PORTMAN, Acting Chargé d’ Affaires in Japan to William H. Seward, May 29, 1866

Mr. Portman to Mr. Seward.

Sir: On the 26th instant I received a letter, of which I herewith transmit copy, (enclosure No. 1,) from the acting agent of the Oriental Banking Corporation at this place, dated the 16th, informing me that the third instalment of the Simonoseki indemnity, namely, five hundred thousand dollars, ($500,000,) had been received from the Japanese government, and was held by him subject to the order of the foreign representatives.

The promissory note, deposited for that amount by the Japanese government, as stated in my despatch No. 7, of the 15th February, had thus been paid. The first instalment of the indemnity was remitted to London, as reported in my despatches Nos. 13 and 14, of the 11th and 13th April, respectively. The total amount thus held by the Oriental Bank at this place, for the four powers who signed the convention of the 22d October, 1864, was one million of Mexican dollars, ($1,000,000,) making the second and third instalments of that indemnity. In view of such a large amount of money lying idle in the vaults of one single bank at this place, the representatives of Great Britain, France, and the Netherlands, in order to avoid unnecessary responsibility, desired the remittance of that money to our respective governments. Its safety being a paramount consideration I assented to this proposal, and accordingly authorized the manager of the Central Bank of Western India to receive one-fourth part of the amount named—namely, two hundred and fifty thousand Mexican dollars—from the Oriental Bank, and invest that money in undoubted sterling bank bills of exchange, payable to your order.

I transmit No. 2, copy of the joint letter addressed to the acting agent of the Oriental Bank, announcing the division of the whole amount of the indemnity money held by him.

I also transmit No. 3, copy of my letter to the acting agent of that bank, authorizing the transfer as above stated; and No. 4, copy of my letter of instruction to the manager of the Central Bank of Western India, and No. 5, copy of his reply.

The British deputy assistant commissary general, who received the first instalment of the indemnity, had no instruction to receive any additional amounts; and in the absence of instructions for my guidance, and for the purpose of securing the safe and prompt remittance of the amount belonging to the United States, I concluded to adopt the course of action as above stated.

The rate at which this remittance is made, you will perceive, is much more favorable than the British official rate, at which the remittance of the first instalment has been made. There is unfortunately stagnation in business at this place, and the sudden demand for bills for a comparatively large amount slightly depressed the rate of exchange, which, I beg to assure you, is the most favorable one for undoubted bank bills that could be procured at present.

I transmit herewith No. 6, the original account of the manager of the Central Bank of Western India, together with the seconds of six sets of bills on London, at six months, for the aggregate amount of fifty-six thousand seven hundred and seventy pounds sixteen shillings and eight pence sterling, (£56,770 16s. 8d.,) payable to your order.

The first of these bills will be sent by me by the English mail, which leaves to-morrow morning, to Messrs. Baring Brothers & Co., London, the agents of the United States, for acceptance. I enclose No. 7, copy of my letter to Messrs. Baring Brothers & Co. The thirds of these bills will be transmitted to you by the next mail, within two weeks from this date. This large amount of money had either to be kept here or remitted without delay. I adopted the latter alternative, as best subserving the interests of the United States, and involving the least responsibility, if any, and I feel confident, therefore, that you will be pleased to approve of my action.

I have the honor to be, sir, very respectfully, your most obedient servant,