Mr. Hay to Mr. Buck.
Washington, November 6, 1899.
Sir: I have to acknowledge the receipt of your dispatches Nos. 364 and 365, of the 4th and 6th ultimo, respectively, concerning the registration tax of 24½ per cent of the value of property held in the foreign settlements in Japan under perpetual leases required to be paid on registering transfers of such leases.
With the former dispatch you inclose a copy of your note to the Japanese minister for foreign affairs, maintaining that such a tax is not warranted by the treaty between the United States and Japan.
The Department concurs in your view that under Article XVII of our treaty with Japan existing leases in perpetuity are to be confirmed without other conditions or burdens than those imposed by existing leases at the date of the treaty. All lands previously granted free of rent for the public purposes of the settlements remain free. In the confirmation of leases no change in vested rights can be effected by requiring them to be registered as “perpetual superficies,” if such would be the effect. But in the assignment of leases between private parties for private purposes citizens of the United States are subject to the same registration fee or charge as is imposed on Japanese subjects, unless the original leases stipulate to the contrary. This is indicated by Article II of the treaty.
I am, etc.,