CO882-(6-8) — Page 76

PUBLIC RECORD OFFICE

חוו

Reference :-

C.O. 882

ĥ

PUBLIC RECORD OFFICE, LONDON

ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH-NOT TO

· 516

way. This office will be under the direction of a Chinese Managing Director (appointed by the Viceroy), with whom will be associated a British Engineer-in- chief, and a British Chief Accountant. These British employés shall be proposed and certified as competent for their posts by the Corporation, and shall be approved by the Viceroy; if their services should prove unsatisfactory to the Viceroy, he shall request the Corporation to dispense with their services and to nominate their successors, and, in the event of the Corporation desiring to remove them for good cause, it shall do so in consultation with the Viceroy. "It is understood that the duties performed by these employés are intended to promote the mutual interests of the Chinese Government and the bondholders respectively, and it is therefore agreed that all cases of difference arising therefrom shall be referred for amicable adjustment between the Viceroy and the representative of the Corporation. The salaries and other terms of agreement of the Engineer-in-chief and the Chief Accountant shall be proposed by the Corporation, for approval by the Viceroy, and the amount of their salaries, &c., shall be paid out of the general accounts of the railway.

For all important technical appointments on the railway staff Europeans of experience and ability shall be engaged, and wherever competent Chinese are avail- able they shall also be employed. All such appointments shall be made, and their functions defined by the Managing Director and the Engineer-in-chief in consulta- tion, and shall be submitted for the Viceroy's approval; similar procedure shall be followed in the case of Europeans employed in the Chief Accountant's depart- ment. In the event of the misconduct, or the incompetency, of European employés their services may be dispensed with by the Managing Director, after consultation with the Engineer-in-chief, and subject to the sanction of the Viceroy. The form of agreements made with European employés shall conform to the usual practice.

The accounts of the receipts and the disbursements of the railway's construction and operation shall be kept in Chinese and English in the department of the Chief Accountant, whose duty it shall be to organize and supervise the same, and to report thereon for the information of the Viceroy through the Managing Director and of the Corporation. All receipts and payments shall be certified by the Chief Accountant, and authorized by the Managing Director.

For the general technical staff of the railway the necessary arrangements shall be made by the Managing Director in consultation with the Engineer-in-chief, and reported to the Viceroy in due course.

The duties of the Engineer-in-chief shall consist in the efficient and economical construction and maintenance of the railway, and the general supervision thereof in consultation with the Managing Director. He shall always give courteous con- sideration to the wishes and instructions of the Viceroy, whether conveyed directly or through the Managing Director, and shall always comply therewith, having at the same time due regard to the efficient construction and maintenance of the railway.

A school for the education of Chinese in railway matters shall be established by the Managing Director, subject to the approval of the Viceroy.

Article 7. Under the provisions of Article 3 of this Agreement the properties covered by the first mortgage security hereby created include the railway, its pro- perty and equipment, and the mortgage is to be executed by a deed in the form contemplated by the said article. But subject to the guarantee and mortgage thus given by the Chinese Government, it is hereby declared that this railway is in fact a Chinese property.

All land that may be required along the whole course of the railway within survey limits, and for the necessary sidings, stations, repairing shops, and car sheds, to be provided for in accordance with the detailed plans now made or hereafter to be made by the Engineer-in-chief, and approved by the Viceroy, shall be acquired by the Viceroy at the actual cost of the land, and shall be paid for out of the proceeds of the loan.

The title deeds of the land for the railway and all other lands shall be free from all encumbrances and entanglements, and shall from time to time as soon as secured be registered in the name of the railway.

Notices of all purchases of lands for the railway within the survey limit (together with the corresponding title deeds) are to be transmitted by the railway head office, under the direction of the Viceroy, to the local agent to the Corporation for record and preservation in its office in Hong Kong, and for the purpose of

517

establishing the first mortgage security until the time when the same are to be returned to the Viceroy as hereinafter in this article provided.

A lands, the title deeds of which are lodged with the Corporation as part of the first mortgage security of the loan, shall not be disposed of in any way by hire, lease, or sale to any party, for any purpose whatsoever, without the written consent of the Viceroy, except only in the event of the Imperial Chinese Government failing to pay the interest or principal of the bonds, and then in accordance with the powers in the deed of mortgage.

The land thus bought shall be free from all encumbrances, liabilities, and entanglements and shall be conveyed by full and sufficient deeds of assignment according to Chinese law, all of which are to be kept and recorded in the Hong Kong office of the Corporation, and are to be held by it as a first mortgage security for the bonds under the provisions of this Agreement until such time as principal and interest of the bonds, together with all indebtedness, shall have been paid off, when the same shall then be returned to the Viceroy, except only in the case of the Imperial Chinese Government's failure to pay the interest on principal of the bonds and consequent realization under the powers of the mortgage security.

For the properotection of the first mortgage security, the Chinese Govern- ment undertakes that, ntil the bonds shall have been redeemed, no part of the lands comprised in the mortge security or the railway, with its appurtenances, shall be transferred or given to other party, or shall be injured, or that the rights of the first mortgage shall be any way impaired, unless with the consent in writing of the Corporation, which still only be given if, in the opinion of the Corporation, the interests of the bondholder will not be affected.

And further, that until the interest and principal of the loan and all the indebtedness shall have been paid off, or unless with the express consent in writing of the Corporation, the Chinese Government or the Viceroy shall not again mortgage the above properties to another party, whether Chinese or foreign.

During the period of this agreement no special taxes shall be levied by the Chinese Government on the raily, its appurtenances or earnings; but all taxes at present payable, such as land tax, as well as any taxes which the Chinese Govern- ment may hereafter institute, such as stamp duty, &c., and which may be applicable generally to all commercial transactions in China, shall also apply in the case of the railway and its operations.

Article 8. It is agreed that if the half-yearly interest on the bonds is not paid on any due date thereof, or if the principal of the loan be not paid in accordance with the Amortization Schedule herete attached, the whole railway, with all its appurtenances herein mortgaged to the Corporation for the bondholders, shall be handed over to the Corporation to be dealt with by it according to law in such manner as will insure the proper protection of the interests of the bondholders: Provided, however, that if the failure to make payment at any one date be due to causes beyond the control of the Chinese Government, and if the Viceroy request the Corporation to postpone the taking over of the railway for a reasonable period grace, the question shall be amicably discussed and decided between the Viceroy and the representative of the Corporation. When the whole loan, and the interest due thereon, and all the indebtedness, shall have been paid off, the railway, with all its appurtenances in good working condition, shall revert to the possession and management of the Chinese Government, according to the provisions of this Agree-

of

ment.

Article 9. As remuneration for all services rendered by the Corporation during construction of the railway, the Corporation shall receive the sum of £35,000, half of which shall be paid when the construction work is half completed, but not later than eighteen months after commencement of construction and the other half upon completion of the line. This amount shall be regarded as a commutation of all commissions to which the Corporation and its agents would properly be entitled, and of payments of all services rendered in the construction and equipment of the railway in respect of the present loan; but in the event of a branch line being decided upon by the Chinese Government for construction in connection with this railway, and if the Chinese Government decide to build the same by issue of a foreign loan and not from its own resources, then the Corporation shall have the first option of tendering for such loan, and a further payment, proportionate to the amount of such supplementary loan, and calculated at the same rate as the commutation hereinabove mentioned, shall be made to the Corporation as commuta- tion of its commission for all services in respect of construction.

!