Mr. Hay to Mr. Buck.

No. 402.]

Sir: Referring to the Department’s No. 399, of the 12th instant, I inclose herewith copies of further memoranda exchanged between the British ambassador and the Department relative to the reference to arbitration of the question of the Japanese Government’s right to impose a house tax in respect to buildings which are held under perpetual lease.

The Department desires it to be made clear to the Japanese Government that the Government of the United States is of the opinion that the scope of the reference should be such as to include and settle all questions in controversy relative to the imposition of charges and taxes of whatever style and character.

I am, etc.,

John Hay.
[Inclosure 1.]

Memorandum.

Lord Lansdowne has learned with much pleasure that Mr. Hay’s views with regard to the scope of reference to arbitration of the question of the Japanese Government’s right to impose house tax coincides with his own, but his Lordship has received a telegram from the British minister at Tokyo from which it appears that the Japanese minister for foreign affairs has frequently informed him that the United States Government have not protested, and are in agreement with the Japanese Government respecting the interpretation of the disputed clause of the treaty.

Lord Lansdowne trusts therefore that Mr. Hay may see his way to send further instructions immediately to the American representative at Tokyo requesting him to press for the wider scope of reference to arbitration which is being urged by His British and German colleagues.

[Inclosure 2.]

Memorandum.

The memorandum of the British ambassador dated April 19, 1902, states, with reference to the matter of the arbitration of the question of the Japanese right to impose a house tax with respect to buildings which are held under perpetual lease, that the Marquis of Lansdowne has received a telegram from the British minister at Tokyo from which it appears that the Japanese minister for foreign affairs has frequently informed him that the United States Government have not protested and are in agreement with the Japanese Government respecting the interpretation of the disputed clause of the treaty, and expresses the hope that the American representative at Tokyo may be instructed to press for the wider scope of reference to arbitration which is being urged by his British and German colleagues.

While the Government of the United States may not have actually protested against the imposition of the house tax, its minister at Tokyo was, as long ago as December 18, 1901, instructed that American citizens should pay the taxes under protest, reserving all legal rights.

Upon the assurance of the Japanese Government that the United States Government and citizens should have the full benefit of the award, whatever it may be, as though they were a party to the arbitration, the Government of the United States expressed to the Japanese Government its willingness to abide by the result of the proposed arbitration.

As was stated in the memorandum of the Department of State of April 12, 1902, the minister of the United States at Tokyo was on the same day instructed to make proper representations to the Japanese Government in support of the view that the question in all its bearings should be referred for final settlement by the proposed arbitration.

[Page 712]

It is not seen wherein these instructions can be augmented. The minister has, however, this day been instructed to make it clear to the Japanese Government that in the opinion or the Government of the United States the scope of the reference should be such as to include and settle all questions in controversy relative to the imposition of charges and taxes of whatever style and character.