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shall also relate to the Company's Section and Loan.
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(m) The two sections shall be worked as one whole and be under
the same supervision.
(n) After the purchase of the Company's Section, the two loans
and two securitics shall be merged into one.
It should be explained that the important part of the
agreement is that relating to the cquisition of the presently
constructed section of the line and we are insisting that the
acquirement áf this section is the first step to be taken.
The constructed section of the line is owned by a
private Chinese Company having a capital of $30,000,000 the Com-
pany also holding a 3/7th share in the Canton-Samshui Line.
The value of the Company's section including rolling
stock and equipment has been estimated at $21,000,000 exclusive
of the interest in the Sanshui Line. The shares of the Company,
however, stand at a considerable discount and it is estimated
that with the exercise of care, tact, and privacy the Line should
be purchased from the present shareholders for a sum of about
$12,000,000.-
The Paking Government are said to hold $400,000,-
worth of stock at par value in the Company.
The Company's line runs through highly developed coun-
try, and, properly managed, should be exceedingly remunerative.
It is, however, grossly mismanaged and is in need of thorough over-
hauling and re-equipment. It is intended to do this out of the
$20,000,000.3 loan.
After the acquisition of the Company's Section it is
to be incorporated with the Constructional Section and the whole
line run under one administration, the Separate Loan and Separate
Securities being then merged to form one.
Mr. Tson has insisted that for domestic-polatical reasons
the/
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