Madrid, May 3. - The last dispatch from Manila before the cable was cut said: "Only the outlying native quarters have suffered. They are now in flames Occasionally a shell teil in the European town, where a few houses were struck. The batteries of the Citaduad, especially large guns, are vigorously replying to the American fire and have iníücted considerable damage on the fleet." New York, May 3. - A Wall street news agency sends out the following: "Hong Kong - Manila has fallen. The stars and stripes wave over the Philippines." London, May 3. - Inquines made at the offices of the Eastern Telegraph eompany show it to have been impossible for any word to have come from Manila since 10 o'clock Monday mornIng, London time, when the cable was cut. The officials of the eompany say that, according to their tests from Hong Kongr, the cable was cut fifty miles from Manila. They think a week, or even a fortnight inay elapse before it can be repaired, as there are no faeilities there to repair the cable, and in any event, it will be a difficult task to piek up the cable in deep water. It is announced in a special dispatch from Madrid that there is no idea of surrenc'er there, either in ministerial circles or among the populace. On the contrary, it is added, the war is to be puisued with greater vig'or. This special dispatch adds that it is even stated at Madrid by those who are responsible for the naval movements that it has been determined to avoid isolated combats on unéqual terms and with a superior enemy, and that they now intend to throw the whole united naval atrength of Spain into one supreme effort to crush the American squadron In Cuban witters. Cabinet Crisis A verted. The Madrid correspondent of The Evening News cables the following message to his paper: "Although Premier Sagasta's conferences with the queen regent and Liberal leaders, Montero and Rios. led to rumors of the formation of a national government, the facts are that Señor Sagasta placed the situation before the queen regent, explaining that the significance of the events in the Philippine islands indicated certain possible solutions for the future. Thereupon the queen expressed continued confidence in the government. which will continue as now constituted for the present. Senors Gamazo and Montero express the opinión that the present cabinet should continue in power. The ministers met at Senor Sagasta's residence and the premier eommunicated to them the result of his interview with the queen regent." Martial law has ben proclaimed In Madrid and troops are now patrolling the city. The proclamation of martial law was decided upon because of the attitude of certain political parties. Second Spanish Squadron. A Cádiz dispatch siys that the secorj Spanish squadron, consisting of the warships Pelayo, Alfonso XIII and Vittoria, and a number of smaller shlps have nearly completed its preparations for active service. It is reported, however. that great difficulty is experienced in fitting out the ships, owing to a lack of money. The British engineers have refused to serve on board of 'them, owing. it is said, to the belief that they are liable to severe punishment undpr the foreign enlistment act. The Spanish auxiliary cruiser Guarda has, it is announced, taken fourteen guns on board, and is now on a trial cruise.