22 SEPTEMBER 1866, Page 2

The Paraguay army appears to have inflicted a heavy repulse

on the allied armies of Brazil and the Argentine Confederation on the 16th and 18th July. As the report comes through a Brazilian °channel, the engagement was probably even more favourable to the Paraguay force than appears. The Brazilians are admitted to have lost in killed and wounded 2,888, and the Argentines 1,000. A great attack was planned by the Brazilian and Argentine allies for the middle of August.