POLITICS IN SOUTH AMERICA.

(From our Special Correspondent on the Spot.)

Monday.—Everyone is afraid that the action of the Government in imposing a tax upon cycles will have serious effects. Although the fleet do not use the carriages thus surcharged, it is not unlikely the armour-plated cruiser Impartial may threaten to bombard the capital. Altogether the situation is critical.

Tuesday.—My fears were well-founded. The capital has been bombarded, but not on account of the cycle tax, but to show that the commander of the armour-plated cruiser Impartial objects to the proposed equalisation of Poor Rates. Fortunately the Government torpedo-catcher Cupid was able to beat off the Impartial before serious damage could be done. Still, the question of the acquisition of the telegraphs is causing much excitement amongst the army.

Wednesday.—My worst fears are realised. The General in command of the garrison has made the Church Tithes question a casus belli. As the Government insisted upon proceeding with the second reading, the General thought it his duty to set fire to all the public offices. This is considered to be an extreme step by many important members of the Opposition.

Thursday.—This morning dense bodies of troops arrived opposite the House of Representatives, with a view to bringing pressure to bear upon the opponents to the Public Baths and Wash-house Bill, which it will be remembered passed through the Committee stage with the assistance of a cavalry regiment and three batteries of artillery.

Friday.—The Budget has disappointed both the fleet and the army, the combined forces have taken possession of the capital, and the Government is practically overturned.

Saturday.—Matters are still unsettled. The capital is still in possession of the insurgents. The Premier has been released on condition that he promises to bring in a Bill for the improvement of the Law of Bankruptcy early next Session. It is rumoured that a body of fresh troops are on their way to the metropolis in charge of a measure for the Abolition of Tithes, which they desire to carry through the Upper House at the point of the bayonet.

Sunday.—The Admiral commanding the fleet, having proclaimed himself Dictator, attended church in state. On his way back to his palace he was surrounded by the troops, and, after a tough engagement, was forced to retire to his flag-ship with heavy loss. The garrison would have attended the afternoon service en grande tenue had not the fleet opened fire upon the recently evacuated cathedral. In spite of recent events the populace still exhibit uneasiness.