No. 74.
Mr. Foulk
to Mr. Bayard.
Seoul, Corea , January 29, 1886. (Received March 25.)
Sir: I would respectfully inform you that there has been recently much discussion here, involving the Corean Government, the representatives of England, Germany, myself, and the foreign residents at Chemulpho, in regard to the terms of the “agreement respecting the general foreign settlement at Chemulpho,” a copy of which was transmitted to the Department with Mr. Foote’s No. 95, dated July 21, 1884.
By this agreement upset prices of lots are fixed, and the lots may be sold at auction. The proceeds of sales of land are to be handed to the Corean authorities, who will furnish title deeds. Interpreting: the agreement with considerations of the British treaty with Corea, upon which the agreement is largely based, the sites of foreign settlements shall be purchased from the owners and prepared for occupation by the Corean Government, and the treaty quoted reads: “The expense thus incurred shall be a first charge on the proceeds of the sale of the land.”
More than a year ago the site for the general foreign settlement was marked out and partially prepared by the Corean Government. Some fourteen lots were taken up by German subjects, but thus far no title deeds have been issued. Many other foreigners of China and Japan came to Corea with the view of buying land at Chemulpho, but failed to do so, and returned after protesting against the terms of the agreement, [Page 208] which they expressed as being extraordinarily exacting. The specially objectionable features were the high upset prices fixed by the agreement, and the limitations imposed in regard to qualities and costs of buildings to be erected on the lots purchased.
As there have not been any bona fide land-owners (no title deeds having been issued), no regularly qualified municipal council has been elected for Chemulpho. A provisional council has served until the present time, and the few expenses incurred by the settlement have been defrayed by voluntary subscription.
Recently the German subjects pressed the Corean Government for title deeds through their representative in Seoul, but in arranging for the payment of prices of their lots they vigorously protested against paying the whole amounts over to and to be retained by the Corean authorities, on the following grounds:
- (1)
- That the Corean Government was entitled to only the amount of proceeds of sales of land it had expended in laying out and preparing the sites of the settlement; the balance was by agreement to be returned to the municipal council.
- (2)
- There being no regularly elected municipal council, and as the expenses of the settlement have been defrayed by voluntary contributions of the foreign residents, the excess of the proceeds of land sales by the Corean Government above the amount spent by it on individual lots should be remitted. Purchasers should only pay to the Corean Government for their land exactly what it had spent upon the land prior to and in order to effect the sale of it, as provided for in the agreement.
The German representative asked the Corean Government to state the total amount expended by it upon the settlement in preparing the site. This amount he proposed dividing by the whole number of lots in the settlement, and to regard the result as the amount to be paid by the purchaser of any one lot in order to receive his title deed.
The Government stated it could not furnish an estimate of the whole amount spent by it in preparing the site of the settlement. It was then agreed by the Government and the representative of Germany that the German purchasers should give to the Corean authorities one-third of the full price at which they bought the land, receiving a receipt for the whole amount and their title deeds.
Mr. Budler, the German representative, frequently discussed this subject with myself and the English consul-general. He claimed that the fractional payment of the price at which the land was offered per agreement was in accordance with the agreement fully. While I admitted much reason for the light in which Mr. Budler viewed this method of payment, I stated that I should insist that in case American citizens should purchase lots at Chemulpho, they should pay the full price at which it was sold to them under the agreement; and that, to say the least, the fractional method proposed by him might establish a precedent tending to occasion difficulties in the future government of the settlement. Mr. Budler’s estimate, agreed to by the Corean foreign office, that one-third of the proceeds of land sales under the agreement prices was sufficient to fully meet the expenses incurred by the Government in preparing the sites, seems to me to be ample, as I am aware that much of the land of the settlement was originally owned by the Government, having never been owned privately, and other expenses, as for the purchase of the remainder of the land, removing houses, marking out lots, &c., were but trifling.
It will be seen that Mr. Budler’s method of payment is in a measure due to the statement of the Corean Government that it cannot furnish [Page 209] an account showing its expenses incurred in preparing the settlement. This statement I am unwilling to accept, and hold that the Government is bound to keep accounts, and be able to furnish such as to show what it has spent on the site of the settlement.
I now learn that the Corean Government wishes to revoke the agreement made with Mr. Budler permitting the fractional payments of the agreement prices of land, and claims it is entitled under the agreement and treaties to retain the full proceeds of sales until their aggregate shall equal the whole amount expended by it in preparing the whole site of the settlement. Yet I have to remark that the Government is still unable to say how much it has spent upon the settlement. This view of the Corean Government, which is supported warmly by the English consul-general, is based upon the sentence of the British treaty, “these sites shall be purchased from the owners and prepared for occupation by the Corean Government, and the expense thus incurred shall be a first charge on the proceeds of the sale of the land.” That this may be a correct interpretation of the agreement respecting the settlement there is no doubt, yet the agreement does not to my mind preclude the making of payments for land on the basis, in considering them, of individual lots and not the whole settlement, and this latter system would be immediately a benefit to the purchasers of land at Chemulpho, and at the same time operate fairly for the interests of the Corean Government, putting it to no loss or inconvenience.
As a summary of my views as to the payment for land purchased at Chemulpho, I would state that in case an American citizen desires to purchase a lot there, I should instruct him to pay through me the full price, per agreement, to the Corean authorities, from whom I should procure the title-deed. I should then cause the Corean Government to inform me as to the exact amount it had spent in preparing the lot for sale and occupation, this to be determined by dividing its expense on the whole site of the settlement by the number of lots in the settlement.
This amount the Corean Government should retain, and the balance of receipts from the American citizen as the price of his lot I should ask if necessary the Corean authorities to pay at once to the municipal council of the settlement, should there be such a council at the time; should there be no council, this balance should be paid to me, and if the expenses of the settlement are then being met by voluntary contributions of the foreign residents, as is now being practiced, I should feel it proper to return the balance to the American citizen, who will then own the lot.
I have already in the preceding shown that the general agreement in regard to the settlement is bitterly complained of. In framing it, Kobe, Japan, was taken as the model oriental foreign settlement; it was framed entirely, with only passive consideration, apparently, by other foreign representatives, by the English consul-general, Mr. W. G. Aston. In my opinion, its terms are such as to have greatly retarded the growth and prosperity of the settlement. It is true that the same terms of agreement have worked well at Kobe, but I think that the fact has been overlooked in applying them to Chemulpho, that Kobe is a later port in Japan, that Yokohama and Nagasaki had already, when Kobe settlement was planned, absorbed the smaller traders long since, and that these had at those places grown into merchants of capital, some of whom could take up their residence and trade in large establishments at Kobe, under the exacting terms of that municipality. Chemulpho is the first port of Corea which has been prepared to receive foreigners, and the pioneers who would settle there are in most [Page 210] cases merchants of small means, who are shut out from profitable trade in China and Japan; and again, even firms with capital do not care to invest largely in the experiment of conducting trade in so new and unknown a country as Corea. The agreement is advantageous to the wealthy English firms in the East, in that it preserves a clear field for them to take up and absorb the trade of Corea the instant the time shall come for them to do so; this may account for the vigorous support given it by the English representatives in Peking, Seoul, and Tokio. By all other persons it would appear to be strongly and unfavorably criticised.
As yet the Russian representative has not signed the agreement, the signers of which are, to date:
- The Corean Government,
- The German commissioner (since relieved),
- The United States minister,
- The English minister (Sir Harry Parkes).
The German representative is strongly urging a revision of the agreement, and in view of this and the objection to the agreement expressed on all sides, I have thought it well to address the Department, as by this communication, and request instructions to apply in case revision is decided upon, or in case the agreement is to continue in operation as well.
I am, &c.,
Ensign, U. S. Navy, Chargé d’Affaires ad interim.