THE WAR BETWEEN CHILI AND PERU.

(Home News, Sept. 26.) Popular agitation, is increasing ngaiast Senor Santa Bfaria, Minister for Foreign Affairs, and special war delegate to tho base of operations. Several Chilian papers advise the President of the Republic to resign, and demand that the conduct of tho war should be transferred to an abler chief. Sorious riots have occurred at Santiago, arising from popular discontent at the conduct of tho war. The populace barricaded tho Alamcda do las Delicias, and shouted, "Death to the traitor Ministry!" A conflict ensued between the troops and the people, m which two persons were killed and several wounded. Tie President of the Chilian Republic is reported to have fled to Vina del Mar, near Valparaiso. ■ The naws that the Government of the United States had offered to mediate between Chili and Peru, is confirmed. Intelligence received from-Valparaiso states that the Peruvian ram Huascar has captured : three fresh prizes, namely, two vessels laden with coal, and with a cargo of copper. The crisis m tho Chilian Cabinet still continues. Reports from Lima to July 30 contain the following particulars of the capture of the Chilian transport Rimac by the Peruvian men-of-war Huascar and "Union. Tho Rimac was richly freighted. Besides the cavalry regiment, numbering 240 men, there wore on board 215 horse», 300 rifles with cartridges, large stores of ' clothing for' the troops at Antofngasta, 400 tons of English steam coal for the Chilian squadron, and a quantity of food and munitions of war. The vessel recently cost the Chilian Government £70,000. The Rimac was commanded by Captain Ignacio Gana, of the Chilian nary, and armed with four 32---pounders. When the* Union first sighted her the Rimac was steaming about thirteon knots, but the superior rapidity of the : Union soon brought tho chaso within gunahot, and a small 9-pound Whitworth gun m the bow of tho Union opened fire on the Chilian. The Rimac fired one or two shots and then suddenly hoisted a white flag and stopped her machinery. Officers were sent on board to take possession. Jnst then tho Huascar came up, end from the two Peruvian vessels a prize cre.w was organised for the Rimac, and sho, with her captors, reached Arica on July 25. The ! capture was made off Monte Jara, a short distance to the southward of Antofagasta. j The cavalry regiment is one of the crack corps' of the Chilians, commanded by Colonel Balnea, nephew of the President of Chili. When captured the transport waa making her way to Antofagasta to land the troops, and then would have proceeded to Iquique to deliver the coal and stores for the Chilian squadron, which is still so gallantly employed _m blockading the port, while Peruvian vessels greatly inferior m strength and numbers work both north and south. The Rimac, with her cargo,- is estimated to be worth 1,000,000 dols. In the Peruvian Congress, opened on July 28th, by the Vice-President of the Republic, General La Puerta, the President, declared that he would do . everything possible to avoid a further issue of paper money, but stated that the condition of the Exchequer was not satisfactory, Dr Jose Maria Quitnper has stuscce led Don Emilly del Solar m the Ministry as Secretary of the Treasury. Don Solar was compelled by ill-health to resign. The new Minister at once declared- in force the decree for the payment of all Customs duties m silver or its equivalent, and suspending the service of the sinking fund on the Home"Dobt. Writing from Tocopilla, on Iho southern border of Bolivia, an English correspondent describes some interesting incidents. Tho writer s;iys : — "On Aug. -sth the Chilians landed a quantity of arms and ammunition and two field-pieces hero, and left them on the mole, a structure which is English and neutral. Next morning the Peruvian gunboat Pilcbmayo steamed into the offing. Sho did not knock tho mole out of existence, but landed a boat under a flag of trace •at the aamo mole to inform the port captain that all the launches alongside were to bo destroyed,; and, notwithstanding the ngent of the English house which owns both, mole and launches protested, and claimed immunity for them as English property, the launqhes, or as many of them as the Peruvians found,' were set on fire, and tho Pilcomayo steahiod away. Had her captain been a little more deliberate he would have captured the Chilian warstorea, and discovered that by judicious scuttling, beaching, and buoying tho managers of tho English house had saved nino out of thirteen boats. Tho Chilians dragged their cannon and ammunition up to tho rear of tho town, where the enemy may hear of them heroafter. The Pilcomayo then effected the destruction of a small ship which was sailing under the Argontino flag, but carrying Chilian papers. She gavo the crow quarter of an hour's grace, 'and then Bot the barque on fire, and sent several shots through her. The Huascar is ft terror all along the coast. Unfortunately, she docs not remain long enough m company with a formidable adversary to meet with' an adversary to meot with an accident. She was steaming off Iquique n few days ago, and brought to a transport freighted with coal. Sho was Chilian, so the Huascar called on her to surrender, and failing compliance sent a shot into her. The unarmorod corvette Magellanes appeared on Iho scene, howover, and engaged tho big Peruvian, exchanging Hovoral shots with hor. Ono 1501 b missile ponotratcd tho Peruvian's armor. Tho Huascar mado several awkward attempts to : ram tho corvotte. By this time tho sound of tho, firing had brought up tho Chilian ironclad Altniranto

Cuclirane, and at sight of hor the Huasce sheered off at full speed. Ik was nl ra;'s dnrk, r and tho •' Hunscar, with' b'ulu'ivk lowered and painted lead color, had n diflioulty m escaping. I hope she nw not be our next Peruvian .visitant, ns r th comniiindant has his orders •from Aiift fugaata that. next time the shipping hero i threatened ho is to fire, on the enemy' boats. 'It was for firing on Bhips' boat that Captain Simpson, of the Almiranti Cochrauo dostroyod Pisagua and Mol lendo, and with this fate iv prospccl peoplo on the spot would prefer ti tomporiso with tho enomy. In ' acknow ledgomont of the unsuccessful attempt a' Iqnique.to blow up tho Blanca Eucrhdt with torpedoes, tho Chilians bombardoc that town, notwithstanding they had captured the torpedo-boat. The privileges of an Englishman here an but . scanty. In ono of the ports re ccntly taken from the Bolivians by tin Chilians an Englishman who has been m residonco ten yeara was arrested and nc cused of being a Peruvian Bpy. Aftei being detained some hours, examined, and threatened/ he' was allowed at large on parole. ' The Englishman wrote a statement of the caso and appeal for assistance, which was signed by the chiol inhabitants and forwarded to the senioi officer of the English navy at Iquique. A reply came from the captain of the Turquoise regretting his inability to inquire into the matter, he not being senior officer on this part of the Pacific station. The Pelican, however, arrived m Valparaiso'noon after, having on the passage passed the port without calling. In war time the accusation of b?ing a spy is a serious one. Fortunately, the Chilian Government acted with more promptitude than 'the representatives of our navy. When complaints of the proceedings of their official were, forwarded to headquarters, a despatch was at once sent dismissing him from his post." .Writing under date Aug. 6, the Lima correspondent of the Panama Star and Herald says : — . . ' :, " The blockade of Iquique has been abandoned at last by the. Chilian vessels, after nearly five months of inactivity and a decided loss of valuable time. The news was sent up by General Prado on the 3rd intst On the Ist, and probably m anticipation of some such movement on the part of the enemy, as it was. surmised that the recent visit of the Huascar and Union to the Chilian coast and the capture of the Riraac . would cause a change m the war programme of Chili, the monitor Manco Capac, with the transport Oroya, was sent, south. It seems probable that the vessel will be stationed at Iquique, and 'consequently if any ro-cstnbliahmont of the blockade is attempted the Chilian ironclads would again have to be employed ; but no one imagines that such is the plan of Chili. At the date of tho last advices all the vessels composing tho Chilian squadron were anchored at Antofagaata, .with the ' exception of tho O'Higgins and Covadonga, undergoing repairs at Valparaiso. At Antofagasta the Chilians have a number of transports, and it is supposed that the long heralded descent on some portions of tho Peruvian coast will now be attempted. Popular feeling m Chili has reached such a degree of discontent at the progress of the war that some active operations must be resorted to m order to divert public attention, and also to avoid internal dissensions, ' if such mdeed : have not alroady taken place. As before mentioned, tho coast of Peru at the vulnerable points is pretty well defended^ Tho allied army has not moved from Tarapaca or Arica and Tacna, but it )b reported ready for action at the first notice. The Rimac has already afforded good service under her new flag, carrying troops and arms from Mollendo to Arioo. Tho Comblain. rifles captured on board have been turned over to a Peruvian battalion. The prisoners are at work on the Rica fortifications, where the Rimac's four 32-pounders have been placed m position, but the officers who arrived here last week m the Pilcomayo wero sent up tho Oroya line to Tar ma on the 2nd inst. Bolivia ,has addressed a circular to her diplomatic and consular agents abroad, directing them to embargo all the guano nnd nitrate of soda exported from Antofagnsta and Mexillones, m Bolivia, since the occupation by the Chilians m February last. It seems to be a question if such an embargo can be enforced. " The Hansa," says the Star and Herald, " now on her way to Oallap, has been sent, it is reported- from Chili, to back up the German Minister m his demands for the release of the German steamship Luxor. That. such a demand has been definitely made wo have no information, except from Chilian sources, which, under the circumstances, we can scarcely regard as reliable, ' The Luxor has bcon formally condemned as a lawful prize, and, probably, before the Hansa arrives to rescue her from tho limbo m which ,she is held, will fly the Peruvian flag and bo ongaged m service as a transport. The decision of the Court m the case is published, and the captain's sworn statement that ho was not aware of the contents of the cases is held as invalid, on the general principle that ignoranco of tho law or the fact docs not shield an offender. Tho fact is also alleged that tho captain of tho steamer Luxor knew m Monto Viedo of the state of war which existed between Chili and Peru. The Court therofero decided that she has brbkon the rules of neutrality and has lost her title as a neutral ship by engaging to carry articles contraband of war, among which are ranked m the ye ry first placo, according to tho gonorally admitted classification, arms and ammunition. The as3ovcralion 'of tho captain that ho was unaware of the natjure o£ his cargo is denied by tho testimonyof somo of his crow. Adolfo Lingo, a seaman, testified that at the timo of embarking the goods m Monto' Video, for ahipmqnt to Valparaiso two of tho cases which tho Luxor received woro broken and it could be seen they contained rifles arid ammunition. The Court also observes: —That as there does not exist between Peru and the German Empire 'any treaty which determines the manner m which vesse's like the Luxor should bo treated, the laws which, as a sovereign and independent State, she herself has dictated for the time of war must bo put m force; and that iti conformity with tlio Ist articlo of tho ' lieghmonto' of tho 29th April, 1822, there is just cause for trial and for a vessel to bo declared a lawful prizo if, though belonging t-> a neutral or friondly Power, sho convoys to tho enemy's territory any articles contraband of war. For such roasona and othors sot forth by tho Ministerio Fiscal tho Court declares that tho steambr Luxor belonging to tho German company cnllod Kosmo3, and now detained, is a go6d and lawful prize, and inasmuch as.it was seized by order of this Government it is hereby adjudged to belong totally to . the State.' -It remains to bo seen what course will bo 'adopted by Germany. .That no' claim for the restoration of the ship to, her owners will bo presspd is vory unlikely, as Germany is not m tho habit of vacillating m a matter of such importance. It would bo unpleasant for Peru to havo a Serious quostion with a first-class Power at that time."