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These two engineers-in-chief shall in every respect be under the orders of the managing director or his representative, and will carry out all the wishes of the railway In their general administration with regard to the plan and construction of the lines. conduct they shall pay due respect to the director-general and the managing director or his representative. The terms of their respective agreements will be arranged by the director-general.
Whenever appointments are to be made or functions defined of the technical members of the railway staff, as well as in the case of their dismissal, the managing In the case of director or his representative shall have full powers of control. members of the staff connected with the work of construction, the managing director or his representative shall, however, act in consultation with the engineer-in-chief concerned, and in the case of disagreement they may report to the Board of Communications or to the director-general, whose decision shall be final.
After completion of construction and during the currency of this loan, the Imperial Chinese Government will continue to employ an European or an American as engineer-in-chief of the said railway lines, such appointment to be made without reference to the banks.
Article 18.-For the Canton-Hankow Railway within the boundaries of the two provinces of Hupei and Hunan, and the Szechuan-Hankow Railway within the boundaries of the province of Hupei, during the period of construction) a company nominated by the Hong Kong and Shanghai Banking Corporation and approved by the director-general, and (b) the Deutsch-Asiatishe Bank, will act as agents of the railways for the purchase of all materials, plant, and goods to be imported from abroad. From this category rails are to be excepted, together with their appurtenances, (question: what are these ?), for the purchase of which the Board of Communications will memorialise the Throne recommending that they should be manufactured and supplied by the Hanyang Ironworks. All questions in respect of their price will be settled by the Board of Communications or the director-general with the ironworks after com- parison of the price and time required for delivery, with the purchases of rails by other lines from Europe or America. No delay will be allowed.
For all important purchase of such materials tenders shall be called for by the managing director: in case of all tenders, indents, and orders for the importation of goods and materials from abroad, the said agents shall purchase the materials required on the terms most advantageous to the railways and shall charge in addition a com mission of 5 per cent. on the actual price of the goods when originally bought. But the aforesaid agents, in respect of all materials purchased abroad, shall be bound to invite the services of an engineering expert to inspect such materials and take delivery thereof.
This inspecting and receiving agent shall be engaged by the Chinese Government on their sole authority [sic], but his charges for inspection and taking delivery of the goods shall be deducted from the commission of per cent. payable to the purchasing agents,
It is understood that no orders for materials shall be executed or any expenditure incurred without due authorisation by the managing director or his representative.
In return for payment. (p. 9) to" in accordance with the original order
as in orginal.
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encouraged. No commission will be paid on purchases of such Chinese materials and goods.
It is understood and agreed that after the construction of the lines is completed the aforesaid company nominated by the Hong Kong and Shanghai Banking Corporation and the Deutsch-Asiatische Bank, may continue to tender for the supply of foreign materials which the railway administration may require, exclusive of Chinese manufacturers, but if prices and qualities of the goods of other countries are more favourable, the aforesaid agents shall have no ground for complaint. If the prices and qualities of the goods of other countries are similar, then of course preference will still be given to the purchase of British, German, French, and American goods, but no commission shall be payable in either case.
Article 19.-Branch lines: no change.
Article 20.--Same as original: last line but one, read, "the rate of interest on the deposit being arranged with the banks on the most favourable terms compatible with the conditions of the market."
Article 21.-No alteration.
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Article 22.-Add after Banque de l'Indo-Chine: "and the American Banks." Rest as original.
Article 23.-Similar amendment: also, after "French add "American." Rest as original.
Article 24--Add "American Minister." Rest as original. Article 25.-Eight sets, of which Chinese Government retains four. Rest as original.
February 25, 1911.
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Continue: Whenever materials are to be shipped to China, the aforesaid agents shall be bound to make a selection of several trustworthy steamship companies at the port of shipment, and of several insurance companies, and after comparing their rates of freight and insurance to choose from them all the most favourable before proceeding to shipment and insurance. And they shall further, prior to actual shipment, send by mail to the railway administration in original the quotations of the steam-ship and insurance companies, together with a statement of comparison drawn up by themselves, for investigation by the railway administration,
At equal rates and qualities goods of British, German, French or American manufacture as in original, down to words "except as above provided"; continue: but it is understood that if consulting engineers are engaged with the approval of the Board of Communications, or the director-general, or the managing director or his representative, the railway administration will pay their charges itself out of railway funds. Chinese materials, and goods which have been manufactured by Chinese factories, shall be given a preferance if their prices and qualities are found by the inspecting and receiving agent to be appointed by China, in consultation with the engineer-in-chief, to be equal to those of British, German, French or American, or other foreign materials, in order that Chinese industries may be
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