And Thirdly,--The amount of the bank issues in circulation, understood to be about 20,000,000 of dollars currency, for the whole amount of which the government had declared itself responsible to the public as the easiest mode of settling its own account with that establishment upon the expiration of its charter in 1836. On the other hand, the whole of the ordinary revenues were only estimated at 12,000,000 of currency, of which about a fourth part, as above stated, was required to be set apart in the first instance to meet the charges for the funded debt. The remaining 9,000,000 was insufficient by half to meet the ordinary expenditure of the state, much less to enable the government to make any provision for a settlement with the English bondholders, or for the redemption of the currency. This was the state of things at the commencement of 1837, as far as I can collect from the accounts which have been published; deplorable as it appeared, it perhaps would not have been altogether irremediable, had the peace of the country been preserved, and the war establishments been reduced. The estimated revenue of 12,000,000 was based upon the average of the years immediately preceding, which had been far from favourable to the development of the resources of the republic. It was notorious that many branches of it were very loosely collected; the contribucion directa, or property-tax, especially, which produced little or nothing, instead of being made, as it ought to have been, one of the most important items in the revenue of the state. In this, as in other branches of it, there was no doubt that, with care and good management, the public income might have been greatly increased. Besides, there were still the greater part of the public lands undisposed of, which the legislature, in 1836, had given authority to the government to sell, for the purpose of liquidating the debt previously contracted; and with regard to the funded debt, the operation of the sinking fund with its accumulating interest was becoming so efficient that, notwithstanding its large amount, a very few years indeed would suffice to redeem the whole of it, if not further increased. In 1837 the sinking fund already amounted to more than a million of dollars, which, in twelve months, redeemed little short of two millions and a half of stock. But, as I have before had occasion to observe, touching their social condition, so it is most especially with regard to their financial prospects, there can be no well-founded expectation of any improvement which is not based upon a continuation of the peace and quiet of the country. That, unfortunately, has been again interrupted in the past year, and the Republic has not only become involved in the war declared by Chile against Bolivia, but in a much more serious and disastrous dispute with the French, the calamitous consequences of which it is difficult to estimate.