last re-
ceived orders to march. General Urquiza, at the
head of his Entre Riano warriors, is now on the
Correntine frontier, and offers a powerful barrier
against a ruthless band of invaders, which, we re-
gret to say, has laid desolate the once flourishing
province of Corrientes.
The invasion by the Paraguayans was so sudden
and so unlooked for that the Argentine nation has
been forced into this war under every possible dis-
advantage ; but, although as yet two months have
not elapsed since the seizure of the Argentine
steamers by the Paraguayans, such has been the
activity of President Mitre and the patriotism of the
people, that in this short time from 15,000 to 20,000
men have been got together, armed, equipped, and
accoutred, and are now marching under their leaders
to drive the raiders from Argentine territory-. There
does not appear to be the slightest chance of peace
until the present Paraguayan Government is upset,
and a new and more liberal one established in its
place, as the insult which Lopez has paid this coun-
try is so great, and the life and property which he
has destroyed so enormous, that President Mitre
can make no terms with either Lopez or his Govern-
ment. General Flores, the provisional governor of
Montevideo, has resigned his post, and taken com-
mand of the Oriental allied force.

He marches on the 15th for Uruguay, and will in-
corporate with the Brazilian army at present en-
camped on the banks of that river. President Mitrb
will take command in person of the whole allied
army early next week, and, in fact, we may say
that it is only now the war is properly commencing;
but we feel most sanguine as to the result, and
doubt not that the Paraguayans, the moment they
find a powerful, well-organised army led on by Pre-
sident Mitre to meet them, will retreat much faster
than they advanced, and seek safety in the impene-
trable fastnesses of Paraguay.
The iron bridge of the Buenos Ayres Great
Southern Railway over the Riachuelo has been in-
augurated, the president and governor attending.
The Sanborombon Bridge is rapidly approaching
completion, and so actively have the works of this
railway been pushed forward that it is confidently
expected that the line will be open to Chascomus in
the month of September.
The Government of Montevideo has recently
concluded a very important concession, or contract,
with Messrs. Beare and Rodriguez, for the con-
struction of a line of railway from Montevideo to
D uranzo.

Since peace has been restored to the Banda Ori-
ental, that country, under the mild and conciliatory
administration of Goyernor Flores, has made great
progress in the right direction. Several schemes of
the greatest importance have been laid before Go-
vernment, and all have been favourably received.
There is an evident wish on the part of the Govern-
ment to heal the wounds of revolution, and to aid
every enterprise calculated to improve and benefit
the country.
In Buenos Ayres there is little alteration in the
state of affairs since the sailing of the last packet.
Owing to the war every description of army cloth-
ing is in active demand, and commands good prices,
but the finer classes of dry goods are neglected.
Our currency has suffered serious depreciation, in
prospect of the scarcity of gold, but the Bonds of
the National Government are firm, and even looked
for. In consequence of the resumption of specie
payments by the Montevidean banks, gold has been
exported to that city. The Mana Bank of Monte-
video holds an enormous quantity of specie in its
vaults ; the circulation of its notes in Montevideo
alone is close on four millions of patacons, whilst
the notes of its different branches iu the Argentine
Republic are now, owing to the scarcity of bolivi-
i anos, the only currency in the provinces. The pro-
posed amalgamation of the London and Brazilian
Bank with the Mana Bank has been well received
here ; it cannot but prove most beneficial to the
River Plate, and indeed the stockholders of the
Brazilian Bank have every reason to congratulate
themselves on such an arrangement, which at once
secures to them the splendid business and connec-
tion of the Mana Bank in the River Plate.

The sheep-farmers in this and the adjoining pro-
vince , are all doing well ; the season could not be
more favourable, abundance of grass everywhere,
and the rivers and lagunas full to overflowing.
Sheep have, however, sensibly declined in value
since last shearing, owing to the great stringency of
the money market. Foreigods refuse to sell at
present prices,but native sheep-farmers are realising,
and sheep auctions are now an everyday occur-
rence.