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plans and construction of the line. In his general conduct he shall pay all due respect to the Ministry, the director-general, and the managing director. His duties shall consist in the efficient, speedy, and economical construction of the aforesaid line and its maintenance during construction, and the general supervision thereof in consultation with the managing director. He shall use his utmost endeavours to complete the entire section within the period of three years laid down in the loan agreement, and with this end in view shall prepare, so soon as practicable, a complete detailed scheme. 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 director-general or the managing director, or, in their absence, their respective duly authorised representatives, will act in consultation with the engineer-in-chief, and in the case of disagreement between the managing director and the engineer-in-chief the matter will be referred to the director-general, and if it is of a grave character the director-general will first consult with the Ministry of Posts and Communications, and after their consultation the decision of the director-general will be final.

Art. 4. The engineer-in-chief shall not absent himself from duty without permis- sion from the director-general or managing director, or their duly authorised representatives, but shall devote his whole time and attention exclusively to the service of the railway. He shall not concern himself in any other business or occupation. He shall be entitled to four weeks leave of absence in each year, and to such other leave privileges as may be accorded on other Chinese Government railways. Art. 5. All matter concerning the welfare of the railway shall be treated as confidential by the engineer-in-chief, and shall not be communicated to outside parties.

Art. 6. Subject to the due and faithful observance and performance by the engineer-in-chief of all the terms of this agreement, he shall, during such time as he shall actually continue to act as such engineer-in-chief as aforesaid and perform his duties hereunder be paid by the director-general out of the general accounts of the railway, from the date of the signature of this agreement, a salary at the rate of 2,000 per annum payable monthly in China or in London as the engineer-in-chief may request. The said salary shall be payable on the last day of each month, Western calendar, and when drawn in China shall be paid at the current rate of exchange of the day.

A house and travelling allowance of 300 taels Shanghai sycee per month shall be paid to the engineer-in-chief from the date of signature of this agreement. While the engineer-in-chief is on survey duty he shall, in addition to such monthly allowance, be paid all out-of-pocket expenses incurred by reason of such survey duty over and above the sum of 100 taels, which sum of 100 taels he shall himself contribute from his monthly allowance. In regard to the medical attendance and compensation for injuries received in the execution of his duties, the engineer-in-chief shall receive similar treatment as is provided for in the regulations of other Chinese Government railways in respect to the engineer-in-chief.

In case the engineer-in-chief is obliged to resign his position on account of ill- health during the term of this agreement, he will be entitled to receive 100%. for his passage to England, and similarly at the expiry of his engagement under the terms of this agreement he shall receive the sum of 100%. for his passage to England.

Art. 7. It is agreed that this agreement may be determined by the director- general on giving the engineer-in-chief notice in writing and on paying him three months' salary in advance and his aforesaid passage money to England, in which case no other compensation may be claimed by the engineer-in-chief.

Art. 8. The engineer-in-chief may be dismissed summarily by a writing assigning the cause of dismissal, for the following reasons :---

1. Wilful disobedience of any lawful order of the director-general.

2. Gross misconduct.

3. Neglect of duty, or other conduct liable seriously to injure the interests of the Imperial Government, and particularly in respect of the section of railway he is engaged to construct.

4. Incompetence to execute the work entrusted to him.

5. Incapacitation by illness from attention to his duties for a period of three months.

In the last-mentioned case the engineer-in-chief shall receive the passage money to England provided for above.

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Art. 9. This engagement is executed in Chinese and English, and in the event of disagreement as to the meaning of its terms the Chinese version shall control.

In witness the parties above named have, the day and year first above written, set their respective seals and names at Wuchang, in the Empire of China.

A. H. COLLINSON.

Sir,

Shanghai, July 12, 1911.

Enclosure 2 in No. 1.

Mr. Collinson to Sheng Kung Pao.

Peking, June 30, 1911. WITH reference to the agreement of engagement as engineer-in-chief of the Hupei-Hunan section of the Canton Railway under the Hukuang Imperial Govern- ment railway loan, I have the honour to inform your Excellency that I accept engagement under the terms of the said agreement as drafted to-day, it being mutually agreed and understood that should either the engineer-in-chief of the Kuangshui- Tehang or of the Ichang-Kueichoufu sections of the Szechuan-Hankow Railway be allowed a higher salary than 2,000 per annum, or better terms than my own as regards consolidated allowance, that my salary and allowance shall be increased to an equality therewith.

I take this opportunity of thanking both your Excellency, the Board, and bis Excellency the director-general for the great honour you have done me in selecting me for this appointment, and to assure you that I will use my utmost endeavours to carry out the work in the terms of my agreement and in the best interests of the Government.

I have, &c.

A. H. COLLINSON.

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