Any modifications are to be reported at once by the Corporation to the Viceroy for the approval of the Wai-wu Pu.
The bonds are to be engraved entirely in the English language, and shall bear the fac-simile of the Viceroy and of his seal of office in order to dispense with the necessity of signing them all in person, but the Chinese Minister in London shall, previous to the issue of any bonds, put his seal upon each bond with a fac-simile of his signature, as a proof that the issue and sale of the bonds are duly authorized and binding upon the Chinese Government.
Such bonds are to be numbered consecutively, and as many bonds as may be needed are to be properly engraved under the supervision of the Corporation, and after they are sealed by the Chinese Minister in London, as hereintofore provided, or to be countersigned by the Corporation.
All expenses for the engraving, safe deposit, and sale of the bonds are to be borne by the Corporation.
Art. 6. When the work of construction is ready to begin, the Viceroy will establish a head office at ... for the construction and management of the railway. This office will be under the direction of a Chinese Managing Director (appointed by the Viceroy), with whom will be associated a British Engineer-in-chief and a British Chief Accountant. These British employés shall be proposed and certified as competent for their posts by the Corporation, and shall be approved by the Viceroy; in the event of their services proving unsatisfactory they shall be removable by the Corporation, in consultation with the Viceroy, upon complaint being made by either one or the other parties to this Agreement. It is understood that the duties performed by these employés are intended to promote the mutual interests of the Chinese Government and the bondholders respectively, and it is therefore agreed that all cases of difference arising therefrom shall be referred for amicable adjustment between the Viceroy and the representative of the Corporation. The salaries and other terms of agreement of the Engineer-in-chief and the Chief Accountant shall be proposed by the Corporation, for approval by the Viceroy; and the amount of their salaries, &c., shall be paid out of the general accounts of the railway.
For all important technical appointments on the railway staff Europeans of experience and ability shall be engaged, and wherever competent Chinese are available they shall also be employed. All such appointments shall be made, and their functions defined by the Managing Director and the Engineer-in-chief in consultation, and shall be submitted for the Viceroy's approval; similar procedure shall be followed in the case of Europeans employed in the Chief Accountant's Department. In the event of the misconduct or the incompetency of such employés, their services may be dispensed with by the Managing Director, after consultation with the Engineer-in-chief, and subject to the sanction of the Viceroy. The form of agreements made with European employés shall conform to the usual practice.
The accounts of the receipts and disbursements of the railway's construction and operation shall be kept, in Chinese and English, in the Department of the Chief Accountant, whose duty it shall be to organize and supervise the same, and to report thereon for the information of the Corporation. A copy of this Report shall be sent to the Viceroy by the Managing Director.
For the general subordinate technical staff of the railway the necessary arrangements shall be made by the Managing Director, in consultation with the Engineer-in-chief, and reported to the Viceroy in due course.
The duties of the Engineer-in-chief shall consist in the efficient and economical construction and maintenance of the railway, and the general supervision thereof, in consultation with the Managing Director. He shall always give courteous consideration to the wishes and instructions of the Viceroy, whether conveyed directly or through the Managing Director, and shall always comply therewith, having at the same time due regard to the efficient construction and maintenance of the railway.
A school for the education of Chinese in railway matters shall be established by the Managing Director, subject to the approval of the Viceroy.
Art. 7. Under the provisions of Article 3 of this Agreement the properties covered by the first mortgage security hereby created include the railway, its property, equipment, and the mortgage is to be executed by a deed in the form contemplated by the said Article. But subject to the guarantee and mortgage thus given by the Chinese Government, it is hereby declared that this railway is in fact a Chinese property,
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All land that may be required along the whole course of the railway within survey limits, and for the necessary sidings, stations, repairing shops, and car sheds to be provided for in accordance with the detailed plans now made, or hereafter to be made, by Engineer-in-chief, and approved by the Viceroy, shall be acquired by the Viceroy at the actual cost of the land, and shall be paid for out of the proceeds of the loan.
The titles of the land for the railway, and all other lands, shall be free from all encumbrances and entanglements, and shall from time to time, as soon as secured, be registered in the name of the railway.
Notices of all purchases of lands for the railway within the survey limit (together with corresponding title deeds) are to be transmitted by the Railway Head Office, under the direction of the Viceroy, to the local agent of the Corporation, for record and preservation in its office in Hong Kong, and for the purpose of establishing the first mortgage security, until the time when the same are to be returned to the Viceroy, as hereinafter in this Article provided.
All lands the title-deeds of which are lodged with the Corporation as part of the first mortgage security of the loan shall not be disposed of in any way by hire, lease, or sale, to any party, for any purpose whatever, without the written consent of the Viceroy, except only in the event of the Imperial Chinese Government failing to pay the interest or principal of the bonds, and then in accordance with the powers in the deed of mortgage.
The lands thus bought shall be free from all encumbrances, liabilities, and entanglements, and shall be conveyed by full and sufficient deeds of assignment, according to Chinese law, all of which are to be kept and recorded in the Hong Kong Office of the Corporation, and are to be held by it as a first mortgage security for the bonds, under the provisions of this Agreement, until such time as principal and interest of the bonds, together with all indebtedness, shall have been paid off, when the same shall then be returned to the Viceroy, except only in the case of the Imperial Chinese Government's failure to pay the interest or principal of the bonds, and consequent realization under the powers of the mortgage security.
For the proper protection of the first mortgage security the Chinese Government undertakes that until the bonds shall have been redeemed no part of the lands comprised in the mortgage security or the railway with its appurtenances shall be transferred or given to another party, or shall be injured, or that the rights of the first mortgage shall be in any way impaired, unless with the consent in writing of the Corporation, which shall only be given if in the opinion of the Corporation the interests of the bondholders will not be affected.
And, further, that until the interest and principal of the loan and all indebtedness shall have been paid off, or unless with the express consent in writing of the Corporation, the Chinese Government or the Viceroy shall not again mortgage the above properties to another party, whether Chinese or foreign.
During the period of this Agreement no special taxes shall be levied by the Chinese Government on the railway, its appurtenances, or earnings; but all taxes at present payable, such as land tax, as well as any taxes which the Chinese Government may hereafter institute, such as stamp duty, &c., and which may be applicable generally to all commercial transactions in China, shall also apply in the case of the railway and its operations.
Art. 8. It is agreed that if the half-yearly interest on the bonds is not paid on any date thereof, or if the principal of the loan be not paid in accordance with the amortization schedule hereto attached, the whole railway, with all its appurtenances, herein mortgaged to the Corporation for the bondholders, shall be handed over to the Corporation to be dealt with by it according to law in such manner as will insure the proper protection of the interests of the bondholders, provided, however, that if the failure to make payment at one date be due to causes beyond the control of the Chinese Government and if the Viceroy request the Corporation to postpone the taking over of the railway for a reasonable period of grace, the question shall be amicably discussed and decided between the Viceroy and the agent of the Corporation. When the whole loan and the interest due thereon and all the indebtedness shall have been paid off, the railway, with all its appurtenances in good working condition, shall revert to the possession and management of the Chinese Government according to the provisions of this Agreement.
Art. 9. As remuneration, &c., the Corporation shall receive the sum of 35,000l., half of which shall be paid when construction work begins and the other half upon ...
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