PUBLIC RECORD OFFICE
Reference :-
minimuim TEC.O. 882
6PUBLIC RECORD OFFICE, LONDON
ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH-NOT TO
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Sheng Kung Pao is expected in Peking early this month, and on his arrival Sir Ernest Satow hopes he may be able to arrange for the negotiations to be carried on either here or at Canton.
Loan Agreement.-Page 2, Lines 12, 13 and 14.
Sir Ernest Satow points out that this is incorrect. The Shanghai-Nanking Loan Agreement was signed on the 9th July, 1903, under authority of an Imperial Edict, dated 9th June, 1903.
There was no ratification, nor was any necessary. We propose, therefore, to alter above paragraph, so as to read:-
And whereas the said Final Contract for the Shanghai Nanking Railway was duly signed on 9th July, 1903, under authority of an Imperial Edict, dated 9th day of June, 1903.”
Loan Agreement.-Page 34, Article 23.
This will also require slight modification, and we propose to strike out the second word of the paragraph after" and substitute in its place the word " before."
Amount of Loan.
We note what you write in this connection in your letter, No. 50, of the 3rd March, addressed to Hong Kong. In the summary of the Loan Agreement above referred to you will observe that we have inserted therein £2,000,000, as amount of the proposed loan. We have, however, fully explained to the British Minister your views on this subject as contained in the above-mentioned letter.
CANTON-KOWLOON RAILWAY.
SUMMARY OF THE PROPOSED FINAL AGREEMENT BETWEEN CHINA AND THE BRITISH AND CHINESE CORPORATION, LIMITED.
ALSO SUMMARY OF THE PROPOSED WORKING AGREEMENT BETWEEN THE HONG KONG AND CHINESE GOVERNMENTS.
Loan.
To build and equip the railway, to pay for the necessary land and to provide for interest on the loan during construction and working capital, the British and Chinese Corporation is prepared to issue (on behalf of the Imperial Chinese Railway Administration) a sterling loan, in one or more parts as may be found necessary, for an amount not exceeding £2,000,000, such loan to be guaranteed unconditionally as to principal and interest by China, with the railway when completed as first mortgage security therefor.
Imperial Chinese Government Bonds to be issued for the entire sum, interest on the Bonds to be at the rate of 5 per cent. per annum and be payable half- yearly.
Duration of the loan to be fixed at 50 years, commencing from the date of this agreement.
Price for the loan to be 90 per cent. of the nominal value.
After 12 years from date of issue, China can redeem the whole or any portion of the Bonds, but if they be redeemed before 25 years from date of issue, a premium of 24 per cent. over face value must be paid, after 25 years, however, the Bonds may be redeemed without payment of any premium.
Until interest and principal of loan and all other indebtedness is paid off, China shall not again mortgage the railway to another party, whether Chinese or foreign.
Construction.
The construction and equipment of the railway to be carried out by and under the direction of the Imperial Chinese Railway Administration with the aid of the British and Chinese Corporation.
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When work of construction is ready to begin, a Board shall be appointed for supervising construction, to be called the Board of Commissioners, whose head office shall be at Hong Kong.
This Board to be composed of five members, each of whom shall have one vote, i.e.:-
two members representing the Imperial Chinese Railway Administration; two members representing the British and Chinese Corporation;
and the Engineer-in-Chief, who shall be appointed and be removable by the
British and Chinese Corporation.
In addition to the above members, the Viceroy of Canton may also appoint an official of rank to this Board, whose duty will be to report to him on the state of the railway accounts and progress of the work of the railway, but who shall have no vote.
Construction may be carried out either departmentally or through the agency of contractors or in whatever way shall appear most likely to produce effective con- struction in the most economical manner.
The executive work to be under the supervision of the Engineer-in-Chief and to be in accordance with plans and specifications approved by the Consulting Engineers.
Work to be commenced within 12 months of signing the agreement, otherwise agreement null and void.
The line when completed to be a first-class railway on the standard gauge of 4 feet 8 inches, with all necessary accessories for the working of the traffic which may reasonably be expected thereon.
Lekin, Customs Duty, and Taxes.
All material imported for the construction and use of the railway to be free from lekin and customs duty.
No special taxes to be levied on the railway, its appurtenances or earnings, but all taxes which are applicable generally to all commercial transactions in China shall also apply in the case of this railway and its operations.
Lekin to be paid on goods and passengers in the manner as customary on other railways in China, but any arrangement for the levy of lekin over other railway lines which shall be found to be more advantageous than that employed on this railway to be extended to and enjoyed by this railway and by those who make use of the same.
Accounts.
Accounts to be kept by a thoroughly qualified Chief Accountant, whose books and records are at all times to be open to the inspection of the Board of Com- missioners.
All accounts to be kept in English and Chinese, and to be submitted quarterly for information of the Wai Wu Pu.
All railway funds, whether proceeds of the loan or revenue to be deposited in the Hong Kong and Shanghai Banking Corporation, and to be withdrawn only by cheques jointly signed by one Chinese and one British member of the Board of Commissioners.
Land.
•
Land to be secured by the Chinese Administration in accordance with detailed plans to be supplied by the Engineer-in-Chief, sufficient for a double line for the whole distance.
The cost of land to be paid for out of the loan, but must not in any case exceed £100,000.
Remuneration to British and Chinese Corporation.
As remuneration for superintendence and services the British and Chinese Corporation to receive 5 per cent, on the entire cost of all materials purchased for the railway. All materials required for the railway to be purchased by the British and Chinese Corporation in the open market at the lowest price obtainable.
18885
R 2