688
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par value of each extra bond so redeemed, that is to say, by the payment of 1087. 10s. for each 100/. bond, and shall have the right to redeem the whole loan or increase the regular redemption by extra drawings after the twenty-third year at par. Any such extra drawings must take place in Europe on the date of an ordinary drawing provided for in the prospectus of the loan.
3. The loan shall bear interest during the first fifteen years at the rate of 5 per cent. per annum, and thereafter, from the sixteenth year, at the rate of 41/2 per cent. per annum on the nominal principal from time to time outstanding, and the interest shall be paid to the bondholders half-yearly. The interest shall commence from the date on which the loan is issued to the public, and will cease upon complete redemption of the loan.
4. The service of principal and interest of this loan due to the bondholder shall be paid in equal shares to the contracting banks in Shanghae by the Board, who will hand to those banks, ten days before the due date of every yearly payment of principal and half-yearly payment of interest as calculated from the date of issue of the loan, funds in Shanghae sycee sufficient to meet each such payment in gold in Europe, the exchange for which will be settled by the contracting banks, on the same day, on a fair basis after arrangement with the Board; but the Board will have the option of settling exchange in equal shares with the two contracting banks, at any date or dates within six months previous to the due date of any payment. These payments may be made in gold in Europe, should the Imperial Chinese Government have funds in Europe at its disposal, not remitted for the purpose, and desire to employ them.
In reimbursement of expenses connected with the payment of interest, and the repayment of principal of the loan to the bondholders, the Board will pay to the contracting banks, with each payment of the loan service, a commission of two per mille on such payment, that is to say, a commission of 2l., on every 1,000l.
5. The service of principal and interest of this loan, will be paid from the surplus revenues of the various productive works of public utility controlled by the Board of Posts and Communications; in the event of these surplus revenues being insufficient, other revenues will be selected to make up the deficiency.
The Board will further, from and after the date of the first coupon and during the currency of this loan, leave on fixed deposit, in equal shares, with the two contracting banks in Shanghae the estimated silver equivalent of the payment of interest next due. In like manner, from and after the end of the tenth year, the Board will also leave on fixed deposit with the contracting banks in Shanghae the estimated silver equivalent of the instalment of principal next due. These fixed deposits will be renewed and adjusted half-yearly on the dates on which interest coupons become due to the bond-holders, the silver equivalents of interest and (or) principal which they represent being calculated at the rate of exchange, or average rates of exchange, settled for the remittance of loan service made ten days previously. Interests on these deposits shall be allowed by the contracting banks at their advertised rates for the time being for twelve months fixed deposits, subject to any change of rate from the date of such change, and will be payable half-yearly.
6. The contracting banks shall issue, and are hereby authorized to issue, to subscribers to the loan bonds for the total amount of the loan in gold, in such languages and for such amounts as shall appear advisable to the contracting banks. The form of the bonds shall be decided in consultation with the Chinese Ministers in London and Paris, who shall seal the bonds with their official seals, as evidence that the Imperial Chinese Government is bound thereby.
Cancelled bonds will be handed by the contracting banks to the Chinese Minister in London or Paris.
In the event of bonds issued for this loan being lost, stolen, or destroyed, the contracting banks shall immediately notify the Chinese Minister in London or Paris thereof, who shall authorize the contracting banks to insert an advertisement in the public newspapers notifying that payment of the same has been stopped, and to take such other steps as required by the laws of the country. Should such bonds not be recovered after the lapse of time provided by the law, the banks will require from the claimants the requisite guarantee, together with proof of loss, in the usual form, for examination by the Chinese Minister in London or Paris, as the case may be, who will then, without further authority from the Chinese Government, seal and execute duplicate bonds for a like amount, and hand them to the contracting banks, by whom all expenses in connection therewith shall be defrayed.
Coupons and drawn bonds, not presented for payment within thirty years after the date of their maturity, shall be forfeited to the Imperial Chinese Government.
7. The Imperial Chinese Government hereby unconditionally guarantees, and declares itself responsible for, the due payment of the principal and interest of this loan, which is further hereby secured by a first charge, free from all encumbrances, upon
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Province of Kiangsu-
New additional tax on salt, amounting per annum to Taels. 400,000 House tax, amounting per annum to 600,000Province of Hupei-
Old and new additional tax on salt, amounting per annum to Taels. 700,000Province of Chekiang—
House-tax, wine excise, pawnshop licences, title-deeds tax, amounting per annum to Taels. 300,000 Old and new additional tax on Szechuan and Huai salt, amounting per annum to.. 600,000 Tax on tobacco, wine, and sugar, house and land title-deeds tax, amounting per annum to 400,000Province of Chibli-
Tobacco, wine, and miscellaneous duties, amounting per annum to Taels. 800,000 Salt Commissioner's Treasury, revenue from additional salt tax, amounting per annum to 200,000 New additional tax on salt, amounting per annumu to 250,000 Total Kuping taels 4,250,000It is understood that the security of this loan over the above annual revenues is limited to 4,250,000 Kuping taels, irrespective of collection; if more is collected, it will be included in the security.
In the event of default of payment of any instalment of principal and (or) interest of this loan at due date, the Imperial Chinese Government will instruct the provincial authorities in control of the said provincial revenues to hand them over to the contracting banks.
So long as this loan or any part thereof shall be unredeemed, it shall have priority, both as regards principal and interest, over all future loans, charges, and mortgages charged on the said security of the provincial revenues herein assigned. No loan, charge, or mortgage shall be raised or created which shall take precedence of or be on an equality with this loan, or which shall in any manner lessen or impair its security over the said provincial revenues as stipulated above, and any future loan, charge, or mortgage charged on the said provincial revenues shall be made subject to this loan, and it shall be so expressed in every Agreement for every such future loan, charge, or mortgage.
8. All bonds and coupons, and payments made and received in connection with the service of this loan, shall be exempt from Chinese taxes and imposts.
9. All details necessary for the prospectus, and connected with the service to the bondholders of the interest and repayments of the principal of this loan not herein explicitly provided for, shall be left to the arrangement of the contracting banks, who shall issue, and are hereby authorized to issue, a prospectus of the loan. The Imperial Chinese Government will instruct the Chinese Ministers in London and Paris to co-operate with the contracting banks in any matters requiring conjoint action, and the Chinese Ministers in London and Paris will approve and sign the prospectus of the loan.
10. The contracting banks hereby take this entire loan of 5,000,000l., firm at the price of 94 per cent, to the Chinese Government. Of the resulting net proceeds of this loan, namely, 4,700,000l., the sum of 3,760,000l. will be held to the order of the Board in Europe on the 10th day of December, 1908, and the balance, namely, 940,000l., will be held to the order of the Board in Europe on the 5th day of February, 1909.
Transfers of the loan funds to China will be made by the contracting banks at rates of exchange which will be settled on a fair basis after arrangement with the Board. The Board will give to the contracting banks ten days' previous notice of the transfer to China of any sum exceeding 20,000l.
If any of the loan funds are left on deposit with the contracting banks in London or Paris, interest will be allowed at rates to be settled by mutual arrangement between the contracting banks and the Board.
11. All expenses in connection with the flotation and issue of this loan, such as underwriting, commission and brokerage, telegraph charges, advertising, postage,