IOS
Corporation, in consultation with the Director-General,
MR. BLAND suggested that in other respects the provisions
of the Northern Railway Loan Agreement might be mutually acceptable and undertook to redraft Article VI of the Viceroy's proposals with a view to a further consideration
of the subject.
*
202
H.E. T'ANG SHAO YI then referred to Article 20, and to
In this connection he
the question of the bonds redemption. pointed out that in the Shanghai Nanking Railway Agreement
the Chinese, owing to an error in the Chinese translation,
Government was under the impression that the bonds in that contract were redeemable at 2 per cent premium up to 12½ years and thereafter at par—a fact which emphasises the need for extreme care in preparing such contracts.
KUNG TAOTAI, referring to the Corporation's present proposals, said that the method adopted under the Shanghai Nanking Railway Agreement was opposed to all usage and that the method of redemption to be followed, conforming to other Chinese railways, was that of fixed annual repayments in
Any bonds redeemed
accordance with an amortisation schedule, before due date within the first 25 years would carry a premium of 2¼ per cent and six months' notice would be given of the Chinese Government's intention to redeem.
MR. BLAND, while undertaking to place this proposal before the Corporation, observed that these conditions might affect the saleable value of the bonds and thus further reduce the price of the loan which, as observed by the Board of Directors, is already regarded in the market as a security inferior to the Shanghai Nanking Railway.
Finally the question of Commission on materials was discussed. H.E. T'ANG SHAO YI stating that the utmost the Chinese Government can offer is to pay commission on all foreign importations, as distinct from Chinese manufactures. He estimated the probable total of such purchases at £500,000 and therefore offered to commute the commission for a lump
BLUE D
500,000