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ARTICLE 1.
The Chinese Government agrees, in accordance with the 1st and 2nd Articles of the Convention regarding the Fisinmintun-Mukden and Kirin-Chang Ch'un Railways (hereinafter called the Convention), to borrow 50 per cent., equivalent to 320,000 yen, of the amount required for the construction of the section of the Peking-Mukden Railway cast of the Liao River, and 50 per cent., equivalent to 2,150,000 yen, of the amount required for the construction of the Kiriu-Ch'ang Ch'un Railway from the South Manchuria Railway Company.
ARTICLE 2.
Interest on the loan shall be at the rate of 5 per cent. per annum.
ARTICLE 3.
In accordance with the provisions of the 6th Article of the Convention, the actual price of the loan shall be 93 per cent. of the nominal amount.
ARTICLE 4.
The Chinese Government undertakes, in accordance with the 3rd Article of the Convention, that during the period of the loan the Engineer-in-chief of the section of the Peking-Mukden Railway, east of the Liao River, shall be a Japanese subject. At the commencement of the undertaking the Japanese engineer at present engaged by the Peking-Mukden Railway will be appointed to the post. The direction of affairs will, as at present, be vested in the Managing Director of the Peking-Mukden Railway and the Engineer-in-chief. Should it subsequently prove necessary to change the Engineer-in-chief the post shall be filled, in accordance with the provisions of the Convention, after consultation with the South Manchuria Railway Company, and the control of the line will remain as stated above.
ARTICLE 5.
In view of the representations made by the Chinese Government regarding the difficulty of keeping separate accounts for the section of the Peking-Mukden Railway beyond the Liao River, the Japanese Government agrees that they shall be included in the general accounts of the Peking-Mukden Railway Company, and it shall not be necessary to appoint a Japanese Accountant in addition. The Japanese Government further agrees that the Chinese Government, after calculating the amount due annually in respect of capital and interest on the loan for that section of the line, shall then fix the amount payable monthly in respect of interest and capital, and shall set off this amount against the profits of the section of the Peking-Mukden Railway cast of the Liao River. This amount shall be paid on the first day of each month by the Chinese Government into a Japanese Bauk in China selected by the South Manchuria Railway Company for the purpose of paying on the due date the amount due in respect of capital and interest. The manner in which such payments are to be made, and the amount of interest to be paid by the bank on the funds deposited, shall be arranged later, when the details of the Loan Agreement are being settled.
The Chinese Government agrees that certified copies of the monthly general statement of accounts and the annual balance-sheet of the whole Peking-Mukden Railway system shall be forwarded at the end of each month and year to the South Manchuria Railway Company.
ARTICLE 6.
In accordance with the 3rd Article of the Convention, the Engineer-in-chief and Accountant of the Kirin-Chang Chun Railway shall be Japanese subjects, the mode of appointment being as follows:-In the case of the Engineer-in-chief the Chinese Government shall select a capable man, and before appointing him shall consult with the South Manchuria Railway Company. The Accountant shall be selected by the South Manchuria Railway Company, and after consultation the appointment shall be made by the Chinese Government. Should it subsequently prove necessary to change
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the Engineer-in-chief or Accountant it will be necessary, in accordance with the Convention, to consult with the South Manchuria Railway Company, and the new (appointment shall be made in the manner stated above.
ARTICLE 7.
The detailed Agreement regarding the loans shall be arranged, in accordance with the Convention and with the present supplementary Convention, between the South Manchuria Railway Company and an officer appointed by the Chinese Board of Communications.
The present supplementary Convention must be ratified by the Japanese and Chinese Governments before becoming effective.
Signed at Peking this 12th day of November, 1908.
(Seal.) (Seal.)
(Signed) (Signed)
M. ABÉ, 1st Secretary, Japanese Legation. LIANG SHIH-YI, Director of the Railway
Bureau of the Board of Communications.