Papers Relating to the Foreign Relations of the United States, Transmitted to Congress, With the Annual Message of the President, December 1, 1873

No. 180.
Sir Edward Thornton to Mr. Fish.

Washington, February 10, 1873. (Received February 11.)

Sir: Lord Granville has desired me to state to you that, as the Japanese embassadors, who have already visited England and the United States, have now set out to visit other European countries, it may be agreeable to the Government of the United States, with reference to the negotiation for the revision of treaties which will take place at no distant day in Japan, to be made acquainted with what has passed with them in England.

I have, therefore, the honor, by his lordship’s direction, to inclose copies of the memoranda of three conversations which he held with them before their departure, and of a memorandum which they gave him respecting a question more directly affecting the United States, England, France, and Holland, with observations thereupon by Sir Harry Parkes.

Sir Harry will shortly return to Japan, and will be authorized, when the time arrives, to enter upon the question of the revision of the British treaty with Japan, and he will be prepared to communicate unreservedly with the representatives of other powers who have a common interest with England in the establishment of relations with Japan on a satisfactory footing.

I have, &c.,

EDW’D THORNTON.

No. 1.
Memorandum by the Japanese embassadors respecting the Shimonoseki indemnity.

On the 22d of October, 1864, a convention was signed by the representatives of Great Britain, France, United States, and Netherlands with the representative of the Japanese government, wherein was concluded a final arrangement settling the amount of indemnity to be exacted in consequence of certain attacks made at Shimonoseki by the daimio of Chio-Shiu upon vessels of the above-named powers, wherein the government of Japan was bound to pay, in quarterly installments, the sum of $3,000,000, as indemnity for all direct damages, as well as remote or consequential damages, and expenses in any way resulting from or occasioned by reason of the expedition undertaken by the combined naval forces of these four powers.

The first, second, and third installments were accordingly paid by the government of Japan, agreeably to the foregoing conditions; but when the time arrived for payment of the fourth installment, the existing government was in so critical a situation that further payments were quite beyond its power at that time, and it became necessary to address the parties to this convention, requesting a postponement of two years for the remaining payment, adding proper interest for the delay.

To this proposal the representatives of the four powers replied that they would refer the matter to their respective governments; and it was subsequently understood by the government of Japan that its proposal had been unanimously acquiesced in.

The foregoing statement shows the condition of the Shimonoseki indemnity transactions until a postponement was consented to.

We now desire to call the special attention of Her Britannic Majesty’s government to an important point set forth in the convention referred to. It was perfectly understood by the parties to the aforesaid convention that the principal object held in view by the respective governments was to deal with this question so as to enlarge and increase the commercial relations with Japan on a broad and advantageous basis, and that therefore they were strongly inclined to give preference to the opening of Shimonoseki, or some other port of the inland sea, should it be found practicable, rather than to insist upon a pecuniary indemnification.

This Her Britannic Majesty’s government may, perhaps, more clearly understand by referring to the following extract from the 3d article of the said convention, viz:

“Inasmuch as the receipt of money has never been the object of the said powers, but the establishment of better relations with Japan, and the desire to place these on a more satisfactory and mutually advantageous footing, is still the leading object in view, therefore, if His Majesty the Tycoon wished to offer, in lieu of the sum claimed, and as a material compensation for loss and injuries sustained, the opening of the port of Shimonoseki, or some other eligible port in the inland sea, it shall be at the option of the said foreign governments to accept the same, or insist on the payment of the indemnity in money, under the conditions above stipulated.”

From this it clearly appears that the spirit we have above alluded to was implicitly understood by the powers above named, and especially so as their representatives have subsequently reiterated the sentiments both in verbal and written communications.

It may easily be inferred that the government of Japan, had it been possible and within the power of the general government at that time, would undoubtedly have preferred to open Shimonoseki, or any other port of the inland sea, than to pay the heavy pecuniary indemnity.

Had the government at that time been able to accept the alternative of opening a port as desired, it would have avoided a heavy pecuniary burden, which can in no way assist the desired end of developing the commercial relations of the respective countries.

We are, therefore, certain, from the expressions made on the part of the powers named, which must have been sincerely made in the convention, where the said preference was continually expressed, that a proposition to open a port would have more nearly met their views than the payment of a pecuniary indemnity.

Being fully encouraged by expectations founded on the disposition there manifested we have endeavored in every possible way, as Her Britannic Majesty’s government well knows, amid the trying difficulties and perplexing complications resulting from internal disturbances and civil strife, to achieve what we thought most important and within our power to accomplish for the promotion of commerce and the cultivation of friendly relations with western powers.

When foreign powers complied with our request for postponement of the payment of the remaining sum, a material substitute was exacted, and we were required to revise our tariff before the term of ten years fixed for a revision of treaties, which demand resulted in concluding the convention of June 25, 1866, wherein many additional articles were agreed to and signed by the representatives of the same powers which were parties to the indemnity convention.

When His Majesty the Emperor of Japan gave his sanction to the treaties concluded with the European powers, he largely contributed to establish the object claimed by foreign representatives as the end of their aims, viz, to facilitate and increase international commercial relations.

It was likewise favorable to commerce when we opened the port of Hiogo and the city of Osaka, when a port was also opened beyond the requirement of the treaty of 1858.

In addition to this we were bound to construct light-houses by the XIth article of the said convention, in the following terms, viz:

“The Japanese government will provide all the ports open to foreign trade with such lights, buoys, and beacons as may be necessary to render secure the navigation of the approaches to the said ports.”

Accordingly, the necessary materials for their construction were ordered from Europe, and the work was at once commenced. Soon after the revolution broke out, in the beginning of the year 1868, and, as Her Britannic Majesty’s government is well aware, resulted in the firm establishment of the present legitimate monarchical government of His Imperial Majesty the Emperor of Japan.

While largely pre-occupied with the pressing emergencies of a spirited revolution our leaders foresaw the importance of foreign intercourse, and resolved to direct their full energies towards promoting friendly and commercial relations with European powers.

It is with, pleasure that we are now able to state that these public works are about completed, to the general satisfaction of all foreigners residing in Japan; but we would at the same time call the attention of Her Britannic Majesty’s government to the fact that many public works undertaken by the Japanese government for the benefit of commerce have entailed upon our country very heavy expenses, especially severe at a time immediately following a most serious revolution of a national character, during which the finances of the country were severely taxed, and since which the large public improvements, most of the materials for which have of necessity been purchased out of the country in European markets, have called for a rapid expenditure within a comparatively limited time. Indeed, the sum of expenses incurred in erecting lighthouses alone has been enormous, far exceeding anything we foresaw when the work was undertaken; we have already thus expended more than $1,000,000, without, however, including the probable amount which it will be necessary to spend hereafter in order to complete all these works.

If Her Britannic Majesty’s government will carefully examine the points we have touched upon, together with further points, such as the direct losses of the Japanese government, resulting from the reduction of both import and export duties, the abolition of permits for landing and shipment, establishment of the warehousing system, with which we were unacquainted, and consequently requiring the employment of foreigners, we feel confident that the actual results we have been able to successfully accomplish in the short space of a few years cannot fail to carry full conviction that we have labored earnestly and sincerely for the promotion and cultivation of friendship, and that on the part of His Imperial Majesty’s government every available means has been diligently employed to foster and develop wider commercial relations with European powers, and carry out in good faith the entire spirit as well as the letter contained in the third paragraph of the convention of 1866, which reads as follows:

“The government of Japan being desirous of affording a fresh proof of their wish to promote trade and to cement the friendly relations which exist between their countries and foreign nations,” &c.

The Japanese government therefore consider themselves as having fulfilled the conditions required by the said powers, in consequence of their deviation from the payment of a portion of the indemnity, and trust that the foreign powers will approve of what they have hitherto done, and will fully appreciate the views herein expressed, in order that we may reach a final settlement of this affair.

The Japanese government, in submitting this memorandum, are prompted by an earnest desire to become acquainted with the disposition and the views of Her Britannic Majesty’s government with respect to this subject.

No. 2.
Observations by Sir H. Parkes on the memorandum of the Japanese embassadors.

The antecedents of this question are not clearly stated in this memorandum.

This indemnity became due under the Shimonoseki convention of 22d October, 1864, as compensation for the numerous attacks made by the daimio of Chio-Shiu on French, Dutch, and United States ships, and for the expenses incurred by those powers and Great Britain in depriving that daimio of further means of offense.

The option of opening an eligible port to foreign trade in lieu of the indemnity was reserved by the same convention to the Japanese government, but was declined by the latter.

It was understood, therefore, that payment should be proceeded with, as stipulated, in six quarterly installments of $500,000 each; and the four powers agreed to a plan of division, by which France, Holland, and the United States were to receive $420,000 as compensation for the injuries done to their ships, and the remaining $2,580,000 were to be divided equally between the four powers. At that time (1865) the United States minister in Paris (Mr. Bigelow) contended that, although the United States only contributed one small vessel to the expedition against Chio-Shiu, the value of the moral force of the United States co-operation justified a claim to an equal division in the indemnity.

In connection with this point it may be observed that the House of Representatives reported this year (see Sir Edward Thornton’s dispatch No. 322) that all the injuries sustained by Japanese attacks on United States vessels or property did not amount to $40,000, and that the expense of providing the small vessel above alluded to cost only a few thousand dollars. That the United States Government having received in return for these injuries and outlay upwards of $700,000, the committee reported a bill releasing the Japanese government from payment of the United States’ share of the portion of the indemnity remaining due. This bill passed the House of Representatives, but not the Senate.—(See Sir Edward Thornton’s dispatch No. 457.)

The first installment of $500,000 was paid by the Japanese government in August, 1865, and they at once asked for delay in the liquidation of the remaining five installments.

Upon this, the four powers offered to remit four installments, or $2,000,000, altogether, provided the Japanese government opened at once the ports of Hiogo by Osaka, obtained the ratification of the Mikado to the treaties, and revised the tariff on a basis of 5 per cent.

The Japanese government complied with the two latter conditions, but declined to open the port of Hiogo until the time stipulated for doing so, (1868,) and declared their preference for the full payment of the indemnity, which they again undertook to complete without further delay.

Payment of two more installments followed; but in April, 1868, they again applied for postponement in the discharge of the remaining three installments, or $1,500,000, being the sum which still remains due.

The good feeling shown by the Japanese government in the negotiations of the tariff in 1866, and again in the arrangements made for the opening of Hiogo and Osaka, at the time appointed, (1868,) induced the British, French, Dutch, and United States representatives in Japan to recommend to their respective governments that payment of the above amount should be deferred until May, 1869, at which date the Japanese government declared that they would not fail to meet their obligations. This proposal being acceded to, the latter thus obtained three years’ time, with interest chargeable on two only of these three years. It was tacitly understood that the rate of interest would be 5 per cent.

Civil war intervened, and the Tycoon’s government was replaced by that of the Mikado. In the spring of 1869 that government was reminded that payment of the remaining moiety of the indemnity would soon become due, and they met this notice by a request for a further extension in time of three years, and for the remission of all interest due until the end of the said three years, and also for the two preceding years, five in all, on condition that they should not raise the duties on tea and silk—which they possessed the right to do at that date, 1869—until the treaties came to be revised in 1872.

This proposal was accepted by the four powers, but on the express condition that it was to be regarded as a final settlement of the question, and that no further postponement of payment should be asked for by the Japanese government. Accordingly, the representatives of the four powers, in making known to the Japanese government the acceptance of the above proposal, used the following clear language on this point, in a note identique which they addressed on the 7th March, 1870, to the Japanese ministers:

“It is incumbent, however, on the part of the undersigned, to add that, in view of the repeated delays which have occurred in the payment of the said indemnity, it becomes necessary that the notes now exchanged between their excellencies and the undersigned should declare that the present postponement is final, and that the Japanese government will not fail to pay, to the four powers interested in the Shimonoseki indemnity, on the 15th May, 1872, the whole of the moiety remaining due, namely, $1,500,000.”

To which the Japanese ministers rejoined on the 9th April, 1870:

“In reply, we have the honor to inform you that we accept the delay offered, namely, till the 15th May, 1872. In view, however, of the repeated delays in the payment of the said indemnity, it is agreed that no further postponement shall take place.”

Nothing further passed between the Japanese government and Her Majesty’s representatives in Japan until the three years thus granted expired, last May, when the Japanese minister informed Mr. Adams, exactly a week before the payment became due, that the embassador, Iwakura, who had then left Japan nearly five months, had been charged to treat on this subject with Her Majesty’s government.

The arguments in the embassador’s memorandum for the remission of the money, which three years ago the Japanese government explicitly declared they would pay in May, 1872, without further question, are now put forward for the first time. They urge as concessions to foreign commerce the ratification of the treaties by the Mikado, the revision of the tariff in 1886, earlier, as they allege, than the time appointed, the construction of light-houses, the abolition of fees on landing and shipping permits, the Establishment of a warehousing system, and the opening of the port of Osaka. But they should remember that the refusal of the Mikado to ratify the treaties would have been a hostile act; that the revision of the tariff was not undertaken before the time appointed, as it could be claimed under the treaty any time after 1863; that the new tariff can be shown to be more advantageous to their interests than the old one; that the provision of light-houses is as beneficial to native as to foreign shipping, and that the cost of construction or maintenance may be met with light-dues; that the abolition of permit-fees put a stop to abuses which were not creditable to the Japan custom-house; that the warehouse system, as they work it, has not proved serviceable to foreigners, and that the permission to foreign ships to anchor off Osaka, which is an accommodation of trivial value and seldom used, was fully met by the delay granted to the Japanese government in the opening of Yedo and Niigata. In return, however, for the good feeling which these arrangements denoted, the Japanese government were allowed an extension of three years’ time in the payment of half of the indemnity, namely, from May, 1866, to May, 1869, and a year’s interest on the same was remitted to them.

It would appear, therefore, that if they now seek the remission of the $1,500,000 still remaining due, they should offer some equivalent of corresponding value, but no proposal of this kind is made in the memorandum of the embassador.

So long as the indemnity is not paid, the Japanese government cannot claim the higher silk and tea duties agreed to in 1869, and these low duties are doubtless an adequate equivalent for the interest due on the moiety of the indemnity which remains unpaid. The Japanese government also have it in their power to make other concessions if they are actuated by a sincere desire to expand foreign intercourse and commerce.

HARRY S. PARKES.

London, November 30, 1872.

No. 1.
Memorandum of an interview between Earl Granville and Iwakura, chief embassador of Japan, at the foreign office, November 22, 1872.

Iwakura said that he had come to thank Lord Granville, and through him Her Majesty’s government, for the facilities afforded to the embassy during their visit to the different towns of this country. They had been much pleased and interested, and he had no doubt that much advantage would accrue to Japan from the observations which they had made.

He went on to say that his present visit was merely one of ceremony, but that he hoped to have an early opportunity of conferring with his lordship with regard to the objects of the mission of himself and his colleagues to this country.

On being invited by Lord Granville to proceed to do so at once, Iwakura said that his lordship was doubtless acquainted with the general character of the political changes which had taken place in Japan during the last twenty years. He would only refer to the opening of the country to foreign commerce, the abolition of the feudal system, and the centralization of the government under the rule of the Mikado. Under these altered circumstances, it had become the policy of the Mikado and his government to endeavor to assimilate Japan as far as possible to the enlightened states of the west, and that the present embassy had, therefore, been sent to England in order to study her institutions, and to observe all that constitutes English civilization, so as to adopt on their return to Japan whatever they may think suitable to their own country. The time had now arrived for the revision of the treaty between Japan and England, and he was charged by his sovereign to ascertain the views of the British government on this subject. These he would lay before the Mikado, by whom they would be taken into consideration when the treaty was being revised.

Lord Granville inquired whether it was intended that the negotiations for the revision of the treaty should be carried on in England or in Japan.

Iwakura replied, “In Japan.”

Lord Granville then invited Iwakura to state his views regarding the principles on which the treaty should be revised, but Iwakura said that he was not charged with the expression of the views of the Japanese government on this subject, but only to ascertain the views held on it by the British government.

Lord Granville said that he would require some time for consideration before explaining fully the views of Her Majesty’s government, but he would state their opinions in regard to one or two points.

One was the question of religious toleration. His excellency had no doubt observed that, notably in England and America, and in an increasing degree in continental countries, the policy of religious toleration was everywhere accepted. He could assure his excellency that nothing would conduce more to create a favorable feeling toward Japan among Englishmen than the adoption of a more liberal policy in this respect.

Iwakura said he would state his opinions on this subject on a future occasion.

Lord Granville then adverted to the facilities for traveling in every part of this kingdom which are afforded to all foreigners, not only when traveling like the embassadors in an official, but also in private capacities, and added that, if Japan wished to assimilate herself with foreign countries, the country must be thrown open more freely.

Iwakura said that the policy of the Japanese government would be to favor such a result by all the means in their power. He feared, however, that at present the ignorance of the rural population, and other difficulties, made it impossible to allow foreigners to travel freely in the interior for the present.

Lord Granville informed Iwakura that the Queen would give him an audience on the 5th December. The particulars of this audience would be afterward communicated to him.

Another interview was arranged for the 27th instant, at which Iwakura hoped he might be allowed to bring with him one of the associate embassadors and the Japanese minister. Lord Granville intimated to Iwakura that Sir Harry Parkes would also be present.

W. G. ASTON, Interpreter.

No. 2.
Memorandum of an interview between Earl Granville and Iwakura, chief Japanese embassador, at the foreign office, November 27, 1872. Sir Harry Parkes, Terashima Munenori, Japanese minister, and Yamaguchi, associate embassador, were also present.

After the first compliments had been exchanged, Iwakura said that he was now ready to hear from Lord Granville what were the views of the British government in regard to the revision of the treaty. Lord Granville said he would do so, but that he still hoped, notwithstanding the language used by Iwakura at the previous interview, that so important an embassy and one composed by such eminent men would be able to inform him of the views of their own government on this question, as any communication of this sort, if wholly on the part of one side, was not of much practical use.

Iwakura replied that he was not authorized by his instructions to declare the views of his own government, but merely to learn what were the views of the British government.

Lord Granville said that although this made discussion more difficult, he would not be reticent as to some of the principal points, though he did not propose to go into any details. He went on to say that the British government were desirous that the Japanese government should afford greater facilities for European ships to visit other ports than those now open to them by treaty, and for foreigners to travel in the interior of the country.

Iwakura, followed by Terashima and Yamaguchi, then stated the objections which in their view existed in the way of granting increased facilities of this kind. So many difficulties, they said, had been experienced in carrying out the present arrangements for foreign intercourse even at the open ports where the European authorities resided, that it was only reasonable to suppose that many more would arise if intercourse with foreigners were permitted generally throughout Japan.

When asked to describe the nature of these difficulties, Terashima mentioned as examples the impossibility of framing and carrying out regulations for game, for the preservation of harbors, for lighting the foreign settlements, and the difficulties which have been met with at Hiogo in regard to the payment of land-tax by foreigners resident beyond the limits of the foreign settlement. Till these difficulties were removed, he thought it could not be expected that greater facilities should be granted, for these would certainly give rise to additional troubles.

Sir Harry Parkes pointed out that these difficulties were in great part the creation of the Japanese government themselves, and Lord Granville observed that there was no reason why they should not be removed by the two governments working heartily in concert. He was convinced that, in the view of the friendly feelings and mutual desire for more unrestricted intercourse which now existed between the Japanese and English nations, there could be no real obstacle to the removal of the restrictions upon trade and intercourse which still existed in Japan. If this were done, he had no doubt the time would come when it would be unnecessary to have any regulations of a special character for the government of foreigners resident in Japan.

Iwakura inquired whether Lord Granville thought it probable that this result could soon be brought about. If, he said, foreigners were amenable to Japanese law, he saw no reason why the same facilities for trade and intercourse should not be granted as exist in England.

Lord Granville replied that, as soon as Japan had a proper code of laws administered by tribunals upon which the British government could rely, a great change would take place in the feelings entertained in regard to this matter. His lordship then referred to the case of Egypt, where the extraterritorial jurisdiction had formerly prevailed, but where the experiment was now being tried of allowing Egyptian tribunals to administer the law in civil cases. If this experiment succeeded, it would be tried in criminal cases also, and there was no reason why a similar course should not be taken with Japan. In all such cases the policy of the British government was to yield the local authorities jurisdiction over British subjects in precise proportion to their advancement in enlightenment and civilization.

Iwakura thanked his lordship for these assurances. He said that he would be careful to report them to his sovereign, and that in particular he would not fail to acquaint him with his lordship’s observation on the British policy in regard to jurisdiction in Egypt.

Lord Granville then referred to the question of religious toleration in Japan. He said that there was a very strong feeling in England upon this subject, and that strong representations had been made to him in respect to it. Nothing would tend more to bring about a more favorable feeling toward Japan than toleration in religious matters.

Iwakura said that it was the earnest desire of the Japanese government to favor by all possible means the attainment of this object. The difficulties, however, in their way were very great. More than 200 years ago the introduction of Christianity into Japan was the occasion of a great national disaster. It was the cause of a civil war, and there was much bloodshed before it came to an end. Since that time Christianity had been repressed with great severity, and professing Christians were punished with death. Since Japan was opened to foreign commerce they had been treated much more leniently. The practice of causing supposed Christians to trample on religious emblems had been abolished, and milder punishments had been substituted for that of death. At the present time the government endeavored to close their eyes to the profession of Christianity, except when political motives rendered it necessary to act. And he assured Lord Granville that it was the earnest desire of the Japanese government to make progress in such a policy, as far as circumstances would allow.

Lord Granville took note of these assurances.

Iwakura then said that he would now refer to one or two other subjects on which he would be glad to hear his lordship’s views. One was that of the British troops stationed at Yokohama. He had not forgotten the regrettable circumstances which had led to their being stationed there, but did his lordship not think that the time had arrived when they might be withdrawn?

His lordship promised to consider this matter.

Terashima then placed in Lord Granville’s hands a memorandum on the subject of the Shimonoseki indemnity. His lordship observed that in this country it was usual when an agreement was made that it should be adhered to, and he inquired whether the memorial suggested an equivalent for the three installments still remaining due, to which Terashima replied that it did.

W. G. ASTON, Interpreter.

No. 3.
Memorandum of an interview between Earl Granville and Iwakura, chief Japanese embassador, at the foreign office, December 6, 1872. Sir Harry Parkes, Terashima, Japanese minister plenipotentiary, and Yamaguchi, associate embassador, were also present.

Lord Granville inquired whether his excellency had anything to say. The embassador replied he had not, whereupon Lord Granville observed that the only response he had received to his statement of the views of Her Majesty’s government at their previous interview had been a relation of the difficulties which existed in the way of meeting them. He could, however, appreciate his excellency’s difficulty in speaking openly on subjects he was not authorized to treat on.

Iwakura then said that he would be glad to receive answers from his lordship on the two points named at their last interview, viz, the maintenance of a military force at Yokohama and the Shimonoseki indemnity.

Lord Granville replied that Her Majesty’s government were responsible to the nation for the safety of the legation which had been sent to Japan, and that it was necessary in the interests of both countries that the legation should be efficiently protected. At one time the force stationed at Japan amounted to 2,000 men, which was a little army, but now all regular troops had been withdrawn, and only a small body of marines was left, amounting to little more than a guard of honor to the legation. Sir Harry Parkes would report, from time to time, upon the state of affairs in Japan, but the British government must feel perfectly assured that no outrage upon Englishmen was again likely to occur before they could undertake the responsibility of entirely withdrawing this guard.

Iwakura wished to explain the altered state of affairs in Japan of late years. When British troops were first sent to Japan, was a time of great confusion. The whole constitution of the government was being changed. Since then, however, the governing power had become centralized in the hands of the Mikado, and more friendly relations with foreigners had been the result of the settled state of government which now existed. He could assure his lordship that no danger any longer existed for foreigners in Japan, and hoped that the British government would place sufficient confidence in this assurance to withdraw the troops.

Lord Granville admitted that a great change for the better had taken place in Japan, and said that the force stationed there had been diminished in proportion to the improvement made. Her Majesty’s government, however, felt that a weighty responsibility rested with them in this matter, and that, until they had arrived at the same conviction as his excellency, they would not consent to the entire withdrawal of the troops. The, only object of the maintenance of a force at Yokohama was to prevent the possibility of disagreeable occurrences which might jeopardize the friendly relations between the two countries.

Iwakura pointed out that the presence of these troops was injurious to the Mikado’s government. Their relations with England were more intimate and extensive than those with any other country, and the influence of England’s example would have much weight with other countries. He regretted exceedingly that his explanation was not considered sufficient, and he feared that the retention of the troops might be looked upon as indicating a less friendly feeling between the two nations than was desirable.

Lord Granville said that of the friendly disposition of Her Majesty’s government there could be no doubt, but they could not undertake the responsibility of removing the troops until further reports had been received.

Iwakura regretted that the explanation he had offered had not elicited a more satisfactory reply from his lordship.

Lord Granville then proceeded to the question of the payment of the Shimonoseki indemnity. His lordship observed that when two governments make an arrangement it was unusual for one of them to seek to withdraw from it. In the last correspondence which had passed upon the subject, the Japanese government had solemnly guaranteed the payment of the indemnity on the 15th of May, 1872. In the memorandum handed in by Terashima his lordship could find no mention of an equivalent for the indemnity, although one was stated by Terashima to be contained in it. In this matter, however, Her Majesty’s government did not wish to make a bargain. Their opinion was that a mere question of money ought not to interfere with the much larger question of the friendly relations between the two countries. He would, therefore, state to the embassador that if, on the return of the embassy, the experience they would doubtless have gained in the mean time led them to make such representations as would induce their government to move in the line of policy indicated at the last interview, he would be happy to consider favorably with his colleagues the question of the indemnity.

Iwakura wished for a more precise statement of Lord Granville’s views.

Lord Granville reminded him of the position they both occupied. Iwakura was without instructions to negotiate or to declare the views of the Japanese government, and yet he wished to obtain from him a statement of the views of Her Majesty’s government. This position was objectionable, as being entirely one-sided. He had, nevertheless, shown no hesitation in indicating to the embassadors how friendly feelings might be promoted and commercial intercourse extended. If progress were made in this direction, he would then be ready to consider with his colleagues the question of the indemnity.

Iwakura replied that, on his return to Japan, he expected to be able to carry out what he conceived to be most conducive to the interests of Japan and other countries, and he felt confident that a good understanding might be come to when the treaties were under revision. To give an example: it was desirable that foreigners should be allowed to travel in the interior of Japan just as in England, and, although the question was beset by numerous difficulties, he hoped that, by means of good regulations, traveling in the interior might be made safe and agreeable.

Lord Granville said that he was aware that they had difficulties to contend with, but that he was confident much might be looked for from the favorable reports of a distinguished embassy like the present. He felt sure they would take statesmanlike views of these and other points, and he therefore hoped that some means might be arrived at of meeting the views of Her Majesty’s government in a reasonable and practicable way.

Iwakura wished to point out that the indemnity was a question quite distinct from that of the revision of the treaty. He had always understood that the desire of the British government was not to receive money, but to remove prejudices and to promote commerce between the two peoples. They had, therefore, in the first instance, asked for the opening of Shimonoseki, or some other port, as an equivalent for the payment of the indemnity. This demand it was at that time impossible to concede, and it therefore became necessary to fall back upon a money payment.

Sir Harry Parkes remarked that, after much discussion and frequent delays, it was eventually decided in May, 1869, that the remaining installments should be paid on the 15th May, 1872. No mention was then made of any equivalent having been given for the payment of the indemnity. This was now urged for the first time.

Lord Granville repeated that Her Majesty’s government had no wish to drive a bargain in this matter. Their right to the money payment was indubitable, but if they found that the views of the Japanese government were becoming more progressive, he would recommend his colleagues to consider the question of remitting the payment of the remaining installments. The removal of restrictions on intercourse and commerce, which was all that was asked for, was as advantageous to Japan as to other countries. He asked them to do nothing hurriedly, but only pointed out the direction in which they ought to move in order to place relations which were already good on a still better footing. If the Japanese government did so, the British government would not haggle about a sum of money.

Iwakura asked if he was to understand that he could look for no more definite answer until the return of the embassy to Japan.

Lord Granville admitted that such was the case. As the embassador was unable to negotiate, he could only express his own views very generally.

Iwakura urged that the indemnity had no relation to the revision of the treaty.

Lord Granville observed that the tone of his excellency’s remarks would seem to imply that he expected a concession without offering any equivalent.

Iwakura replied that he thought the memorandum which he had handed in showed that by constructing light-houses and in other ways an equivalent had been given.

Lord Granville said that, the ratification of the treaty and the revision of the tariff, which were referred to in the memorandum, could not be considered in this light. The latter was our right, and the refusal of the former would have been a hostile act. The light-houses were an advantage to Japan as well as to foreign countries. Did his excellency mean, when he spoke of the light-houses as an equivalent, that the Japanese government would pledge themselves never to levy any light-dues on foreign ships?

Iwakura asked if such a pledge would be accepted as an equivalent.

Lord Granville said that he was not prepared to say that it would. He did not, however, wish to make this a matter of money calculation, but would much prefer to remit the payment entirely if the desired advances were made in the general policy of the Japanese government.

Iwakura then asked if the demand for payment would be deferred till the return of the embassy to Japan.

Lord Granville replied that, without making any positive agreement to that effect, and in consideration of the assurances he understood the embassador to offer, namely, that the Japanese government would advance in the line of policy previously indicated, he would consent to maintain the statu quo both in respect to the payment of the indemnity and to the duties upon tea and silk until the return of the embassy.

The interview then terminated.

W. G. ASTON, Interpreter.