"On the 8th of July, I returned to the lower mines, and on the following day to Sutter's, where, on the 19th, I was making preparations for a visit to the Feather, Yuba, and Bear Rivers, when I received a letter from Commander A. R. Long, United States Navy, who had just arrived at San Francisco from Mazatlan with a crew for the sloop-of-war Warren, with orders to take that vessel to the squadron at La Paz. Captain Long wrote to me that the Mexican Congress had adjourned without ratifying the treaty of peace, that he had letters from Commodore Jones, and that his orders were to sail with the Warren on or before the 20th of July. In consequence of these, I determined to return to Monterey, and accordingly arrived here on the 17th of July. Before leaving Sutter's, I satisfied myself that gold existed in the bed of the Feather River, in the Yuba and Bear, and in many of the smaller streams that lie between the latter and the American Fork; also, that it had been found in the Cosumnes to the south of the American Fork. In each of these streams the gold is found in small scales, whereas in the intervening mountains it occurs in coarser lumps. "Mr. Sinclair, whose rancho is three miles above Sutter's, on the north side of the American, employs about fifty Indians on the north fork, not far from its junction with the main stream. He had been engaged about five weeks when I saw him, and up to that time his Indians had used simply closely woven willow baskets. His net proceeds (which I saw) were about $16,000 worth of gold. He showed me the proceeds of his last week's work--fourteen pounds avoirdupois of clean-washed gold. "The principal store at Sutter's Fort, that of Brannan and Co., had received in payment for goods $36,000 (worth of this gold) from the 1st of May to the 10th of July. Other merchants had also made extensive sales. Large quantities of goods were daily sent forward to the mines, as the Indians, heretofore so poor and degraded, have suddenly become consumers of the luxuries of life. I before mentioned that the greater part of the farmers and rancheros had abandoned their fields to go to the mines. This is not the case with Captain Sutter, who was carefully gathering his wheat, estimated at 40,000 bushels. Flour is already worth at Sutter's thirty-six dollars a barrel, and soon will be fifty. Unless large quantities of breadstuffs reach the country, much suffering will occur; but as each man is now able to pay a large price, it is believed the merchants will bring from Chili and Oregon a plentiful supply for the coming winter.