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General, whether conveyed directly or through the Managing Directors, 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 Directors, subject to the approval of the Director-General.
Art. 18. The general plans, estimates, and surveys of the railway lines must be submitted for approbation to the Director-General. The Engineer-in-chief, accom- panied by a Chinese deputy, shall indicate the land to be acquired for the purposes of the railway, and the Director-General shall thereupon effect such purchases at the actual cost of the land. In the event of the route proposed by the Engineer-in-chief passing through towns, villages, graveyards, or other points where much obstruction is encountered, the Engineer-in-chief will, together with the Director-General, consider means of diverting the proposed railway route in order to avoid difficulties.
Art 19. The Director-General will endeavour to arrange with the Chinese Imperial Government regulations for the payment of li-kin and duty upon mer- chandize and live-stock in transit over the railway lines, and these regulations shall not be less favourable than any arrangements made for the same purpose with other most favoured railways in China built with capital borrowed from foreign countries.
Art. 20. All materials necessary for the construction and working of the lines obtained either from foreign countries or from other provinces of China, and the revenue derived from the railway as well as the railway's landed property shall, in virtue of its being a Government railway, be exempt from duty or taxation of all kinds, and the Imperial Government of China will instruct the Customs, li-kin, and local authorities accordingly. This exemption to continue until such time as the Imperial Government imposes duties and taxes on other lines of railways.
Tenders shall be invited in China by the Managing Directors in consultation with the Engineers-in-chief for the execution of all important indents for materials, plant, and goods, and the plans, estimates, and requisitions for such materials shali be submitted to the Director-General by the Engineer-in-chiet concerned through the Managing Director. Indents not dealt with in China shall be placed by the head office concerned in the hands of the Syndicate's 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 when necessary, for account of the Chinese Government, and charge the original cost plus a commission of 5 per cent., but all return commissions and rebates of every description shall be credited to the railway, and all purchases made by the Syndicate Banks on behalf of the railway shall be supported by the manufacturer's original invoices and Inspector's certificates.
Due consideration will be extended to materials from all Chinese Government manufactories, if available when required, and of a quality satisfactory to the Engineer-in-chief.
Art. 21. The head office shall during the working of the lines, and in using the funds mentioned in Article 28, maintain the railways, buildings, works, rolling-stock, and dependencies in good order and condition, and the Engineers-in-chief shall certify at the close of each financial year that this has been duly done.
Art. 22. Branch lines or extensions in connection with the railway lines men- tioned in this Agreement, that may appear profitable or necessary later on, shall be built by the Imperial Government with funds at their disposal from Chinese sources, and if foreign capital is required preference to be given to the Syndicate Banks.
Art 23 The tariff of traffic charges shall be decided by the Director-General upon the recommendation of the head offices. They will take into consideration the tariffs of other existing railways in China, while keeping in view the necessity for attracting traffic. The head offices, with the approval of the Director-General, may enter into arrangements for tariffs or through traffic over connecting lines. In case of war, foreign or internal, the railway lines shall be reserved in the first instance for the transport of Chinese troops, commissariat, and munitions of war under the order of the Director-General, and at half the ordinary tariff rates, and the railways shall not engage in any service injurious to China. In case of famine or great need grain will also be transported over the lines at half the ordinary tariff rate under orders of the Director-General. Government and Court supplies shall be dealt with by the head offices in the same way as they are treated on other lines.
prepare
Art. 24. After the railway is opened to traffic the head offices will
semi- annual estimates of receipts and expenditure, and communicate the same to the Director-General and to the representatives of the Syndicate. The annual accounts of the northern and southern sections shall, at the close of each financial year, be
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audited and signed by qualified auditors, not connected with the railway, selected by the Syndicate.
Art. 25. All receipts of whatsoever nature derived during the time of construction from working completed or incompleted sections of the railways shall be credited to railway revenue account.
Art. 26. Should any traffic business be apparent later on as likely to benefit the Imperial Government of China and increase the earning power of the railway lines, the head offices shall represent the same to the Director-General and request him to obtain the necessary authority to arrange the business.
Art. 27. The head offices shall work the lines on behalf of the Imperial Govern- ment of China until the present loan is redeemed. As soon as the loan has been completely redeemed this Agreement shall become null and void, and the railway shall thereafter be managed as the Chinese Government may think fit.
Art. 28. The annual net revenue is understood to be that resulting from the gross receipts of the passenger and goods traffic and the income from other sources after deducting all working expenses, including maintenance of the permanent way, repairs, renovation of machinery and rolling-stock, and all expenses of administration, besides deducting an amount to be determined by the Director-General in consultation with the head offices as sufficient for accumulating a reserve fund for extraordinary improve- ments or repairs.
Under the heading of repairs and renovations are not to be included such work on the permanent way, bridges, rolling-stock, machinery, and dependencies as may be caused by force majeure-for instance, by earthquake, extraordinary flood, or other exceptional manifestations of natural forces, war, or riots.
The expenditure due to such causes is to be covered either by the Imperial Government or by supplementary loans as described in Article 15.
Of the surplus of the net annual revenue of the railway lines after payment of interest and repayment of principal of the loan, first a participation of 20 per cent, of the said surplus will be granted to the Syndicate Banks in remuneration for their general responsibility and services; secondly, an amount equal to not less than that required to pay the ensuing year's instalments of interest shall be deposited with the Syndicate Banks, and shall bear interest at the market rate. remainder of the net annual revenue will be at the disposal of the Imperial Govern- ment of China.
The
Art. 29. The powers and authority given and delegated to the Director-General by the Imperial Government of China shall, in the case of his promotion or removal, be transferred to his successor, and the Deutsch-Asiatische Bank and the Chinese Central Railways (Limited) may, subject to all their obligations hereunder, transfer or delegate all or any of their rights, powers, and discretions hereunder to any German or British Company, Directors or agents, with power of further transfer and sub- delegation, such transfer, sub-transfer, delegations, or sub-delegations to be subject to the approval of the Director-General.
Art. 30 This Agreement is signed under authority of an Imperial Edict dated which has been officially communicated to the Ministers of Germany
and Great Britain in Peking by the Wai-wu Pu.
Art. 31. Five sets of this Agreement are executed in English and Chinese, one set to be retained by the Yuch'uan Pu, one by the Board of Commerce, one by the Director-General, one by the Deutsch-Asiatische Bank, and one by the Chinese Central Railways (Limited). In the event of any doubt arising regarding the interpretation of the contract the English text shall rule.
Signed, &c.
Inclosure 4 in No 1.
Minutes of the 27th Meeting held at the Office of the Haikwan Taotai on March 2, at 3 P.M.
Present:
Taotai Liang Tun Yen, representing the Board of Communications.
C. L. Chou,
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Mr. H. Cordes, representing the Deutsch-Asiatische Bank.
Mr. J. O. P. Bland, representing the Chinese Central Railways (Limited). THE Chinese text of the revised draft Agreement having been completed by Mr. Cordes and handed to the Yuch'aan Pu's representatives, the meeting proceeded