CO129-337 - Public Offices & Foreign Office - 1906 — Page 152

I further inclose a copy of our Agreement with the Chinese Railway Administration under which the Chinese Government guarantee the loan.

I further have the honour to send you a chart showing the railway lines already constructed and hypothecated to the bank, and also the proposed extensions.

I need not point out how important it is that the railway entering into China Manchuria should be under British control, and that the important trade of Niuchwang shall not be diverted to Port Arthur or Talienwan.

I have, &c. (Signed)
EWEN CAMERON.

Inclosure 1 in No. 105.

Agreement.

This Agreement is made between his Excellency Hü, Governor of Peking, as Administrator-General of the Railways of North China within and without Shan-hai-Kuan, acting under the authority of the Imperial Chinese Government, hereinafter called the "Administrator-General," of the one part, and the Hong Kong and Shanghae Banking Corporation, for themselves and on behalf of the British firm of Jardine, Matheson, and Co., representing as joint agents the British and Chinese Corporation (Limited), hereinafter called the "Corporation," of the other part:

WHEREAS, on the 7th day of June, 1898, being the 19th day of the 4th month of the 24th year of the Emperor Kuang-Hsü, a preliminary Agreement was signed at Peking between the Administrator-General and the Hong Kong and Shanghae Banking Corporation, representing a British Syndicate, for a sterling loan for the equivalent of about 16,000,000 taels for the construction of a railway line from Chung-hou-so to Hsin-ming-t'ing and a branch line to Ying-tsu, and for the redemption of existing advances made to the Tien-tsin-Shan-hai-Kuan and Tien-tsin-Lucouchiao Railway lines;

Whereas in terms of the preliminary Agreement a period of three months from that date was allowed to the Syndicate to accept or decline its conditions; and
Whereas the Hong Kong and Shanghae Banking Corporation, before the expiration of the period named, duly notified the Administrator-General that it is prepared, with certain modifications, to arrange the issue of the loan upon the conditions named in the preliminary Agreement:

It is now agreed as follows:-

1. The Corporation agrees to issue on behalf of the Administrator-General a sterling loan for the amount of 2,300,000l, the proceeds of which are to be applied in the order following:

(1) To the redemption forthwith or at maturity of the loans and advances detailed in the statement attached to this Agreement which have been made by foreign banks to the Tien-tsin-Shan-hai-Kuan and the Tien-tsin-Lucouchiao Railway lines. The Administrator-General hereby certifies that the total amount of the liabilities due by the lines named does not exceed the sum of 3,000,000 taels.

(2.) To the carrying out within a period of three years from the date of this Agreement of certain improvements and additions to rolling-stock on the existing lines between Peking and Shan-hai-Kuan, recommended by the European Chief Engineer, and estimated by him to cost about 1,500,000 taels.

(3.) To the construction of a railway line from Chung-hou-so to Hsin-ming-t'ing, one from a point on that line near Shih-san-chan to Ying-tzu, and of a branch line from Nu-erb-ho to the collieries of Nanp'iao.

The Administrator-General engages that the construction of the new lines here specified shall be completed within a period of three years from the date of this Agreement.

2. In the event of the proceeds of this loan being insufficient for the completion of the new lines here specified, the Administrator-General will provide or will arrange with the Imperial Government of China to provide funds from other sources sufficient to complete their construction.

3. This loan shall be a first charge upon the security of the permanent way, rolling-stock, and entire property, with the freight and earnings of the existing lines

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