CO129-335 - Governor Nathan - 1906 [8-10] — Page 179

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ter's satisfaction, a quid pro quo might reasonably be forthcoming in the

form of more liberal terms of remuneration. The Viceroy had suggested 95,

as the price but in the existing conditions of the market the Corpora-

tion's proposals should give the Chinese Government 96 or 97. The question

was eventually left for further discussion, it being recognised that its

settlement must depend upon that of other clauses in the contract, e.g.

the question of orofit certificates.

As regards the latter, and the question of control after construc-

tion, the Corporation was prepared to waive its rights provided the other

conditions of the agreement could be amicably adjusted.

As regards the term of the loan, proposed by the Viceroy at 30

years with the option of redemotion after 10years, Mr. Bland pointed out

the unfavourable effect of so short a term uoon bond buyers and suggested

that a premium of 2 1/27 be payable upon eny bonds redeemed before the

lapse of 25 years.

Clause 2. CONTROL DURING CONSTRUCTION. This subject was generally dis-

cussed. B.E. T'ang Shao-yi expressed the opinion that the interest being

guaranteed by the Imperial Government, & system of control such as that

provided for in the Nanking Azreerent was inadrissable - and a Board of

Commissioners undesirable Mr. Flend thought that if the position and

powers of the Engineer-in-Chief and Auditor appointed by the Corporation

were satisfactorily arranged and defined, this question should not oresent

great difficulty: but it was essential for the purposes and success of the

ioan that the Railway be built and equipped in a thoroughly efficient

manner by the Corporation under the direction of the Chinese Covernment's

representative. (This matter was also discussed under Clause ĉ).

Clause S.

Bliminetion of this Clause proposed.

Clauses 4, 5, 7 and 8. Not discussed.

Clause 9. A.E. T'ang Shao-vi, whose views were supported by the Canton Viceroy's delegates, stated that the Viceroy's orcposals for commission on material were not acceptable to the Government. He held that as the selection of the materials lay primarily with the Engineer-in-Chief, under

the direction of the Chinese Government's representative, and as the Engineer-in-Chief was a paid employee of the Chinese Railway Administrat-