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in the fut berter
35
When the whole line to Yunnan-fu is completed, the Company will be entitled to deduct from the gross receipts the expenses of working and maintenance calculated according to a given formula besides a sum of 400,000 francs to pay interest on its shares and the general expenses of administration. Should the gross receipts fall short of this amount, the deficit up to 2,000,000 francs will be carried to a suspense account and be covered by the surplus of receipts over expenditure in subsequent years.
When there is a surplus, after covering previous deficits, the balance up to 1,000,000 francs is to be shared equally between the Company and the Colony; of the next 2,000,000 the Company is to receive one-third and the Colony two-thirds; above 3,000,000 (not 8,000,000, likely OCR error given the context) the Company is to receive one-fourth and the Colony three-fourths. But before the surplus is divided a sum of 2,000,000 francs is to be deducted to form a reserve fund in anticipation of any future deficit. The share of profits accruing to the Colony is to be deducted from the amount of the guaranteed interest on the bonds to be furnished by it.
Thus the shareholders have a prospect of receiving a high rate of interest for their money, while the bondholders are assured at least 3%, but more probably 4%, upon the price of issue.
These figures are extracted from the agreement between the French Government and the concessionaires who undertake to form the Company, annexed to the law of July 5th, 1901, copy of which was published in the "Journal Officiel", and enclosed in Your Lordship's Despatch to this Legation No. 183 of August 7th, 1901.
It is for the Government of Hongkong to decide whether in their opinion the financial position of the Colony would admit of their taking a leaf out of the French book