爽
16
Mr. Cordes, regarding the suggestion favourably as a way out of difficulties which have been shown to exist in the fixed price method, suggests that the matter should be carefully considered and further discussed at next meeting, which is fixed for Saturday the 8th instant.
Inclosure 6 in No. 1.
Minutes of the Twentieth Meeting held at the Office of the Haikwan Tastai at Tien-tsin, on Saturday, September 8, 1906.
Present:
Taotai Liang Tun-yen, representing the Viceroy. Taotai C. L. Chow,
>>
Mr. H. Cordes, representing the Deutsch-Asiatische Bank.
Mr. J. O. P. Bland, representing the Chinese Central Railways.
THE negotiatious are resumed at Article 13 of the Chinese counter-proposals or 1903.
Article 13.-It is recognized that auy Agreement as to the manner in which the loan shall be raised (ie., in one issue or more) must depend upon the terms fixed upon as to its price; this Article is accordingly discussed in connection with
Article 14.Liang Tantai expresses the opinion that a fixed price is desirable, and that the Syndicate should be able to name a figure based on present market rates, taking the profit or loss that may occur on the several issues of the loan. Mr. Cordes says that if this is to be the basis of agreement, the Syndicate is prepared to advance capital in accordance with the Preliminary Agreement-i.e., at 90-but if this is not acceptable, it should be for the Chinese Representatives to make definite counter- proposals.
The alternative of a fixed commission of 5 points on flotation being discussed, Liang Taotai observes that the Chinese Government might accept it if left free to call up the loan at its own discretion without time limit. It is pointed out that the period of construction is limited by the Agreement.
Eventually the whole question is left undecided. Mr. Bland's suggestion being accepted that the Chinese Representatives shall ascertain in what manner the Viceroy would prefer to finance the loan, three alternatives being submitted, i... (1) one issue at a fixed price; (2) several issues at one and the same fixed price; and (3) com- mission on flotation. It is explained that if the Syndicate is asked to accept the risk involved in the second method, the price will have to be materially less than under the first.
Article 15.-No discussion.
Article 16.--In the event of flotation of loan on fixed commission this Article would be superfluous, the Chinese Government being in a position to obtain funds at any time, irrespective of the market, within the construction period agreed upon.
Mr. Cordes suggests that if the second paragraph of Article 5 is deleted, as suggested by the Chinese Representatives, the original Article 17 of the Preliminary Agreement should be introduced at this point defining the respective shares and responsibility of the German and English groups in the Syndicate. considers it certain that the Chinese Government would object to such definition on the Liang Taotai ground that the Agreement is intended to cover the financing and construction of an Individed Chinese Government line; it is also observed that the effect of this Article conflicts with the whole tenour of the Syndicate's collective proposals, and in particular with the provisions of Article 15 of the Final Agreement,
(Note. The same criticism applies to the second paragraph of Article 13 of the Syndicate's Final Agreement draft.)
Article 17.--The second paragraph is amended to read, “ A Board of Commissioners for each section shall be appointed to manage the construction, equipment, and working of the railway."
Article 18-Nanking is suggested (in lieu of Chinkiang) as the most suitable place for the office of the Southern Board of Commissioners.
17
In regard to the constitution of the Boards, the Syndicate's representatives are unable to accept the Chinese proposals, their instructions being to consent to modiɓca- tion of the terms of Final Agreement by substitution of those contained in the Shanghae-Nanking oan Agreement. As regards the number of members on the Boards, however (which is five for the Shanghae-Nanking Railway, and which the Chinese propose to limit to three), Mr. Cordes considers that as a final concession the Syndicate might agree to making it four, thus placing the Chinese and foreign interests on a footing of equality. Liang Tantai states that the Viceroy attaches great importance to this question; the matter is therefore left in abeyance, it being understood that the Syndicate's proposals will be submitted to his Excellency.
The last paragraph of the 3rd clause of this Article (referring to knowledge of English by the foreign staff) is deleted as. superfluous.
Clause 5 is discussed at considerable length, the Syndicate's representatives stating that reference of questions in dispute to the absolute and final decision of the Imperial Director is impracticable and would prevent the final conclusion of the Loan Agreement.
The clause is amended to read "such question shall be referred for decision by the Imperial Directors in consultation with the representatives of the Syndicate Banks."
Clause 6 is amended to read the salaries of the members of the Boards of Commissioners shall be arranged by the Imperial Directors in consultation with the representatives of the Syndicate Banks;" the salaries of the staff, Chinese and foreign, shall be fixed and paid by the Boards of Commissioners,"
Article 19.-For "head office" the words Boards of Commissioners are substituted; the remainder of this Article remaining unchanged.
Article 20.---No discussion,
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Article 21.-Clause 2, paragraphs 2 and 3, amended to read, "shall be placed by the Boards of Commissioners in the hands of the Syndicate Banks for execution in London or Berlin as may be required. The banks shall buy the goods on the best possible terms, calling for tenders whenever necessary, &c."
Clause 3 amended by substitution of the words "all Chinese Government manufactories" for the words "Hanyang Iron Works," and deletion of the second paragraph.
Article 22.-No discussion.
Article 23.-The conclusion of this Article is amended to read "with funds at their disposal from Chinese sources, and, if foreign capital is required, preference to be given to the Syndicate Banks."
Articles 24, 25, 26, 27.--No discussion.
Article 28. The conclusion of this Article is amended "shall thereafter be managed as the Chinese Government may think fit."
At this point the meeting adjourns.
Inclosure 7 in No. 1.
Minutes of the Twenty-first Meeting held at the Office of the Haikwan Tuotai at Tien-tsin, -
on Saturday, September 15, 1906.
Present:
Taotai Liang Tun-yen, representing the Viceroy.
Taotai C. L. Chow
No
**
Mr. H. Cordes, representing the Deutsche-Asiatische Bank, Mr. J. O. P. Bland, representing the Chinese Central Railways.
The Minutes of last meeting, having been forwarded to the Chinese Representatives early in the weck, are taken as read and passed.
Referring thereto Mr. Cordes submits a draft of Article 18 (constitution of Boards of Commissioners, &c.), based on the terms of the Shanghae-Nanking Loan Agreement, wherein the number of Commissioners has been reduced to four, thus equalizing the Chinese and foreign interests.
Liang Taotai observes that, this being the most important Article in the Agreement, he would like to postpone its discussion until next meeting
[2263 a-9]
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