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Exchange Committee, but that they would be prepared to recommend it provided that the consent of the Paris market was first obtained. The Banque de l'Indo- Chine states that, if the internationalization of future loans were to be obtained in Paris, the expenses concerning stamp duty and publicity ought to be shared in common by the three parties.
Clause 6.-The question of appointing a representative of one of the parties to conduct the negotiations with the Chinese Government was considered, and it was agreed that it should stand over for further consideration.
Clause 10 (a.)-The question of the appointment of an Engineer-in-chief was considered at length, and it was not contested that in regard to this point the Engineer-in-chief to the Hankow-Canton Railway must be British, as provided in clause 7 (a) of the Addis Memorandum. Accordingly it was proposed by the Corporation and the French group that, subject to the exclusion of the Hankow- Canton Railway and the Pookow-Sinyang Railway, all railway business in China should be shared in as nearly as possible equal terms by the three groups.
The matter was held over in order to allow the German group time to refer it to their Consortium in Berlin.
The Banque de l'Indo-Chine, as a condition of their approval of the present scheme, raised the question of being permitted to participate in the Agreement between the Hong Kong and Shanghae Banking Corporation and the Deutsch- Asiatische Bank of 1895 and 1905, and Mr. Addis and Herr Rehders undertook to refer this matter to the consideration of their respective Directors.
The meeting was then adjourned until to-morrow morning.
Minutes of Adjourned Meeting held at 3, Lombard Street, London, on March 13, 1909.
All the above gentlemen were present.
Mr. W. Keswick in the Chair.
The draft Minutes of the meeting held on the 12th March, 1909, were read, considered, and approved in the terms above set forth and ordered to be printed for distribution and to be signed by the Chairman as correct.
Signed as correct:
(Signed)
W. KESWICK, Chairman.
Memorandum of Agreement made the
day of
1909, between the British and Chinese Corporation (Limited), having its registered office at 3, Lombard Street, in the City of London (hereinafter called "the Corporation"), of the first part; Chinese Central Railways (Limited), having its registered office at 110, Cannon Street, in the said City (hereinafter called "the Central Company"), of the second part; the Banque de l'Indo-Chine, having its head office at 15 bis Rue Laffitte, Paris (hereinafter called "the French Bank "), of the third part; and the Deutsch-Asiatische Bank, having its head office at 14 to 16, Behrenstrasse, Berlin (hereinafter called "the German Bank") of the fourth part.
WHEREAS by an exchange of notes the Governments of England and France have declared themselves opposed to the subjects of either country making loans to the Empire of China for railway purposes unless accompanied by suitable guarantees that the moneys will be devoted to the object for which the loan was ostensibly raised;
And whereas the German Syndicate for Chinese business, hereinafter referred to, having been in negotiations with the Government of the Chinese Empire in com- petition with the Corporation and the French Syndicate in connection with Chinese business to which this Agreement relates, and being satisfied that the principle adopted by the Governments of England and France should be adopted on their behalf, also as affording the most beneficial and economical manner of providing sufficient security for the service of loans made by them have accordingly expressed
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their willingness to enter into a general Anglo-Franco-German understanding for the purpose of governing the action of the Corporation, and the French and German Syndicates in connection with the negotiations for and making to the Chinese Empire loans for railway purposes:
Now it is hereby agreed by and between the parties hereto as follows:-----
1. In the matter of this Agreement the French bank is acting on behalf of the French Syndicate for Chinese business, consisting of the parties whose names are set forth in the first Schedule bereto, and the German bank is acting on behalf of the German Syndicate for Chinese business, consisting of the parties whose names are set forth in the second Schedule hereto.
2. This Agreement relates to all loans and advances for railway purposes to he floated out of the Chinese Empire which may be made with the Chinese Imperial Government, but does not relate to loans to be floated within the Chinese Empire.
3. Any business of the kind herein before defined to which this Agreement relates which may be offered to either of the Contracting Parties of the first, third, and fourth parts (hereinafter jointly referred as "the lenders ") must be dealt with jointly by them in accordance with the stipulations of this Agreement, and any loans or advances to Government Departments and Companies for railway purposes and having Chinese Imperial or Provincial Government guarantees are to be treated in
the same manner.
4. As regards joint action in respect of financial operations for railway purposes not having such guarantees special Agreements will have to be made in each separate case.
5. This Agreement is made on the principle of equality, namely, equal terms in every respect between the lenders, and each of the lenders enters into this Agreement for their respective groups, and shall take an equal share in all operations and jointly sign all contracts, except as hereinafter provided, and shall bear in equal shares all charges in connection with any business (except charges of and connected with the realization by each of the lenders in their respective markets of their participation in the operations), and conclude all contracts with equal rights and obligations as between themselves. Provided always that in cases where the introduction of third parties is calculated to prejudice the success of the negotiations any business falling within the scope of this Agreement may be entertained, and negotiations entered upon by either of the lenders alone with or without notice to the other lenders, and should it appear in the course of such negotiations that the conditions imposed upon the business preclude joint negotiations (and or) joint signatures by the lenders in terms of this Agreement, the negotiating party may conclude and sign the Agreement and negotiations alone, but upon the terms of the other lenders being entitled to all rights or participation under this Agreement, other than those involving or arising from joint negotiation and joint signature, but it is understood that all the lenders will use their best endeavours to obtain the joint signatures to any contract wherever possible, except where for any reasons this is found to be impracticable when the party signing the contract shall by the insertion of a special clause or execution of a separate declaration of trust, or otherwise insure to the other lenders the same rights as regards the taking over the issue and service of the loan which it has obtained under the contract for itself, and also the authority required for obtaining official quotations in the respective markets of the said other parties.
6. All contracts shall so far as possible be made so as not to impose joint liability on the lenders, but each of the parties to the said contracts shall severally liquidate its own engagements and liabilities towards the party of the other side in China. The parties to the said contracts will so far as possible come to an under. standing with regard to the realization of the operations, but so that such realization in whatever manner this may take place shall be for the separate benefit of each of the lenders as regards their respective participations therein. It is also understood that subject to other arrangements a representative of the Corporation shall conduct the negotiations with the Chinese Imperial or Provincial authorities entered into in the joint interest of the parties hereto of the first, third, and fourth parts.
7. In the event of either of the lenders declining a participation in any business proposed either at the outset or at any time during the course of the negotiations, the other lenders shall have the option of taking up and carrying out the business either jointly or if only one takes up the business separately on their or its respective accounts without becoming subject to the provisions of this Agreement.
[2193 q-1]
B 2
54