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4,000,000%. An account of the said loan service reserve fund will be rendered yearly to the Board of Commissioners, the Wai-wn Pu, and the Board of Revenue, and the fund will be drawn upon only in the case of the revenue of the railway lines being insufficient to meet the service of interest and principal of the loan. On redemption of the loan being completed, the balances of this fund will revert to the Chinese Government. This fund may, however, be used towards the final redemption of the loan, due notice, however, to be given to the Syndicate Banks of the intention of the Government to so use the fund.
30. Literally taken from Article 31 of the Preliminary Agreement with the addition at the end of "such transfers, sub-transfers, delegations, or sub-delegations to be subject to the approval of the Imperial Chinese Directors,"
31. The Imperial Chinese Government may affix on the railway telegraph poles such wires as they may any time deem necessary for the Government service and likewise the Chinese Telegraph Administration may also affix on the railway telegraph poles such wires as the Telegraph Administration may require for their service, and for so affixing wires on the railway poles the Telegraph Administration shall contribute towards the cost of the erection of the poles and of their annual maintenance in proportion to the number of wires owned by the Telegraph Administration to those owned by the Railway Administration. The Railway Administration shall not accept any commercial telegrams for transmission over their lines excepting under special arrangements with the Telegraph Administration.
52. The Imperial Government shall take all reasonable measures to protect the property of the railway in case of need, and should at any time the Board of Commis- siouers deem policing necessary at any point on the line it shall be supplied by and at the expenses of the Railway Administration. Under no circumstances must any foreign force be sent on the line or be posted about the station premises.
33. The railway shall not carry any mails other than those dispatched by the Imperial Chinese Postal Departments and shall observe such regulations as the Imperial Government may adopt from time to time in respect of mail matters conveyed by the railway, The railway service mails may, however, be conveyed free of restrictions.
34. Differences arising between the Imperial Directors and the Syndicate Banks shall be submitted to two Arbitrators, one to be nominated by each side, and in the event of such Arbitrators being unable to agree they shall themselves appoint an Umpire whose decision shall be final and binding.
35. The provisions of this Agreement shall after signature be memorialized to the Throne by the Imperial Directors for ratification by an Imperial Edict, which shall be communicated by the Wai-wu Fu to the Ministers for Germany and Great Britain in Peking.
36. Five sets of this Agreement are executed in English and Chinese, one set to be retained by the Wai-wu Pu, one set by the Board of Commerce, one by the Imperial Directors, and one by each Syndicate Bank. In the event of any doubt arising regarding the interpretation of the contract the English text shall rule.
Inclosure 2 in No. 1.
Final Agreement.
IN accordance with Article 33 of a Preliminary Agreement which under the date of the 18th May, 1899, has been signed at Peking on behalf of the Imperial Government of China and an Anglo-German Syndicate for the construction of railways from Tien-tsin to the Yang-tsze-Kiang, the following Final Agreement has now been made between duly authorized to act on behalf of the Imperial Govern-
ment of China, hereinafter called the Imperial Directors of the one part, and (a) the Deutsch-Asiatische Bank, Shanghae; (b) Messrs. Jardine, Matheson and Co., as agents for and on behalf of the Chinese Central Railways, Limited of London, hereinafter called "the Syndicate," of the other part.
1. The Imperial Government of China authorises the Syndicate to issue a 5 per cent, gold loan for an amount of
millions
hundred thousand
pounds sterling.
The loan shall be dated the Chinese 5 per Cent. Tien-tsin-Yang-tsze Railway Loan."
and called "The Imperial
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2. The loan is designed to provide the capital for the construction of a Government railway line from a point connecting the trunk line with the Imperial railways of North China, at or near Tien-tsin, through Tetschou, Tsiuanfu, Yentschoufu and Ihsien (district) to the southern frontier of Shantung, called the northern section, and further from this frontier, through Likuo, Hsutchou, Linkwai to Pukou (Nanking), called the southern section of the line The total length of the lines is estimated to be about 1,085 kilom., equal to about 2,170 Chinese li.
3. The capital so provided will include the funds required for the purchase of the necessary land, rolling-stock, and other equipment, and for wording the lines, together with interest on the loan during the period of construction, which is considered to be four
years from the actual beginning of the works, the commencement of the works not to be delayed beyond six months after this Agreement has been signed. Construction shall proceed simultaneously for the German section to the north and to the south of Tsinanfu, as well as for the English section to the north of Pukow.
4. The rate of interest for the loan shall be 5 per cent, per annum on the nominal principal of each call, and shall be paid by the Boarils of Commissioners in half-yearly instalments for account of the Imperial Chinese Government during the time fixed for the construction, out of the proceeds of the loan, and afterwards out of the revenue of the lines named as far as this will be sufficient; the deficient amount shall be met by the Imperial Chinese Government from other sources.
5. The term of the loan shall be fifty years. Repayment of principal shall com- mence in the eleventh year from the date of the loan, and shall be made by a yearly sinking fund to the Deutsch-Asiatische Bank and to the bank nominated by the Chinese Central Railways (Limited), viz. the Hong Kong and Shanghae Banking Corpora- tion, who have signed this Agreement as evidence of their acceptance of the duties imposed upon them under this Agreement in yearly instalments according to the amounts and dates of the Schedule attached to this Agreement out of the revenue of the lines as far as this will be sufficient; the deficient amount shall be met by the Imperial Chinese Government from other sources.
Therefore the whole annual net revenue of the two sections of the railway shall be thrown together to cover the requirements of the service of the loan for interest and sinking fund, and the respective necessary amounts for this service shall be put at the disposal of the Boards of Commissioners. The remaining of the pooled sums is to be divided in proportion of 65 per cent, for the German section, and 35 per cent. for the English section, and rendered to the respective Boards for further application as indicated by Article 28 of this Agreement.
6. In the event of the Imperial Chinese Government wishing to redeem after the lapse of
years from the date of the loan the outstanding amount or any portion of it, not yet due, from funds bona fide belonging to the Chinese Government or subscribed by Chinese merchants, the conditions for such redemption must first be arranged with the Syndicate when the time arrives. Such premature redemption or an increase of amortization will not take place before the year.
7. After the line has been completed the yearly payments due for amortization and the half-yearly payments due for interest shall be made, in accordance with the amounts and dates of the Schedule attached to this Agreement, to the Deutsch-Asiatische Bank and to the Hong Kong and Shaughae Banking Corporation, in Shanghae or Tien-tsin, twenty-one days before the due dates named in the Schedule, by funds in Shanghae or Tien-tsin sycee sufficient to meet such payment in sterling in Europe, the rate of exchange for which shall be settled with the two banks at the best procurable rate of exchange. These payments will be made out of the net revenue of the railway lines by the Boards of Commissioners hereinafter mentioned, and in case of deficiency of this revenue by the Imperial Government of China.
In reimbursement of expenses connected with the service of interest and principal of the loan the two banks will receive a commission of per cent, on the annual loan service.
8. This entire loan shall be secured by a first mortgage on the permanent way, rolling-stock, and entire property, together with the revenue of the lines named in clause 2.
No further loan, charge, or mortgage shall be charged on this security, except with the written consent of the Syndicate, until the present loan is redeemed. In the event of default in payment of interest or repayment of principal of this loan on due dates, the railway lines and property so mortgaged shall be handed over to the Syndicate, to be dealt with in such manner as may be legal and necessary for the full and effective protection of the bondholders. When the loan is completely redeemed clause 27 of this Agreement shall take effect.
7.