It will thus be seen that the Chilian fleet would have all its work cut out if it meant to take the port of Callao, as the first step toward the capture of the capital, Lima.

By April 20 all the foreign merchant ships had gone away, and all the foreign warships had moved out of the line of fire and taken up their position off the mouth of the Rimac River, about two miles to the northward of the port of Callao.

It was half-past one o’clock p.m. on the eventful day of April 22 when Admiral Riveros hoisted a signal on the Blanco Encalada for the fleet to weigh anchor and stand over toward the batteries in readiness to engage; and a few moments later the clatter of chain-cables was heard, as the men-o’-war got their anchors. The Pilcomayo, gunboat, was the first to move, and she took up a position north of the middle of the bay; Jim’s recent command, the cruiser Angamos, being next in line; with the Huascar at the south-west extremity. The flagship, to the intense annoyance of her crew, was held in reserve; but the men would not have grumbled at their enforced idleness had they but known of what was in store for some of them. Jim, in particular, was never tired of speculating as to what was the mysterious service which Riveros had hinted his intention of employing him upon, and longed for an opportunity which would enable him to distinguish himself.

He was roused from his somewhat moody reverie by the boom of a great gun, and, looking up, he saw a cloud of white smoke hanging over the Huascar, which had been the first ship to fire, while a brilliant flash of flame on board the monitor Atahualpa showed where the death-dealing shell had struck and exploded. The Angamos and the Pilcomayo were not slow in chiming in, and presently the air fairly vibrated with the concussion of heavy guns; for the Peruvians were now replying with their seventeen large-bore guns mounted in the batteries, assisted by the pivot-guns of the Union and several large smooth-bore guns from some of the obsolete ships behind the mole or stone pier.

The Blanco Encalada was theoretically beyond the range of any of the enemy’s guns; and although several shells exploded in the air near her, she was never at any time in the least danger, and Jim Douglas, with his chum Terry, had a splendid opportunity of witnessing a bombardment at close quarters without taking any risks. But both of them were so unappreciative of this immunity that they would have infinitely preferred their ship to be in the thick of the fighting, instead of lying safely out of range as she was.

But presently the Chilians found that it was almost impossible to hit the shipping behind the mole from the position which they had taken up, and as Admiral Riveros’ principal desire was to annihilate the Peruvian navy, and thus render Peru harmless at sea, he signalled for the Huascar to move closer in, and to take up a position more to the north-eastward. The signal was acknowledged, and presently the monitor lifted her anchor and stood over still closer to the mole, maintaining a terrific fire as she went, and receiving a 20-inch Dahlgren shell on her water-line as some slight return for the damage that she was inflicting. But luckily she was well provided with water-tight bulkheads, or nothing could have saved her, for the sea poured into her in tons through the huge hole which the shell had made in her side.

Nothing daunted, however, her captain, Carlos Condell—the man who had fought the Covadonga so splendidly, and been promoted through several ships to the Huascar—continued to stand on until he had approached to within a mile of the mole, when he dropped his anchor and opened a still more furious and destructive fire upon the Peruvian ships. One well-aimed shell set the Union on fire, and for a few minutes Jim and his chum—together with every other man in the Chilian navy, for that matter—thought and hoped that the famous ship had run her course. But Villavicencio was, as has already been seen, a man of resource and energy, and in half an hour he had the fire under control.

Not so fortunate was the school-ship Marañon. Although old, she was armed with the newest weapons for the instruction of naval men in gunnery, and though these guns were of small calibre, and therefore of little use against the thick armour of the ironclad, she steamed out from behind the mole and replied heroically to the Huascar’s fire, killing twelve men who were working the monitor’s machine-guns, jamming one of the turret-tracks, cutting one of the anchor cables, and nearly wrecking the Huascar’s new foremast which had been put in at Valparaiso, before one of the ironclad’s 10-inch shells burst in her hold and blew the bottom clean out of her.

“By George, Terry,” exclaimed Jim enthusiastically, “did you ever see such a plucky fight? Why, the school-ship has given the Huascar a thoroughly nasty mauling! I expect the Peruvians feel more than a bit sore at seeing the ship which used to be the pride of their fleet in Chilian hands. Caramba! but the Marañon is sinking lower in the water every second; she will be gone in less than five minutes. I hope those brave fellows will be able to get out of her before she goes, for the bay is simply swarming with sharks! Look at the black dorsal fins of the beggars playing round the old Blanco! It’s enough to make a fellow sick to think of those gallant chaps being torn to pieces by such monsters as these. Ah! I am glad to see that Condell has ceased firing to allow those Peruvian launches which are just coming out to pick up the survivors. Too late! too late!” he groaned, a second or two later; “there she goes already! Why, the whole bottom must have been blown clean out of her for her to sink in that short time!”

The launches held back for a few seconds to avoid being caught in the vortex caused by the sinking ship, and then dashed forward to the rescue. They saved a good many, but if Jim had but been close enough he would have seen that his prophecy with regard to the sharks had proved only too true; for the voracious monsters, darting hither and thither, snapped up the unfortunate men before the very eyes of the comrades who were straining every nerve to save them, the fierce fish sometimes leaping half their length out of the water in their furious efforts to snatch their prey back even when the man had been hauled up on to the boat’s gunwale.