called the Viceroy).
445
Article 2.
The proceeds of the Loan are to be used in the construction and equipment of the Railway and in paying interest on the Loan during the course of construction.
The Railway, being the first mortgage security for the Loan, shall be built and equipped under the direction of the Viceroy, in accordance with the provisions of Article 8 hereinafter, and shall be built as economically as possible in accordance with the best modern system.
It is understood that the Viceroy will secure all the necessary land for the Railway and will give the necessary instructions to expedite and facilitate the work of construction. The Railway will be built in the first instance as a single line, but provision will be made, with the approval of the Viceroy, and wherever necessary to meet traffic requirements, for the eventual construction of a double line.
If, during the time of construction, the proceeds of the Loan, together with the accrued interest thereon, payable by the Corporation, should, after the deduction of the sums necessary for the payments of interest on the Loan, be insufficient to complete the construction of the Railway, the amount of the deficiency shall either be provided from the Chinese Government's own resources or by a Supplementary Loan to be hereafter issued by the Corporation, the Interest and other conditions of which Supplementary Loan shall be arranged when the time arrives, having due regard to the conditions of the money market.
When the Railway is completed, if there is a surplus from the sale of Bonds, the said surplus shall be at the disposal of the Chinese Government either to redeem the Bonds in accordance with the terms of this Agreement as hereinafter stated, or to be placed on deposit with the Hongkong & Shanghai Banking Corporation for the purpose of paying interest on the Loan, or for other purposes beneficial to the Railway in regard to which the Viceroy will communicate in due course.
Page 450
Page 451