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adopted for the conduct of these negotiations under the instructions recently conveyed to the Chinese Commissioners by the Board of Communications.
Taotais Liang and Chow recognize that they are duly authorized to negotiate and to submit their recommendations to Peking as the negotiations proceed; but inasmuch as it is their duty to keep the Board regularly informed of the results of each meeting, they propose that before proceeding to consideration of the revised draft a translation of the same be made, by the help of which the Board may be in a position to follow the course of the negotiations.
Mr. Cordes accordingly undertakes to prepare this translation, submitting a first instalment thereof at next meeting.
In regard to the procedure for recording and confirming the Minutes, it is decided that they will continue to be drafted in English and forwarded without delay to the Chinese Commissioners for confirmation at the next meeting.
After some general discussion of the revised draft Agreement the meeting is adjourned to Saturday next.
Gentlemen,
Inclosure 2 in No. 1.
Messrs. Cordes and Bland to Chinese Delegates.
Peking, February 5, 1907.
IN accordance with the decision recorded at our last meeting, we have now the honour to forward to you herewith, in triplicate, a new draft of the proposed Agree- ment for the Tien-tsin-Yang-taze Railway. You will observe that, with a view to meeting the wishes of the Chinese Government, the terms of the preliminary Agree- ment are herein considerably modified, especially in regard to the system under which the railway is to be worked and controlled, and we trust therefore that the Board of Communications may now be able and willing to bring these protracted negotiations to their conclusion. The terms now proposed, to which the Directors in Berlin and London have consented as the result of our representations in this matter, should serve to convince the Chinese Government that the Syndicate sincerely desires to carry out this important enterprise under reasonable conditions of mutual advantage, and with due recognition of the existing political and financial situation. Beyond these conditions, however, the Syndicate is not prepared to go; and in consenting to these radical modifications of the preliminary Agreement we are instructed to record this fact, and to state that should the final Agreement not be concluded by the Chinese Government on the terms now proposed, the Syndicate reserves its rights to revert to the terms of the preliminary Agreement as an obligation sanctioned by the Throne, and binding in its entirety upon the Chinese Government. We venture to suggest that the famine now prevailing in the region traversed by the southern section of this trunk line should make these negotiations a matter of urgency, for upon their conclusion relief work on embankment construction could speedily be organized with funds advanced by the Syndicate.
We would request that, in forwarding the present redraft to the Board of Communications, you may be good enough to submit this suggestion for the con- sideration of the Chinese Government.
With your approval we would propose to meet, for discussion of the amended draft, on Saturday next, the 9th instant, at 3 P.M.
Inclosure 3 in No. 1.
We have, &c.
New Draft of the Proposed Agreement for the Tien-tsin-Yang-tsze Railway.
ARTICLE 1. The Imperial Government of China authorizes the Syndicate Banks to issue a 5 per Cent. Gold Loan for an amount of
The loan shall be dated the
and called "The Imperial Chinese
4 per Cent. Tien-tsin-Yang-tsze Railway Loan."
1.
Art. 2. The loan is designed to provide the capital for the construction of Government railway lines from a point connecting the Imperial Railways of North China at or near Tien-tsin, through Techou and Tsinan-fu to I-hsien, near the southern
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frontier of Shantung, hereinafter known as the northern section of the Tien-tsin- Yang-tsze Railway lines, and from I-hsien to Pu K'ou(opposite Nanking on the Yang-tsze Kiang), hereinafter known as the southern section of the Tien-tsin-Yang-tsze Railway lines. The total length of these two sections being about kilom., equal to about Chinese li. The survey line shall be open to revision by the head offices, and subject to the Director-General.
Art. 3. The capital so provided will include the funds required for the purchase of land, rolling-stock, and other equipment, and for working the lines, together with interest on the loan during the period of construction, which should not exceed four years from the actual beginning of the works, the commencement of the works not to be delayed beyond six months after this Agreement has been signed, within which period the sum of 500,000. shall be placed at the disposal of the Director-General as a first instalment on account of the proceeds of the loan. This amount of 500,000, together with interest thereon not exceeding a charge of 6 per cent. per annum, shall be deducted from the proceeds of the first sale of the bonds.
Art. 4. The rate of interest for the loan shall be 5 per cent, per annum on the nominal principal, and shall be paid for account of the Imperial Chinese Government during the time fixed for the construction out of the proceeds of the loan, and after- wards out of the revenue of the lines named in half-yearly instalments, according to the amounts and dates of the schedule attached to this Agreement.
Art. 5. The term of the loan shall be fifty years. Repayment of principal shall commence in the eleventh year from the date of the loan, and shall be made by a yearly sinking fund to the Syndicate banks in yearly instalments out of the revenue of the lines, according to the amounts and dates of the schedule attached to this Agreement.
Art. 6. In the event of the Imperial Chinese Government wishing to redeem after the lapse of fifteen years from the date of the loan the outstanding amount, or any portion of it, not yet due, it may do so by paying 24 per cent. premium; but if after the lapse of thirty years from the date of the loan, it may do so free of premium.
Art. 7. After the line has been completed, the yearly payments due for amor- tization and the half-yearly payments due for interest, except as otherwise provided in Article 4, shall be made, in accordance with the amounts and dates of the schedule attached to this Agreement, out of the net revenue of the railway lines to the Syndicate Banks by the Director-General, who shall hand to the banks at Shanghae or in Tien-tsin, fourteen days before the due dates named in the schedule, funds in Shanghae or Tien-tsin sycee sufficient to meet such payment in sterling in Europe, the rate of exchange for which shall be settled with the banks at the best rate procurable in the market. These payments may, however, be made in Europe on the date due, if the Imperial Chinese Government should have funds in Europe and desire so to use them.
In reimbursement of expenses connected with the service of interest and principal of the loan, the Syndicate Banks will receive a commission of per cent. on the annual loan service.
Art. 8. The Imperial Government of China hereby engages that the interest and principal of this loan shall duly be paid in full, and should the revenues of the railway not be sufficient to provide for the full and due payment of interest and repayment of principal of this loan, the Director-General shall memorialize the Throne, and the Imperial Government of China will thereupon make arrangements to insure that the amount of deficiency shall be met from other sources, and handed over to the banks fourteen days before the due date of the funds required to complete full payment of interest and repayment of principal.
Art. 9. The loan shall be secured by mortgage declared to be now entered into in equity by virtue of this Agreement, and shall, as soon as possible hereafter, be secured by a specific and legal first mortgage in favour of the Syndicate upon all lands, materials, rolling-stock, buildings, property and premises of every description purchased or to be purchased by the railway, and on the railway itself, as and when constructed, and on the revenue of all descriptions derivable therefrom.
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 remains unpaid at maturity of the same, the whole railway, with all its appurtenances herein mortgaged to the Syndicate for the bondholders, shall be handed over to the Syndicate to be dealt with by it according to law in such manner as will insure the proper protection of the interest of the bondholders. When the whole loan and the interest due thereon, and all indebtedness
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