Monterey was, and is, as yet, the capital of the country, contains about two thousand inhabitants, principally natives and old established families of foreigners, who have not neglected to improve opportunities of making themselves rich. The soil in the neighborhood is good—the climate a hundred per cent. better than that of San Francisco. The situation of the town is very picturesque.

On the North side of the Bay lie the Mission and town of Santa Cruz, with a rich soil abounding in water and timber, as in its neighborhood, in the mountains, there are six saw-mills in operation. Building timber is easily and cheaply obtained here; land for building lots can be also procured at moderate prices. It is an excellent spot for mechanics to settle upon, as the sea offers them facilities for sending the produce of their hands into any portion of the country, while at the same time living is cheap, for everything in the way of provisions can be produced in the town.

Pueblo de San Jose is another old settlement, and has more than a thousand inhabitants within its jurisdiction, and is growing rapidly. By its position, in a magnificent valley, seventy miles in length at the head of the Bay of San Francisco, approachable by water to vessels as large as brigs, being a thoroughfare between the North and South of the country, possessing a rich soil, a mild and salubrious climate, beautiful landscape, and every facility for cheap and comfortable living, it cannot but grow rapidly; and we have no doubt that in a few years, when California shall be a little more settled and organized, it will become the seat of the State Government, being a more central and accessible point from all parts of the country than Monterey.

The town of South San Francisco, about three miles South of the city of San Francisco, possesses the same advantages of the harbor as the latter, for all classes of vessels, with the superiority of being more sheltered from the prevailing winds and of having an abundant supply of water, not only for the use of its inhabitants, but for the shipping. The same depth of water extends along the shore from one town to the other. The country is picturesque, the site of the town is more regular than that of San Francisco; it commands a quarry of stone suitable for buildings, and it lies on the road from San Francisco to Pueblo de San Jose. Had the original settlers of San Francisco exercised their judgment before settling on that windy spot, they would have put their houses on the site of South San Francisco.—We have no doubt but it will soon have its share in the commerce of the Bay.

Benicia is a town situated on the north side of the strait of Carquinez, with great depth of water; ships can discharge there close to the shore without the aid of wharves. It met with the approbation of naval and military officers as a good spot for a naval and military depot; and we understand that it has been recommended by the same to the government for the erection of government buildings, upon its site. It has a ferry boat which plies across the strait, and thus keeps the two portions of the country in constant communication, benefitting the public while it remunerates the efforts of the enterprising owners of the town.

Martinez is a projected town on the opposite side to Benicia, and of which we have already spoken above.

Suisun is a town just springing up into existence on the north side of the bay of Suisun and right bank of the Sacramento; it is very advantageously situated for both commercial and agricultural purposes. It is eighty-five miles distant from San Francisco and fifty from Benicia; it has a rich soil and is well wooded; it possesses good water in abundance, and building stone is found in the neighborhood. The depth of water is sufficient to admit barks to lie close to the shore. Its importance soon will be felt when the beautiful neighborhood of the Clear Lake shall be settled by enterprising farmers and miners. Its climate is mild and healthy.

Sacramento City, once the exclusive property of the well known and remembered by every stranger who appreciates hospitality, Capt. J. A. Sutter, is situated on the east bank of the Sacramento river; vessels of seven hundred tons are lying close to the shore in the stream. To show its growth and importance we need only state that on the first of May last it contained about fifteen houses and tents, the whole business with the mines being done at the Fort, which is about two miles distant from the city, and on the first of August it had more than a hundred houses and numerous tents, probably comprising about five thousand souls.

The town of Boston is situated in the fork made by the Sacramento and the American rivers in their junction, and its site extends along the shores of both of them. Its situation is a little elevated and free from inundation; the land is rich and well wooded; the same class of vessels that comes up to Sacramento City, can lie here with equal ease, being but a mile above the latter; the road that crosses the American river and leads to the Feather river, the Bear Creek and the Yuba goes through the town. It is laid out on the old site of an Indian Rancheria, a portion of which they still occupy.

The town of Washington is very beautifully situated on the same bank with Sacramento City, from which it is only nine miles distant up the river. The spot is well selected for an inland town where agriculture and trade with the mines must flourish; it is well provided with timber and a brook runs through it. The river craft and a steamboat run up to it.