No. 291.
Mr. Nelson to Mr. Fish.

No. 518.]

Sir: In consequence of the defeat of General Neri, and the taking of Zacatecas by the insurgents, the government judged it prudent to evacuate Aguas Calientes, which was immediately occupied by rebel forces.

Two States are, therefore, lost for the present to the government. The revolutionary governor of Zacatecas is the ex-deputy Trinidad Garcia; and General Gomez Portugal, deposed a few months since from the government of Aguas Calientes, has been reinstated by the rebels.

It is now believed that General Guerra will march from Zacatecas upon Guadalajara. If so, there is serious danger that that city will be taken, as its garrison is small, and there are numerous bands of insurgents throughout the State of Jalisco, which would swell the numbers of the attacking force.

Governor Pesqueira, of Sonora, who was marching against Mazatlan with a respectable force, has been defeated by the rebel general Marquez, and obliged to return to Sonora.

The government forces sent from Manzanillo against Mazatlan are too few to accomplish their object unaided, so that that important port will still remain in the hands of the rebels for a considerable time. A shipment of arms for the revolutionists of Mazatlan, consisting of 3,000 Enfield rifles, which was sent from New York via Panama, was, a few days since, seized by the custom-house at Acapulco, from on board the Pacific mail-steamer Montana.

Public attention is now chiefly occupied with the approaching struggle in San Luis Potosi and Zacatecas. General Rocha marched northward from this city, with three thousand men, probably en route for San Luis. He was to reach Queretaro to-day, and may arrive at San Luis a week hence, but, meanwhile, that city is in considerable danger of being taken by the northern revolutionists.

The present whereabouts of General Porfirio Diaz seems to be unknown, to all parties, it being a month since he disappeared from the neighborhood of Orizaba. Widely different rumors are in circulation, but it is most probable that he has arrived in the State of San Luis. His total failure in Oaxaca has, however, lost him all prestige as chief of the revolution. [Page 392] Treviño and Guerra no longer speak of Mm in their manifestoes, and it is said that his revolutionary plan of the Noria has been cast aside for another, the terms of which have not yet transpired.

Our news from the northern frontier is completely cut off, but a conflict is evidently imminent (if it has not already taken place) between Generals Cortina and Quiroga, for the possession of Matamoras.

Amid the ravages of civil war, several public improvements are being pushed forward. Work was commenced on the Toluca narrow-gauge railroad on the 5th instant, and on the proposed carriage-road from Queretaro to Tampico on the 6th instant.

President Juarez, through Secretary Romero, has, by virtue of his “ample faculties,” promulgated a new tariff, the publication of which is not yet complete, as also a law upon internal revenue, and upon the use of stamped paper, and has celebrated a contract with the Panama Railroad Company for the establishment of a line of steamers to touch at several additional ports of the Pacific.

All the above measures will be more fully stated in my future dis-spatches.

I am, &c.,

THOMAS H. NELSON.