4^- — The Panama Star and Herald of J uly 22nd has a story of the loss of the Chilean transport Loa in Callao Bay. A Peruvian officer constructed a launch, put a torpedo into it and over this put a false bottom resting on springs, kept down by the weight of the cargo ; then he loaded it with a very choice assortment of fruits, and towing it out towards the blockading squadron before daylight, sot it adrift. All day it floated about, but towards evening, fearing it would fall into neutral hands, a boat was sent out to bring it back. The Loa, seeing a boat from shore making towards a neutral vessel, caught sight of the launch and turned towards it. The Loa lowered two boats, brought the launch alongside, and the discharging commenced. As the weight in the launch diminished the machinery in connection with the torpedo was set on fire, and in a moment three hundred pounds of dynamite were exploded. The Loa was almost lifted out of the water, and appeared enveloped " in a mass of .flame, which resolved itself into dense clouds of smoke. When this cleared away the vessel appeared not to have suffered, but suddenly she went down by the stern and disappeared. Ships of war and non-combat-ants quickly lowered boats and picked up about forty men struggling in the water, of whom, it is probable, many will die. At least one hundred and fifty men pei'ished. The only officers saved are the second commander (wounded), the doctor, and one engineer. Every house in Callao was shaken to the foundation by the explosion, and every ship in the bay shivered, as if by a fearful earthquake. A Lima correspondent says : —There is an ugly rumor going about that some men entered Moquegua, where the Chileans had left their sick in the care of the natives, and murdered every Chilean they could find. It is also rumored that the Chileans have sent a force to wreak terrible revenge.
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