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The following official despatch of General Persifor F. Smith, contains an opinion of the position of San Francisco totally different from that of the numerous California tourists. It is a valuable opinion, nevertheless, and led to the selection of the town of Benicia, on the Straits of Karquinez, as a military and naval station.

Headquarters Third Division,
San Francisco, April 5, 1849.

General:—Since my last communication no troops have arrived to change the strength of the force here; but the steam transport Edith arrived on the 21st of March, and reports that the transports Iowa and Massachusetts, the former having General Riley with a part of the 2d infantry, and the latter having the command of artillery for Oregon on board, left Valparaiso about the 8th of February. The former is expected here every day, and the Edith is held in readiness to convey the troops south to the position they are to occupy.

There will be great difficulty in establishing and maintaining a post at the mouth of the Gila, until more knowledge is acquired of the navigation of the head of the gulf of California and the lower part of the Colorado. Transportation by land from San Diego is impossible for large quantities of stores.

In the gulf, the winds blow in the winter almost invariably from the northward; and in the summer, when they come occasionally from southward, it is in violent gales, with severe squalls and thunder, rendering it very dangerous to be in the gulf then. In other words, it is always difficult to run up the gulf, but almost always easy to run south. These circumstances render the employment of steam vessels very advantageous. If the navigation of the gulf permits the Edith to be used she will answer, having both sails and steam. If she draws too much water, others of lighter draught could be procured. I mention this now, as the boundary commission will commence their labors on this end of the line, and will be on the Gila next season. I should have observed that the Colorado is supposed to be navigable only for boats drawing three or four feet.

I see no reason for posting troops on any other point out of reach of the ports on the Pacific. The Indians in the interior do not make it necessary, and it would be useless to place them near the mines to maintain order there. Nothing but the establishment of a regular civil government, to be carried on by those most interested in the existence of good order, will answer that end.

Such detachments as go to the southern part of the Territory will accordingly be placed, as heretofore mentioned, in healthy and convenient positions, and those on this bay at such points as will combine good climate, convenience of supply, and facility of movement. I propose, when such a point is found, to have removed all the public stores there, both from this place and Monterey, leaving the heavy ordnance and stores.

The town of San Francisco is no way fitted for military or commercial purposes; there is no harbor, a bad landing-place, bad water, no supplies of provisions, an inclement climate, and it is cut off from the rest of the country, except by a long circuit around the southern extremity of the bay. In time of war, enemies' troops could be landed for many miles south of the entrance of the bay on the sea beach, and thus cut it off by a short line across the peninsula on which it stands. There are points on the bay, more inland, having good harbors and landings, good water, and open to the whole country in rear, and accessible without difficulty to ships of the largest class. One of these should be the point at which the future depots should be established; and I propose to go to-morrow in the Edith, in company with Commodore Jones and other officers of the army and navy, to examine the straits of Karquinez, said to combine most advantages. I hope to return and report the result of our examination before the next mail boat leaves, (on Monday, 9th,) but at any rate by the succeeding boat, a few days afterwards.

I hope that in fixing the port of entry, capital, or other public places, the law will leave to the President the selection; otherwise, private interests already involved in speculation here, will, by misrepresentation, lead to a very bad choice.

If Congress has not provided by law for the government of this Territory, or its admission as a State, I would be very glad that the government would officially promulgate its views as to the civil authority now exercised here. Some important questions of law, involving both life and property, are now depending; and judges and jurors, without experience in these difficult questions, are called upon to act under great responsibility.

It appears to be the opinion of merchants in many of the ports of the Pacific—and they allege in support of it the advice of some of our consuls—that in virtue of the circular of the Secretary of the Treasury of October 30, as the Treasury Department could not collect duties on imports in California, their goods, though dutiable, could be imported without paying duty. I have held that this was not the construction proper to be given to the circular, but only that the law had not provided the means of collecting duties here, that law being still in force which prohibits certain goods being introduced into the United States, unless they pay duties as prescribed; that consequently no dutiable goods can be landed in California unless they shall have paid their duties elsewhere—the effect of which would be, that they could not be admitted at all from foreign ports.

Under the circumstances, which showed a very hard case, I thought it proper that the parties should be allowed to deposit the amount of duties and land the goods; but, lest this should be construed as giving them a right for the future, and as the president may think proper to put an end to this indulgence, I have addressed a circular to all our consuls on these seas, warning them of this possibility—a copy of which is inclosed.

I was directed, when coming here, by the Secretary of War, to do all I could to facilitate the arrival of the civil officers of government in Oregon, as the public service required their presence there. The steamer in which we came here could go no farther north, and there was no possible way of those gentlemen getting there, except on a small vessel about sailing, on which there were no accommodations.

Commodore Jones kindly sent carpenters from the fleet to put up some berths, and on General Adair's (the collector's) representation, that no bedding could be procured, I directed the quartermaster to issue him the necessary number of blankets for the voyage, and take his receipt for them. I respectfully ask that this may be approved, and the amount charged to General Adair. The quartermaster could not tell him the price of the blankets when he took them.

As the rainy season has ended, people are again repairing to the mines. New discoveries farther south are said to have been made; and it is now pretty certain that the whole slope of the Sierra Nevada, comprised within the head waters of the San Joaquin to the south and those of the Sacramento to the north, contains gold. These two rivers, forming, as it were, a bracket, join to enter the bay of San Francisco; and their tributaries from the east, in their beds, expose the deposits of gold as they descend from the mountains. It is on the banks and branches of these streams that adventurers are now at work; but some excavations elsewhere, to a depth equal to that worn by the creeks, have disclosed quantities similar to those most generally found. There appears to be a line parallel to the summit of the main ridge, and some distance down the slope, at which the product of gold is at its maximum; but whether this be from the quantity deposited, or from the different position as relates to the surface, or from the difficulty of working it, I have not the means of knowing.

The gold is found in small particles: the largest I have seen, but such are rare, weighs seventy-one ounces troy. The appearance invariably is as though it had been spurted up when melted through crevices and fissures in drops, which have often the form of the leaves and gravel on which they have fallen. I speak of this as an appearance, not as a theory or hypothesis. The extent ascertained within which gold is thus found is at least four hundred miles long by forty wide; in almost every part of which, where the surface is depressed by the beds of rivers, gold has been obtained without digging more than ten feet below the surface, and very seldom that much.

It is impossible to furnish any grounds for estimating the number of people engaged in mining, or the amount they have produced. Persons engaged in trading with the miners say they amount to about ten thousand, but I cannot say with what reason. They can better judge of the amount produced, which the lowest estimate places at $4,000,000. More than three thousand persons have been added to the miners up to this time,—chiefly from Mexico and South America.

When the mines were first discovered, all the ports of South America on the Pacific, and of the Sandwich islands, sent the merchandise collected and stored there to be sold here. They realized enormous profits, before any competition from our eastern States could meet them; and these goods were generally owned by European houses, who thus became possessed of the first fruits of the mines, which were shipped to Europe on their account; and it is thus that so little gold has reached the United States.

When the merchandise now on its way from our Atlantic States arrives, and is sold, the current will set that way; but the profits will be much diminished by competition, and still more by the enormous expenses here for labor, storage, &c. These are almost incredible; the ordinary wages for the poorest laborer is $6 per day; many receive $10.

The extent and richness of the gold region have not been exaggerated; and the exorbitant prices paid for labor, rent, and subsistence, have hardly been fully set forth. But all the estimates of the amount actually produced are but mere suppositions, which may surpass or may fall short of the truth.

I have already directed that the men to whom their commanding officers may give short leaves of absence may be employed by the quartermasters at the usual rates here. This will be an encouragement to the men and an advantage to the public service, as labor is hard to get. But I doubt the propriety of yielding to the current of gold-seeking, and allowing large bodies of the men to go to the mines. It may be permitted to reward good conduct, as any other indulgence is; but to make it general, would be either to acknowledge the right of the men to modify their obligations as they please, or to confess our inability to enforce their fulfilment. For the sake of principle and preciseness, it would be better to adhere to what is right now, though the effect here in this particular instance would be the desertion of the men.

I am, with respect, your obedient servant,

PERSIFOR F. SMITH,
Brevet Major-General, commanding 3d Division.

Brigadier-General R. Jones,
Adjutant-General.