Now the light-house telephone rang madly and Spencer seized the receiver. "They are, I tell you. Can't you hear the shots?" he shouted into the instrument. "There are two large Japanese ships out in the roads shooting at the Olympia and the transports. Impossible or not, it's a fact!"

Suddenly a thick column of smoke began to ascend from the funnel of the little American gunboat Marietta, which was lying among the transports out in the roads. The whistles and bugle-calls could be heard distinctly, and the crew could be seen on deck busy at the guns. The steam-winch rattled and began to haul up the anchor, while the water whirled at the stern as the vessel made a turn. Even before the anchor appeared at the surface the gunboat had put to sea with her course set towards the ships on the horizon, which were enveloped in clouds of black smoke.

"There's nothing for us to do," said Spencer despairingly, "but stand here helplessly and look on. There isn't a single torpedo-boat, not a single submarine here! For Heaven's sake, Ben, tell us what's happening out there!"

"It's awful!" answered Wood; "two of the transport-ships are in flames, two seem to have been sunk, and some of those further back have listed badly. The Olympia is heading straight for the enemy, but she seems to be damaged and is burning aft. There are two more cruisers in the background, but they are hidden by the smoke from the burning steamers; I can't see them any more."

"Where on earth have the Japanese ships come from? I thought their whole fleet was stationed in the Pacific. Not one of their ships has ever come around Cape Horn or through the Straits of Magellan; if they had, our cruisers off the Argentine coast would have seen them. And besides it would be utter madness to send just two battleships to the Atlantic. But where else can they have come from?"

"There's no use asking where they come from," cried Wood excitedly, "the chief point is, they're there!"

He gave up his place at the telescope to his comrade, thought for a moment, and then went to the telephone.

His orders into town were short and decisive: "Send all the tugs out to sea immediately. Have them hoist the ambulance-flag and try to rescue the men of the transports."

"And you, Spencer," he continued, "take the cutter and hurry over to the transport-steamers in the roads and have them hoist the Red Cross flag and get to sea as quickly as possible to help in the work of rescue. That's the only thing left for us to do. I'll take command of the President Cleveland and you take charge of the Swedish steamer Olsen. And now let's get to work! Signor Alvares can play the rôle of idle onlooker better than we can. Our place is out there!"

Both officers rushed down the stairs and jumped into the cutter, which steamed off at full speed and took them to their ships.