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نا
China Committee will be invested as an endowment fund, the proceeds of which will be used inter alia for inviting eminent Chinese to give lectures in the United Kingdom.”
In reply, I have the honour to state that the Chinese Government is in agreement with the above proposal.
Sir,
I avail, &c.
(5.)
CHENGTING T. WANG.
Sir M. Lampson to Dr. Wang.
Nanking, September 22, 1930. I HAVE the honour to acknowledge the receipt of your Excel- lency's note, which reads as follows:-
I have the honour to refer you to the declaration made by His Majesty's Government in the United Kingdom of Great Britain and Northern Ireland in December 1922, that the balance of the British share of the Indemnity of 1901 would be thence- forward devoted to purposes mutually beneficial to China and the United Kingdom, and to express the hope that Ilis Majesty's Government will at once take steps to remit all payments of the Indemnity as from the 1st December. 1922, to the control of the Chinese Government.
"In the event of such remission being effected it is the inten- tion of the Chinese Government to deal with the funds in harmony with the general views set forth in the report of the Anglo-Chinese Advisory Committee published in 1926, to which the attention of the Board of Trustees in China referred to below will be invited. The Chinese Government proposes, however, in the first instance to apply the bulk of the funds to the creation of an endowment to be subsequently devoted to the educational purposes mentioned in the Report of the Committee. It appears to the Chinese Government that the most advantageous plan for providing such an endowment would consist in the investment of the greater part of the said Indemnity funds, namely, the accumulated funds now on deposit and all future instalments, in rehabilitating and building railways and in other productive enterprises in China. For the control, apportionment and administration of the above-mentioned endowment the Chinese Government will duly appoint a Board of Trustees in China, which will include a certain number of British members.
In view of the urgent necessity, in connection with recon- struction and development in China, of reconditioning the existing Chinese railways in the first instance, the Chinese Government will take the necessary steps to apply a part of the accumulated funds now on deposit and the instalments due for payment shortly in the rehabilitation of the said railways, especially those lines in which British financial interest has been particularly concerned, to which lines attention will be first given.
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'In rehabilitating and building railways and in undertaking other productive works from the Indemnity funds remitted or from loans secured on the said funds, the terms of existing contracts will be taken into consideration, but all orders for materials required and purchased abroad out of those funds themselves, including bridges, locomotives, rolling-stock, rails and other equipment, will be placed in the United Kingdom of Great Britain and Northern Ireland.
"In order to carry out these proposals at the earliest date and in the manner most satisfactory to the two countries, the Chinese Government is prepared to agree that the whole of the accumulated funds now on deposit be transferred to a Purchasing Commission in London, to consist of a chairman, who shall be China's diplomatic representative in London, a representative of the Chinese Ministry of Railways, and four other members appointed from time to time by the Chinese Government after consultation with the Board of Trustees from a panel of persons commended to those Trustees by His Majesty's Principal Secretary of State for Foreign Affairs as being persons of standing with wide experience in business matters, for the purpose of purchasing bridges, locomotives, rolling-stock, rails and other materials from United Kingdom manufacturers for the use of the Chinese Government railways and other productive undertakings in China. It is understood that the Commission will be exempt from all taxation in respect of any income accruing to it, whether by reason of the payment to it of any of the moneys specified in this note or from the deposit or investment of any part of such moneys as is not required for its immediate use, and its functions shall be as follows:-
"F
(1) To enter into and to supervise and secure the carrying out of contracts for the supply and delivery in China of such plant, machinery and other articles and material to be manufac- tured in each case within the United Kingdom as may from time to time be required and ordered by the Chinese Government; and (2) To apply all moneys received by the Commission in accordance with the terms of this note in discharging the obliga- tions incurred under or in connexion with any such contracts and in defraying generally the expenses of the Commission, and so far as those moneys are not immediately required for such purposes in establishing a reserve fund to enable the Commission to meet similar requirements of the Chinese Government and its own expenses in future years. All future instalments as they fall due will be paid by the Chinese Government to His Majesty's repre- sentative in China, who will transfer one-half to the Purchasing Commission in London, to be used in the same way and for similar objects as specified above, and one-half to the account of the Board of Trustees in China.
Funds spent in the United Kingdom will be regarded as loans, bearing interest and providing for eventual amortisation, from the Board of Trustees to the Chinese Government Railways
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