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of all matters involved, and they shall issue this loan to the public as soon as possible after they shall have notified the Board of Finance that they will make the said programme and statements the basis for the issue of bonds hereunder.
3. The price of the bonds to the Imperial Chinese 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 Imperial Chinese Government provided such application be made to the banks 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 Board of Finance.
4. In the event of the Imperial Chinese Government requiring funds immediately for the commencement of any of the undertakings contemplated for Manchuria the banks agree upon the execution of this agreement and so soon as they shall have been furnished with a statement satisfactory to themselves of the nature of such undertaking or undertakings and the amounts to be applied thereto, to hold in America and Europe at the disposal of the Imperial Chinese Government the sum of 1,000,000%, and to advance the same, or such portion thereof as may be required, against the order of the Board of Finance.
5. The banks further engage that so soon as they shall have handed to the Board of Finance the notification referred to in section 2 of this article, and prior to the issue of this loan to the public, to hold in America and Europe at the disposal of the Imperial Chinese Government a further sum of 1,000,000, which amount, or such portion thereof as may be required, may be withdrawn for preliminary expenses in connection with currency reform by orders of the Board of Finance as provided by section 5 of article 9 hereunder.
6. The above advances to the aggregate of 2,000,0001. or such portion or portions thereof as may, from time to time, have been availed of by the Imperial Chinese Government, shall bear interest at the rate of 6 per cent. per annum from the date on which such several sums may have been withdrawn by the Board of Finance from the banks, and these advances shall be repaid to the banks, with accrued interest from the first proceeds of this loan when issued, or in any case within eighteen months from the signature of this agreement unless otherwise mutually arranged between the Board of Finance and the banks.
Art. 9. The not proceeds of the loan shall be placed to the credit of accounts to be designated respectively as "The Chinese Government Currency Reform Account” and "The Chinese Government Manchurian Development Account" with the American group in New York or such bank or banks in China as from time to time shall be designated by the American group, the International Banking Corporation being now so designated; and with the Hong Kong and the Shanghai Banking Corporation, the Deutsche-Asiatische Bank, and the Banque de l'Indo-Chine, in China, London, Berlin, or Paris, as the case may be. Payments of the loan proceeds into the credit of these accounts shall be made in the proportions fixed respectively by the statement of expenditures for currency reform and the statement of Manchurian expenditures provided for in article 8, section 1, above, in instalments, and on dates conforming to the conditions allowed to the subscribers to the loan, and the sums so credited shall be held by the banks above named subject to the order of the Board of Finance.
2. Transfers of loan funds to China in amounts conforming to the Imperial Chinese Government's requirements, as specified in the statements of currency reform and Manchurian expenditures respectively, but not exceeding a maximum of 300,0002. transferred in any one week, will be made through the Shanghai branches of the several banks named in section 1 of this article by the Board of Finance; and if such transfer be made through more than one of the several banks, exchange therefor shall be settled with the transferring banks on the same day. Funds so transferred shall be held by the transferring banks in Shanghai until required to be withdrawn for the purposes specified in the statements of currency reform and Manchurian expenditures respectively.
3. The banks agree to pay interest upon the funds held by them in America and Europe at the rate of 3 per cent. per annum, and upon the funds temporarily held by them in China at the banks' rates in Shanghai for current accounts.
4. The Board of Finance shall, in accordance with the Imperial Chinese Govern- ment's requirements, as specified in the statements of currency reform and Manchurian expenditures respectively, make transfers from the loan funds held by the banks in China to the credit of a currency reform account and [or] a Manchurian development account, with the Shanghai and [or] Peking branches of such Chinese bank or banks
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as the Board of Finance may from time to time designate to be its agent or agents for financing the operations contemplated under this agreement.
5. Orders on the banks for such transfers of loan funds held by the banks in China to the Shanghai and [or] Peking branches of the designated Chinese bank or banks shall be signed by the Board of Finance, and shall be handed to the banks in Shanghai or Peking three days before the transfers are to be made. Such orders shall be of a form to be stipulated in the statement of expenditures for currency reform and [or] the statement of Manchurian expenditures referred to in article 8, section 1, above, and shall specify to what item or items of such expenditures the transferred funds are to be applied. Such orders being found correct, the banks shall not be entitled to delay the transfer desired, and the sum requisitioned shall be immediately transferred to the credit of the currency reform account and [or] the Manchurian development account with the designated Chinese bank or banks.
6. In case the Board of Finance should desire to withdraw or transfer funds held by the banks in America or Europe to make gold payments abroad for expenditures contemplated under the statement of expenditures for currency reform and [or] the statement of Manchurian expenditures, orders of the form specified in section 5 above shall be handed to the bank or banks concerned in Shanghai or Peking five days before such payments or transfers are to be made; aud, the orders being found correct, the bank or banks concerned shall, at the expense of the Board of Finance, by telegraph, advise the bank or banks concerned in America or Europe, as the case may be, to make the payments or transfers thus requisitioned.
7. Transfers of loan funds from the banks in America and Europe to China, and transfers from the banks in China to the designated Chinese bank or banks, shall be made as nearly as possible in equal amounts. In the event of equal transfers being found to be impracticable, however, a mutually satisfactory procedure for making the transfers above referred to shall be arranged by the Board of Finance with the banks.
Art. 10. The Imperial Chinese Government may, at its discretion, instruct the banks to make on its behalf payments in gold abroad from the proceeds of this loan held by them in America and Europe up to an amount not exceeding 2,500,000, to meet its obligations due under the terms of the protocol of the 7th September, 1901. These disbursements in gold abroad shall be made upon the payment in Shanghai to the credit of the Chinese Government currency reform account and [or] the Chinese Government Manchurian development account with the bank or banks concerned of funds in Shanghai sycee, equivalent, at the average indemnity rate of exchange of the preceding month, to the amounts in gold so released. Funds so credited shall be held by the bank or banks concerned in Shanghai until withdrawn for the purposes specified in the statements of currency reform and Manchurian expenditures respec- tively, as provided in sections 4 and 5 of article 9 above.
Art. 11. Desiring to assure the banks, in the interests of the bondholders, that the loan funds are being expended for the purposes contemplated under this agreement, the Board of Finance engages, until such time as the proceeds of the loan shall have been expended in accordance with the statements of currency reform and Manchurian expenditures, to hand to the banks, not later than thirty days after the expiration of each quarterly period (Chinese calendar)-
(a.) A quarterly report in Chinese and English, showing the disbursements incident to the inauguration and operation of the Imperial Chinese Government's programme of currency reform.
(6.) A quarterly report in Chinese and English, showing the disbursements for the promotion and extension of Manchurian industry.
Such quarterly reports shall be of a form to be specified in the statements of currency reform and Manchurian expenditures.
In addition to such quarterly reports, the Board of Finance will also hand to the banks a copy of the annual report which is to be published for the information of the Imperial National Assembly or the Imperial Chinese Parliament.
Art. 12. The rate of interest for the loan shall be 5 per cent. per annum on the nominal principal, and shall be paid to the bondholders half-yearly, as calculated from the date on which the loan is issued to the public, and according to the amounts specified in the schedule attached to this agreement.
2. The term of this loan and of the bonds evidencing the same shall be forty-five years. Repayment of principal shall commence with the eleventh year after the date
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