The bay of Mulige contains several places of anchorage, but none of them are deemed safe for large vessels, or even from small vessels, at all seasons of the year. There are also several other parts in the gulf farther north which are occasionally visited by coasting vessels, but it is not known that any of them are likely to be of much commercial importance.

II. Proposed system of defence.—It is not supposed that, under existing circumstances, any military post will be necessary on the western coast of the peninsula; nor is it probable that, for many years, any place there will become of sufficient importance to justify the construction of military works for its defence. It is true that the whale fishery on this coast has become, from the amount of shipping engaged in it, an object of the highest consideration; but our having ports of refuge at San Francisco or San Diego, and at La Paz, strong enough to resist a naval coup de main, will, it is believed, afford sufficient security to these whalers in case of a war with a maritime power.

On our arrival here in October last, it was deemed desirable to establish a small military post at San Jose, for the double purpose of giving protection to the friendly inhabitants against a band of Mexican freebooters who had crossed the gulf from Guaynas to Mulige and Loreto, and of preventing the further introduction of men and munitions from the opposite coast. The old mission building was found well adapted to the purpose in view, and with a few repairs and improvements served as an admirable protection for the little garrison in the several attacks which it afterwards sustained from greatly superior forces. It will probably be necessary to continue this post during the war with Mexico, or at least so long as there is any danger of the enemy's sending troops from the opposite coast to again disturb the tranquillity of the peninsula; but it is not deemed advisable to establish at this place any works of permanent defence, the character of the port not being such as to warrant expenditures for this purpose. The defences of the cuartel or mission building are deemed sufficient for all purposes of temporary occupation.

Should the war with Mexico continue, and the naval forces be again withdrawn from the gulf, it may be necessary to establish temporarily a small military post at Mulige; but no permanent garrison will be required either at that place or Escondido, unless, perhaps, hereafter the commercial importance of the latter port should justify such a measure.

La Paz is, therefore, the only port in Lower California which it will be necessary, for the present, to occupy with a permanent military force, or to secure by means of fortifications. For temporary purposes, the site of the old cuartel is well suited for the construction of defensive barracks, inasmuch as it commands the town, and may readily be secured against an attack from the side. The buildings at present occupied as barracks are not judiciously located. A permanent work on Punta Colorada will completely close the entrance to Pichilingue cove, and its heavy guns will reach the entrance to the channel of La Paz; but to give the requisite security to the latter, a small battery will be necessary on Punta Prieta. The topographical features of both these points are favorable for the construction of small fortifications: Stone of good quality for building purposes is found in the immediate vicinity, and good lime may be procured at the distance of only a few miles. Quarries have been opened in the "Calaveras," and the stone, though soft and easily worked, is found to be in this climate of a very durable character. La Paz is not difficult to defend against a naval attack, and the proposed fortifications may be constructed in a short time and without a very large expenditure of money. The commercial character of the place, its military importance as connected with the defence of the peninsula, its great value as a naval depôt and port of refuge for our commercial and military marine in case of war with any naval power, will, it is believed, fully justify the expenditures necessary for securing this port against a maritime attack.

III. Commercial and military importance of Lower California.—Thus far in my report I have proceeded on the supposition that it is the intention of our government to retain the whole of California in any treaty of peace with Mexico; but doubts have recently been expressed on the policy of retaining this peninsula, on account of its being of little or no value to the United States. As the guerrilla forces which were sent over from Mexico the past summer, during the absence of our squadron from this coast, to regain possession of Lower California, and force the inhabitants to their allegiance to the Mexican government, have been defeated and completely dispersed, leaving our own troops in undisputed possession of the territory, nothing but a conviction of the utter worthlessness of the country could now induce our government to consent to its abandonment. On this subject I beg leave to add a few remarks:

The peninsula of California lies between twenty-two degrees fifty minutes and thirty-two degrees thirty minutes north latitude, being about seven hundred miles in length, and varying from fifty to one hundred miles in breadth. An irregular chain or broken ridge of mountains extend from Cape St. Lucas to the frontiers of Upper California, with spurs running off on each side to the gulf and ocean. Between these spurs are numerous broad plains covered with stunted trees, and during the rainy months with a thin but nutricious grass. In the dry season this grass is parched up like hay, but from its nutricious character it affords abundant food for the herds of cattle and horses which constitute the principal wealth of rancheros. The dryness of the soil prevent the growth of trees of any considerable magnitude, except on the borders of a few mountain streams. This timber, though far from being plentiful, is exceedingly durable and much esteemed in ship-building. The greatest height of the mountains is estimated five thousand feet; many of them are piles of mere broken rocks, while others are covered with grass, shrubbery, and small trees. The plains are sandy and mostly unproductive—not, however, from any natural barrenness in the soil, but from a deficiency of water. There are but few durable streams in the whole country, and streams of good water are extremely scarce. But in the plains and most of the dry beds of rivers water can be obtained by digging wells only a few feet in depth; and wherever irrigation has been resorted to by means of these wells, the produce of the soil, from its remarkable fertility, has abundantly rewarded the labor of the agriculturist. Much of this soil is of volcanic origin, having been washed from the mountains by the action of heavy rains, and the produce extracted by means of irrigation from these apparently barren and unprolific sands is something most marvellous. The general aspect of the country on the coast is exceedingly barren and forbidding, but I have seen no instance where the soil is properly cultivated that the labor bestowed on it is not well rewarded. The growth of vegetation is exceedingly rapid, and the soil and climate are such as to produce nearly all the tropical fruits in great perfection. But the inhabitants are disinclined to agriculture, and most of them live indolent and roving lives, subsisting principally upon their herds. Notwithstanding the unfavorable character of the country, it is capable, in the hands of an industrious and agricultural people, of supporting a population much more numerous than the present. In the time of the missions, when very small portions of the soil were cultivated, and even these but rudely, by the Indians, the four districts of San Jose, Santiago, San Antonio, and Todos Santos contained a population of thirty-five thousand souls, whereas, the present population of the same districts is only seven thousand.

SACRAMENTO CITY.

The agricultural products of Lower California are maize, sugar-cane, potatoes, dates, figs, grapes, quinces, lemons, and olives. A considerable quantity of hides, beef, cheese, soap, sugar, figs, raisins, &c., is annually exported to Mexico and Upper California, flour and merchandise being received in exchange. The vegetable market of Mazatlan is also in part supplied from the valley of San José.