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therefor. The Loan shall be in one issue, and the price agreed upon is 94% of the nominal value, subject to the other provisions of this Article us hereinafter stated, at the rate of 5% per annum on their nominal value, payable half-yearly, on the first day of June The interest on the Bonds shall be and the first day of December, and shall be calculated from the date of their sale to the public.
The Loan shall be issued to the public as soon as possible after signing this Agreement, but, if at the date of signature thereof, owing to an unfavourable state of the market rendering the issue of the Loan and the payment of its proceeds to the Viceroy of Canton impossible on the terms above named, then in such case the Corporation shall thereafter, at such time as the Chinese Government may decide within a period not exceeding eight (8) months, issue the Loan and thereof to the Viceroy, deducting and retaining six (6) points from the rate at which the Loan is pay the proceeds actually issued to the public, whatever that rate may be, (ie., if the issue price be 101 the Viceroy will receive 95 and so on).
Subject to the provisions of Article 16, the duration of the Loan is fixed at thirty (30) years commencing from the date of the signature of this Agreement, but no interest shall be paid on any Bonds which may be redeemed or cancelled under the terms hereinafter inentioned after the redemption or cancellation thereof.
On the face of each of these Bonds shall be expressed the value thereof in the sum of £100, or in such different amounts as the Chinese Minister in London in consultation with the Corporation may sanction.
It is understood that the Chinese Government may hereafter, in its discretion, appoint a Director iGeneral of the Railway upon whom, in such case, will devolve all the powers, functions and responsibility, herein attributed to the Viceroy of Canton (hereinafter called the Viceroy).
Article 2.
The proceeds of the Loan are to be used in the construction and equipment of the Railway, and
n paying interest on the Loan during the course of construction.
The Railway, being the first mortgage security for the Loan, shall be built and equipped under the direction of the Viceroy, in accordance with the provisions of Article 6 hereinafter, and shall be built as economically as possible in accordance with the best modern system.
It is understood that the Viceroy will secure all the necessary land for the Railway, and will give the necessary instructions to expedite and facilitate the work of constraction. built in the first instance as a single line, but provision will be made, with the approval of the Viceroy, The Railway will be and wherever necessary to meet traffic requirements, for the eventual construction of a double line.
If, during the time of construction, the proceeds of the Loan, together with the accrued interest thereon, payable by the Corporation, should, after the deduction of the sums necessary for the pay. ments of interest on the Loan, be insufficient to complete the construction of the Railway, the amount of the deficiency shall either be provided from the Chinese Government's own resources or by a Supplementary Loan to be hereafter issued by the Corporation, the interest and other conditions of which Supplementary Loan shall be arranged when the time arrives, having due regard to the conditions of the mouey market.
When the Railway is complete, if there is a surplus from the sale of Bonds, the said surplus shall be at the disposal of the Chinese Government either to redeem the Bonds in accordance with the terms of this Agreement as hereinafter stated, or to be placed on deposit with the Hongkong and Shanghai Banking Corporation for the purpose of paying interest on the Loan, or for other purposes beneficial to the Railway, in regard to which the Viceroy will communicate in due course with the Corporation.
In all matters relating to the construction of the Railway it is expressly agreed that particular heed shall be paid to the opinions and habits of the Chinese people, and that, when practicable, Chinese shall be employed in positions of trust and responsibility in connection with the Railway.
In regard to earthwork, or such other work as Chinese are competent to perform, contracts shall be entered into for such work with Chinese, under the sanction of the Head Office, and the work itself shall be carried out in accordance with plans and specifications of the Engineer-in-Chief and under his supervision.