Mr. Buck to Mr. Hay.

No. 365.]

Sir: Referring to my dispatch No. 364 of the 4th instant, concerning the registration tax of 2½ per cent of the value of property held in the foreign settlements, under perpetual leases, required to be paid on registering transfers of such leases, I have the honor to call attention to the fact that the laws of Japan in respect to real property held under perpetual lease or otherwise are peculiar, especially in this, that land and buildings upon the land are regarded as separate and distinct property, and that a sale or transfer of lease of land does not include structures upon it as a matter of course, but may be sold or transferred apart from the structures and the structures likewise apart from the land.

My note to the minister of foreign affairs, it will be observed, makes no reference to the registration tax upon the value of the buildings that may have been erected by the lessees, but only upon the value of the lands for the use of which perpetual leases were granted by the Government. That, under the general law applying as well to Japanese subjects as to foreigners, I could rightfully claim exemption from such tax upon the value of the buildings, I had so much doubt that I omitted to do so, though I understand that some of the representatives here of other countries make that contention as well as for the exemption of the tax upon transfers of perpetual leases of the lands.

Thinking it proper to make the above explanatory statements to avoid any possible misunderstanding as to the extent of the claim of exemption from the registration tax presented by me to the Japanese Government,

I have, etc.,

A. E. Buck.