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9. The Syndicate will be authorized to issue to the subscribers to the loan provisional bonds for the total amount of the loan in pounds sterling, in such form, in such languages, and for such amounts as shall appear advisable to the Syndicate. These provisional bonds shall he changed into the definitive bonds, which shall be sealed by the Minister for China in Berlin or London, as the case may be, as evidence that the Imperial Government of China is bound thereby as debtor of the loan. The form of the definitive bonds to be approved by the Minister for China in Berlin and London. Whatever foreign language may be used for the wording of the bonds, the Chinese text also to be printed thereon.
In the event of bonds issued for this loan being lost, stolen, or destroyed, the Deutsch-Asiatische Bank or the Chinese Central Railways (Limited) shall immediately notify thereof the Imperial Directors or the Chinese Minister in Berlin or London, as the case requires, and shall take such other steps as may appear advisable or necessary according to the laws and customs of the country; should such bonds not be recovered after a lapse of time to be fixed by the bank, the Imperial Directors or the Chinese Minister in Berlin or London shall seal and execute duplicate bonds for a like amount and hand them to the respective member of the Syndicate, by whom all expenses in connection therewith shall be defrayed.
10. All bonds and coupons and payments made aud received in connection with the service of this loan shall be exempt from all Chinese taxes and imposts during the- currency of this loan.
Interest coupons not presented for payment within five years and drawn bonds not presented within thirty years after they are due will become worthless.
11. All details necessary for the prospectus and connected with the service of the interest and repayment of the principal of this loan not explicitly provided for shall be left to the arrangement of the Syndicate, in conjunction with the Imperial Directors or with the Chinese Minister in London or Berlin, as the case may be. The Syndicate will be authorized to issue a prospectus of the loan as soon as possible after the signing of the present Agreement.
The Imperial Government of China will instruct the Chinese Ministers in Berlin and London to co-operate with the Syndicate in any matters requiring conjoint action, and to sign the prospectus of the loan.
12. The loan shall be floated in one or more parts, at the discretion of the Syndicate, due regard being had to the interest of Chiua; but the floating of the loan shall not be delayed more than necessary, and subscriptions will be invited by the Syndicate in Europe and in China, from both Europeans and Chinese, on equal conditions, preference to be given to any application from the Chinese Government.
18. The price of the loan shall be 90 per cent, net on the nominal principal to the Chinese Government. The Deutsch-Asiatische Bank shall take
1. of the loan
at this price, and the Chinese Central Railways (Limited) shall take
Į. of the loan at the same price, without responsibility for each other. On account of the proceeds of the loan an amount of 500,000l. will be held by the Syndicate at the disposal of the Boards of Commissioners within six months after signing this Agreement. The Syndicate has the right to charge interest on this amount until its reimbusement, to be paid out of the proceeds of the loan or otherwise at the same rate which the money invested in the loan is yielding. The proceeds of the loan shall, in proportion to the amounts to be taken by the aforesaid two parties, be paid to the credit of a Govern- ment railway account with the Deutsch-Asiatische Bank, Berlin, and of a Government railway account with the Hong Kong and Shanghae Banking Corporation, London. The payment into the credit of this account shall be made in such instalments and on such dates as the conditions allowed to the subscribers to the loan shall admit. Interest at the rate of 4 per cent, shall be granted by the Syndicate on the credit balance of these railway accounts. After deduction of the funds required for the service of interest and for commission on this service during the time of construction the Deutsch-Asiatische Bank will hold the proceeds with accrued interest to the order of the Board of Commissioners appointed for the northern section of the railway lines, and the Hong Kong and Shanghae Banking Corporation will hold the proceeds with accrued interest to the order of the Board of Commissioners appointed for the southern section of the railway lines. The Commissioners, in drawing any suns exceeding 10,000l., necessary for the construction shall give notice to the bank fourteen days before the day on which they are required.
14. If during the time of construction the whole amount of the instalments with accrued interest to be paid by the Syndicate should, after deduction of the sums necessary for the service of interest on the loan, not be sufficient for the construction of
મ
the railway lines the amount of deficiency shall be provided by a supplementary loan to be issued by the Syndicate, the interest and other conditions of which are to be the same as in the present Agreement, but the price must be arranged when the time arrives, due If after the completion of the lines regard being had to the conditions of the market. and after having made provision for a fund for working them there should be a balance at credit of one or the other of the railway sections such unused balance shall in the first place be employed to compensate an eventual deficiency existing on the account of the other section, and if not needed for such purpose it shall be transferred to the credit of the loan service reserve fund hereinafter mentioned as a provision for payments to which the Government is bound by this Agreement.
15. If before the publication of the prospectus for the issue of the loan any political or financial crisis should take place or still prevail in Europe or elsewhere by which the markets and the prices of existing Chinese Government stocks are so affected as to render in the judgment of the Syndicate the successful issue of the loan impossible on the terms herein named, the Syndicate shall be granted such extension of time not exceeding eighteen months from the date of this Agreement for the performance of their contract as the circumstances demand, or shall have the right to withdraw from the present contract with the Chinese Imperial Government which shall in that case become null and void, and the amount of 500,0001. paid in accordance with Article 13, together with accrued interest shall be repaid to the Syndicate. Likewise sach extension of time for the performance of the contract shall be granted, if the succesful issue of any other part of the loan should be prevented by unfavourable markets and prices of existing Chinese Government stocks.
16. The northern section of the railway lines shall be constructed, equipped, and worked on behalf of the Imperial Chinese Government by the Deutsch-Asiatische Bank, departmentally or by contract, and the southern section of the railway lines shall be constructed, equipped, and worked by the Chinese Central Railways (Limited), depart- mentally or by contract under conditions as follows. For each of these sections a Board of Commissioners shall be appointed to manage the construction, equipment, and working of the railway lines, in accordance with regulations to be arranged between the Imperial Directors and the Deutsch-Asiatische Bank and the Chinese Central Railways (Limited). These Regulations shall be identical for the two Boards and shall insure through passage of rolling-stock over the whole line.
17. An office shall be provided for the Imperial Directorate in Tien-tsin, and head- offices shall be established for the Board of Commissioners of the northern section in Tsinan-fu, and for that of the southern section in Shanghae.
The Boards of Commissioners of the northeru and southern sections of the line ap- pointed to manage the construction and administration shall each consist of four members, of whom two are to be Chinese, one to be appointed by the Director-General and one by the Director-General in consultation with the high authorities of the province through which the line passes, and (besides the Engineers-in-chief) there shall be two European members selected and appointed by the Deutsch-Asiatische Bank in respect of the northern section, and two European members selected and appointed by the Chinese Central Railways (Limited) in respect of the southern section. The salaries of the members of each Board are to be fixed by the Director-General and the Deutsch-Asiatische Bank and the Chinese Central Railways (Limited) respectively, and to be paid from the general accounts of the railway. The Regulations for the guidance of the Boards of Commissioners as to the conduct of business and procedure at the meetings shall be subsequently drawn up by the Director-General in consultation with the agents of the Deutsch-Asiatische Bank and the Chinese Central Railways (Limited) respectively. In case of disagreement between the Chinese and European members the matter shall be referred to the Director-General and the Agent of the Deutsch-Asiatische Bank and the Chinese Central Railways (Limited) resident in China for adjustment in an amicable way.
The appointments and functions of all the employees of the railway, Chinese and foreigners, with the exception of the Engineers-in-chief, who shall be nominated by the Deutsch-Asiatische Bank and the Chinese Central Railways (Limited) respectively and approved by the Director-General, as well as their salaries, including those of the officials of high rank referred to in the following paragraphs, are to be made and fixed by the respective Boards of Commissioners and reported to the Director-General.
of
In the case
important appointments the same shall be first reported to the Director-General by the Chinese members of the respective Boards.
In addition to the Boards of Commissioners the Viceroy (the Superintendent of Northern Trade) may also appoint to each of the Boards an official of equal rank with the above-mentioned two Chinese officials whose duties will be to make report for the
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