350 francs. Further, the Colony engages to construct the line from Haiphong to Laokai, and hand it over to the Company with rolling stock complete. The Company on its side has to construct and equip the workshops, to furnish the stations and provide the tools for maintenance of the line, in return for a payment by the Colony of 2,000 francs per kilometre completed.
Bonds for the Laokai-Yunnan-fu line may be issued, as soon as one-fourth of the share-capital is paid up, at a price of not less than 76 francs per 100 francs nominal. The paid-up capital will receive 4% interest during the period of construction.
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, 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