[Untitled], the 13th day of the 4th month of the 3d year of KeU, (May 16, 1867.)

[Untitled]

His Excellency R. B. Van Valkenburgh, Minister Resident of the United States of America, &c., &c., &c.:

We have the honor to hand you herewith a letter containing our proposition in relation to the foreign settlements at Hiogo and Osacca.

Please inform us if they are satisfactory.

[Untitled]

Arrangements for the establishment of a foreign settlement at the port of Hiogo and at Osacca.

1. The Japanese government will form at Hiogo a settlement for foreigners of all nations having treaties with Japan, on the ground situated between the town of Kobe and the Ikuta river.

The Japanese government will raise that portion of the ground colored red, on the annexed plan, and will give it such an incline toward the sea as is necessary for the thorough drainage of the site. They will also construct an embankment, faced with stone on the sea front of the said site, of not less than 400 ken in length, and will provide such roads and drains as may hereafter be determined on.

2. As soon as all the grounds thus prepared in accordance with the preceding article, for the use of the foreigners above named, is occupied and more space is required, the settlement may be extended towards the hills at the back as far as may be found necessary, and Japanese owning ground or buildings in the town of Kobe will then be at liberty to lease the same to foreigners if they wish to do so.

3. The Japanese government will set aside the site shown on the annexed plan, and colored red, within which foreigners may, in the terms of the treaties, hire houses and reside at Osacca. But no Japanese shall be compelled to rent any buildings to foreigners within the said site against his will; and as the Japanese government are willing that foreigners of those nations having treaties with Japan should enjoy at Osacca the same facilities for leasing ground and building houses as are secured to them by treaty at the Porte, the Japanese government are prepared to lease to foreigners, for building purposes, that portion of land on the same plan which is colored blue. The Japanese government will raise the ground now under cultivation on the west face of the latter site to the level of the other portion of the ground within it, and will embank it with stone. The necessary roads and drains will be provided and the trees will be carefully preserved.

4. The above-mentioned site for building purposes shall be extended in a southerly direction as far as may be found necessary, whenever it shall have been occupied by the foreigners above named, and more space is required for their use.

5. The Japanese government will prepare the said site at Hiogo and Osacca, in the manner above stated, in time for the occupation of foreigners on the 1st of January next.

6. The Japanese government will be reimbursed the cost of preparing the said sites for the use of the foreigners above named by the sale of the leases of the ground. The land will be divided into lots, and prices placed upon the different lots which will vary with the eligibility of the situation, but will amount in the aggregate to the total outlay incurred by the Japanese government. This outlay will form the basis for calculating the upset prices at which the lots will be offered to foreigners at auction. The foreigners of all nations having treaties with Japan may bid at these auctions, and each bidder may obtain as much land as he requires. The money realized above the upset price will be retained by the Japanese government as compensation for deprivation of interest on capital, and for the risk that may be incurred of not recovering their outlay.

7. All the ground leased to foreigners at Osacca and Hiogo will be subject to the payment of an annual rent calculated at a rate that will be considered sufficient to meet the expenses of keeping in repair the roads and drains, the cleansing and lighting of and maintaining order in the settlement, and the ordinary land tax payable at the present date to the Japanese government.

8. The Japanese government will not grant or dispose of any of the ground set aside by the preceding articles for the establishment of foreign settlements at Hiogo and Osacca to any foreign government, company, or individual, for building or other purposes, except at public auction, in the manner laid down in the preceding articles. The foreign consuls will not be provided with separate grants of land by the Japanese government, either within or without the foreign settlement.

9. In determining the upset price of all the land to be thus leased to foreigners at Hiogo and Osacca, the amount of annual rent, the number and size of the streets, lots, and drains, the quantity of the ground to be put up to auction at one time, the conditions and date of sale, and the formation of the cemeteries hereinafter mentioned, the Japanese government will consult the foreign representatives.

10. Insurable warehouses, in which the goods of foreigners may be stored in bond, will be provided by the Japanese government, both at Hiogo and Osacca, in the same manner as is stipulated in the convention of Yedo. At the former place the space colored blue on the annexed plan will be reserved by the Japanese government for this and other official purposes, and the dock now commenced will be removed.

11. The Japanese government will form a cemetery for the use of all nations, at Hiogo, on the hill in the rear of the foreign settlement, and another at Osacca, at Zuikensan. The Japanese government will lay out the cemeteries and surround them with fences. The expense of maintaining and repairing the cemeteries will be borne by the foreign communities.

12. The Japanese government will select at Yedo, in concert with the foreign representatives, a port on the west coast, at which a foreign settlement may be formed, as well as the place within which houses may be rented by foreigners at Yedo. Those will be made in accordance with the treaty and convention above mentioned, and on the basis of the present arrangement.