No. 79.
Mr. Bayard to Mr. Parker.

No. 8.]

Sir: I have received Mr. Foulk’s No. 274, of the 29th of January last, in relation to the difficulties that have been encountered in the organization and establishment of the general foreign settlement at Chemulpho.

The attempt to organize a foreign settlement there has been made, as you will find, under an agreement with the Corean Government, which has been signed by the representatives of the United States, Great Britain, and Germany, in Corea, and of which a copy was transmitted to this Department with Mr. Footers No. 95, of the 21st of July, 1884.

[Page 220]

Under that agreement the Corean Government undertook to cause all Corean houses within the limits of the settlement to be removed within a specified time, and to prepare the land for sale to the citizens or subjects of the signatories. The upset prices of lots were fixed, and it was agreed that they might be sold at public auction.

It was further agreed that a yearly rental of a certain sum per 100 square meters should be charged on each lot, according to the class to which it belonged; that of this sum 30 cents per 100 square meters should be retained by the Corean Government, and that the remainder, together with any balance left from the proceeds of land sales, after deducting therefrom the cost to the Government of the preparation of the lots for sale, should belong to the municipal fund.

This fund was to be under the control of a council, to which the police power of the municipality was committed, and the council was to consist of a Corean official, the consuls of the signatory powers, and three registered land-holders who, were “to be selected by the other registered land-holders.”

The settlement was marked out by the Corean Government more than a year ago, and about fourteen lots have been taken up by German subjects, but as yet no title deeds have been issued. And as there are thus no registered land-holders, no council has been elected.

This delay in the organization of the settlement seems to be due, in part, to the failure of the Corean Government to keep any account of the expenditures made in the preparation of the land for sale and occupation. It was proposed to the Corean Government by the representative of Germany to divide the whole cost of preparation by the number of lots, and to treat the result as the amount to be paid to the Government by the purchaser on each lot. But, as no account of the expenditures had been kept, no such arrangement could be effected, and it was then agreed that the German purchasers should pay to the Corean authorities one-third of the full price of the lands, receiving therefor a receipt for the whole amount and their title deeds.

This arrangement the Corean Government now desires to undo, claiming the right, under the original agreement, to receive and retain all the proceeds of the sale of land until the aggregate shall equal the amount expended in preparing the whole site of the settlement.

To this contention there are two objections: the first being the fact already adverted to, that the Government is unable to tell how much it has spent on the settlement, and the second that such a course would leave nothing immediately available from the proceeds of the sale of lots for the use of the municipality.

These complications seem to make it expedient to endeavor to effect some revision or amendments of the agreement on terms as favorable to the purchasers as can be obtained, at the same time taking care to protect the interests of the municipality as a whole. A fair basis for such an arrangement would seem to be a division or apportionment of the price of each lot purchased between the Government and the municipality, allowing to the former the average cost of preparation, or a sum agreed upon as equivalent thereto, and turning over the balance of the purchase money to the latter.

Until some definite arrangement shall have been made, the course recommended by Mr. Foulk in his No. 274, in case an American citizen should desire to purchase a lot, may be adopted with the concurrence of the Corean Government.

I am, &c.,