The Sun.
London, England, 1866-02-15 00:00:00

SPAIN AND CHILL

SANTIAGO, Jan. 1.
The new commander of the Spanish squadron has sus-
pended the blockade of Talcahuano and Coquimbo and
concentrated his forces at two ports—viz., Valparaiso and
Caldera. At the former port ho has three frigates; at the
latter he has the Numancia and another frigate. He him-
self has taken the command of the Villa do Madrid.
As I foresaw in a former letter, the blockading squadron
will soon be converted into a blockaded squadron. The new
Government of Peru is most hostile to Spain, and is only
waiting for certain contingencies to declare war against her
In the meantime the Peruvian authorities have prevented
the vessels laden with provisions for the Spanish flotilla on
the Chilian coast from sailing from Callao, and as soon as
the whole coast of Peru is closed to the Spanish frigates
they will be under the necessity of sending for provisions
to California or Buenos Ayres. Their situation is desperate
enough, the crews are said to be in a very bad condition,
and there are even symptoms of insubordination on board
some of the ships. Poverty and famine will, therefore, be
one of the causes of the withdrawal of the Spanish flotilla,
in spite of the arrogant assurances of some of the Madrid
journals to the effect that money, transports, and provisions
are on the road to Chili in great abundance. Such is
Spanish mismanagement and peculation, that it is said the
six or seven ships they have on the coast entail on the Go-
vernment of Madrid an expense of six million dollars per
annum. They are mistaken if they expect to get this sum,
or any part of it, out of Chili, although this might have
been their prime object.
Our hopes, therefore, are that the Spanish Government
will perceive their error and folly ; that they will open
their eyes to the imminent perils they are about to encounter
in Cuba and in all South America ; to the disgraceful posi-
tion in which they have placed themselves ; to the difficul-
ties of their situation at home, political and financial ; and
last, but not least, to the impossibility of obtaining any
material advantage over Chili, determined as she is to carry
on the war to the last extremity.

The timely retreat of the Spanish forces will cause a great
saving of life and money,andput an end to the Chili-Peru-
vian alliance, of which I spoke to you in my last. This
alliance is a fait accompli. The navies of both countries
are to be combined against Spain ; tho expenses are to be
equally divided between the allies wherever the forces may
have to operate, but the payment and liquidation of ex-
penses are to be effected at the end of the war. The treaty
is at present a secret, but it will be published in a month
or so in both countries, or, at least, its principal stipulations
revealed.

The Spanish Ministers in Ecuador and Peru have loft
their posts, probably fearing to get their country into fur-
ther squabbles. As regards the Argentine Republic, al-
though the people have shown great sympathy with Chili,
President Mitre has hitherto expressed himself favourable
to Spanish interests. He is engaged in an expensive and
ruinous war with the neighbouring Republic of Paraguay,
and cannot lend much attention to Chilian affairs ; but it is
feared that the difficulty of the enterprise he has launched
into and the lukewarmness, or rather indifference, with
which he has lookod upon the cause of Chili, may produce
a commotion in the already disturbed and jealous States
that compose the Republic of La Plata.

The exportation of copper ores and of agricultural pro-
duce continues on the same footing as before the blockade.
The crops are pretty abundant this year, and we may be
able to supply Peru and Australia to any extent:

The import duties having been abolished in theportsnot
blockaded. in order to stimulate commerce, it has been
found that the measure has placed the Valparaiso holders
of foreign wares in a comparatively inferior position, and
it is proposed to put on the import duties again, if not in
the same proportions as before, at least to a certain degree.