108
4
to the service of the loan, shall be and hereby are made a first charge on the following
revenues:—~
2. The duties on tobacco and spirits in Manchuria amounting to 1,000,000 taels per annum.
The produce duty in Manchuria amounting to 700,000 taels per annum.
The consumption duty in Manchuria amounting to 800,000 taels per annum. The newly added surtax upon salt of all the provinces amounting in all to 2,500,000 taels per annum.
The whole of the foregoing revenues amount to 5,500,000 Kuping taels.
3. The above provincial revenues are hereby declared to be free from all other loans, liens, charges, or mortgages.
4. Should the above-mentioned revenues be insufficient to meet the payment of interest and repayment of principal on due dates, the Government will, first from Manchurian and then if necessary, from other sources, supply the balance required to meet such payments.
5. So long as the principal and interest of the bonds are regularly paid from the above revenues or such others as the Government may designate there shall be no interference with these revenues herein named; but if interest and sinking fund charges, or other expenses incident to the service of the loan be in default at due date or at the maturity of the same, then, after a reasonable period of grace, the revenues above named, or such part thereof as may be sufficient to provide and pay the amounts stated, shall forthwith be transferred to, and shall be administered by, the Imperial Maritime Customs for the account and in the interest of the bondholders.
6. As long as the bonds shall remain unredeemed they shall have priority, both as regards principal and interest, by way of a lien or charge upon such revenues over No loan, all future loans, charges, or mortgages charged on the aforesaid revenues. lien, claim, charge, or mortgage shall be raised or created which shall take precedence of or be on an equality with this loan, or shall in any manner lessen or impair its security based on the aforesaid revenues; and any further loan, charge, or mortgage, charged on the aforesaid 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.
7. In the event of the Government, during the currency of this loan, entering upon definite arrangements for the revision of the customs tariff, accompanied by stipulations for the decrease or abolition of li-kin, it is hereby agreed on the one hand that such revision shall not be barred by the fact that this loan is secured by the above-named revenues, and on the other hand that the revenues required to provide the security of this loan shall neither be abolished nor decreased, except by previous arrangement with the banks, and then only in so far as an equivalent satisfactory to the banks is substituted therefor in the way of a first lien or charge upon other revenues consequent upon such revision.
Art. 6-1. The total issue of the bonds shall at no time exceed the aggregate principal sum of 10,000,000. The banks are authorised to issue to the subscribers to the loan, bonds to the total aggregate amount of the loan payable in gold, for such amounts as may appear advisable to the banks. The form and language of the bonds shall be settled by the banks in consultation with the Government or the Chinese Minister in Washington, London, Paris, or Berlin.
2. The bonds shall be engraved and shall bear the facsimile of the signature of the President of the Chinese Imperial Board of Revenue, and his seal of office, in order to dispense with the necessity of his signing them all in person; and the Chinese Minister in Washington, London, Paris, or Berlin, as the case may be, shall, previous to the issue of the bonds, put his seal upon each bond, with a facsimile of his signature as a proof that the issue and sale of the bonds are duly authorised by and binding upon the Imperial Chinese Government.
3. The representatives of the banks in New York, London, Berlin, and Paris, as the case may be, shall countersign the bonds as agents for the issue of the loan.
4. If any modification in the form of the bond shall be required, such alterations may be made by the banks in consultation with the Chinese Minister in Washington, London Berlin, or Paris, as the case may be, but there shall be no change affecting the amount of the loan, the rate of interest, the period of the loan, or the liability of the Government.
Art. 7.--1. All details necessary for the prospectus of the loan and connected with the payment of interest and repayment of principal of the loan, and the with-
Ď
drawing of bonds for the redemption, not herein explicitly provided for, shall be left to the arrangement of the banks in consultation with the Chinese Ministers in Washington, London, Berlin, and Paris.
2. The banks are hereby authorised to issue the prospectus of the loan as soon as possible after the fulfilment of the conditions in article 8 hereunder made precedent to the issue of the loan, and the Government will instruct the Chinese Ministers in Washington, London, Berlin, and Paris to co-operate with the banks in any matters requiring conjoint action, and to sign the prospectus of the loan.
Art. 8.-1. During the preparation of the programme for currency reform the Government shall prepare a statement showing the enterprises in Manchuria together with the amounts to be devoted thereto, for which the Government proposes to expend the portion of the loan proceeds to be utilised for Manchurian undertakings as provided in article 3, subhead 2, above.
2. The banks agree to issue the loan as soon as possible, and not later than months, after the programme for currency reform and the statement of proposed expenditures above referred to shall have been discussed with and agreed upon by the banks as a basis for the bond issue.
3. The price of the bonds to the Government shall be 95 per cent, of their nominal value. Subscriptions will be invited by the banks in China, the United States and Europe, on equal conditions, preference being given to the application of the Chinese Government, provided such application be made not less than four days before the issue of the prospectus to the public. Seven days' notice of the issue of the prospectus will be given by the banks to the Government.
Art. 9.-1. The proceeds of the loan shall be placed to the credit of an account with to be designated as the "Chinese Government Currency Reform Loan Account " the American group; the Hong Kong and Shanghai Banking Corporation, the Deutsch-Asiatische Bank, and the Banque de l'Indo-Chine, in China, New York, London, Berlin, or Paris, as the case may be. Payments of the loan proceeds into the credit of this account shall be made in instalments and on dates conforming to the conditions allowed to the subscribers of the loan, and the sums so credited shall be held by the banks, subject to the order of the Government or the high official in charge of the loan funds.
2. The Government engages, however, that it will not, except by special agree- ment with the banks, withdraw from the accounts above-mentioned :-
(a.) Amounts in access of
of the issue of the loan to the public.
(b.) Amounts in excess of
of the issue of the loan to the public.
within the first three months from the date
within the first nine months from the date
(c.) And that the balance shall not be withdrawn until fifteen months from the date of such issue of the loan to the public.
3. Transfers of loan funds to China in amounts conforming to the Government's actual requirements, from time to time, for the operations contemplated hereunder, will be made through the banks by the Government or the high official in charge of the loan funds; the aggregate sum to be transferred being drawn in equal amounts from the several banks with which the loan funds are deposited in the United States of America or Europe. The funds so transferred shall remain on deposit in equal amounts with the banks in China until required for the operations contemplated hereunder.
4. The Government or the high official in charge of the loan funds shall, at such time as may be actually necessary to meet the requirements of the purposes for which the loan is made, make transfers from the loan funds deposited with the banks in China to the credit of the "Currency Reform Loan Account" with the Bank, which is hereby designated by the Government as its fiscal agent in financing the operations contemplated under this agreement.
6. Orders on the banks for such transfer of loan funds held by the banks in China to the
Bank shall be signed by the high official in charge of the loan funds or, in his absence, by his duly authorised representative. Two days previous to the presentation of such orders the high official in charge of the loan funds, or in his absence, his duly authorised representative, shall hand to the banks a certificate, the form of which shall be stipulated in the plan for currency reform and (or) the statement of proposed expenditure provided for in article 8, paragraph 1, above, stating fully the object for which the funds are required, and the aggregate sum desired shall be transferred in equal amounts from the several banks to the credit of the
[1918 dd -1]
Vay