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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 according to the provisions of this Agreement.
Art. 10. The Syndicate will be authorized to issue to the subscribers to the loan bonds for the total amount of the loan in pounds sterling, in such form, in such languages, and in such amounts as shall appear advisable to the Syndicate Banks. The form of such bonds shall be settled in consultation between the Director-General and the Syndicate. The bonds shall be engraved in English or German, as may be required, and the Chinese text shall also be printed thereon. They shall bear the facsimile of the signature of the Director-General and of his seal of office, in order to dispense with But the Chinese Minister in London or the necessity of signing them all in person. Berlin, as the case may be, shall, previous to the issue of any bonds, put his seal upon each bond with a facsimile of his signature, as a proof that the issue and sale of the bonds are duly authorized and binding upon the Chinese Government.
In the event of bonds issued for this loan being lost, stolen, or destroyed, the Syndicate Banks shall immediately notify the Director-General, or the Chinese Minister in Berlin or London, as the case requires, who shall authorize the banks to insert an advertisement in the public newspapers notifying that payment of the same has been stopped, and to 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 Syndicate Banks, the Director-General, or the Chinese Ministers in Berlin or London, as the case may be, shall seal and execute duplicate bonds for a like amount and hand them to the banks, by whom all expenses in connection therewith shall be defrayed.
Art. 11. All bonds and coupons, and payments made and 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.
Art. 12. 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 he left to the arrangement of the Syndicate Banks in conjunction with the Director-General, or with the Chinese Ministers in Berlin or Loudon, 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.
Art. 13. The loan shall be issued to the public in two series of bonds, the first issue to be made to the amount of 3,000,000l. as soon as possible after signature of this Agreement, and not later than twelve months from the date thereof. The price of the first series of bonds shall be per cent. of their nominal value
to the Chinese Government. The second series shall be issued in time to permit of uninterrupted continuance in the work of construction. Its price shall be determined at the time of issue with due recognition of the then existing conditions of the money market, it being understood that the price payable to the Chinese Government in respect to the second series shall be the actual rate of its issue to the public less a flotation commission of 54 per cent. retainable by the Syndicate Banks. Subscriptions will be invited by the Syndicate in Europe and in China both from Europeans and Chinese on equal conditions, preference being given to the application from the Chinese Government.
Art. 14. The proceeds of the loan shall be paid to the credit of a Tien-tsin- Yang-tsze Government railway account with the Syndicate Banks in China, London, or Berlin, as the case may be. The payment into the credit of this account shall be made in instalments and on dates conforming to the conditions allowed to the subscribers to the loan. Interest at the rate of 4 per cent. shall be granted on the credit balance of this railway account. After deduction of the funds required for the service of interest and for commission on this service during the time of construction, the Syndicate Banks will hold the proceeds with accrued interest to the order of the Director-General, who, in ordering payment of any sums exceeding 10,0001, shall give notice to the Syndicate Banks fourteen days before the day on which they are required.
Art. 15. If during the time of construction the whole amount of the instalments with accrued interest to be paid by the Syndicate Banks should, after deduction of
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the sums necessary for the service of interest on the loan not be sufficient for the construction of the railway lines, the amount of deficiency shall be provided by a supplementary loan to be issued by the Syndicate Banks, the interest and other conditions of which are to be the same as in the present Agreement, but the price thereof shall be arranged when the time arrives according to the condition of the market. If after the completion of the lines there should be a balance at credit of the railway account, the Syndicate Banks shall transfer such unused balance to the credit of the Loan Service Reserve Fund, hereinfter mentioned as a provision for payments to which the Government is bound by Article 8 of this Agreement.
Art. 16. If before the publication of the prospectus for the issue of the loan any political or financial crisis should take place by which the market and the prices of existing Chinese Government stocks are so affected as to render the successful issue of the loan impossible on the terms herein named, the Syndicate Banks shall be granted further extension of time, but not beyond eighteen months from the date of this Agreement, for the performance of their contract, 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.
Art. 17. The general control of the railway, under the authority of the Board of Communications, shall be vested in a Director-General, to be duly appointed by the Chinese Government. When the work of construction is ready to begin, the Director- General will establish head offices in Tien-tsin and Nanking respectively for the construction, equipment, and working of the northern and southern sections of the railway. Each of these offices will be under the direction of a Chinese Managing Director, appointed by a Director-General, with whom will be associated a European Engineer-in-chief and a European Accountant. These employés shall be proposed and certified as competent for their posts by the British and German groups of the Syndicate for their respective sections, and shall be approved by the Director-General; if their services should prove unsatisfactory to the Director-General, he shall request the Syndicate to dispense with their services and to nominate their successors, and in the event of the Syndicate desiring to remove them for good cause, it shall do so in consultation with the Director-General. It is understood that the duties performed by these employés are intended to promote the mutual interests of the Chinese Govern- ment and the bondholders respectively, and it is therefore agreed that all cases of difference arising therefrom shall be referred for amicable adjustment between the Director-General and the representatives of the Syndicate. The salaries and other terms of agreement of the Engineers-in-chief and the Chief Accountants shall be proposed by the Syndicate for approval by the Director-General, 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 available they shall also be employed. All such appointments shall be made and their functions defined by the Managing Director and Engineer-in-chief of each section in consulta- tion, and shall be submitted for the Director-General's approval; similar procedure shall be followed in the case of the Chief Accountant's departments. In the event of the misconduct or the incompetency of European employés their services may be dispensed with by the respective Managing Directors after consultation with the Engineer-in-chief, and subject to the sanction of the Director-General. 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 Accountants, whose duty it shall be to organize and supervise the same, and to report thereon for the information of the Director-General, through the Managing Directors, and of the Syndicate. All receipts and payments shall be certified by the Chief Accountants and authorized by the Managing Directors.
For the general technical staff of the railway the necessary arrangements shall be made by the Managing Directors in consultation with the Engineers-in-chief, and reported to the Director-General in due course.
For the general working of the railway after completion of construction, and as its various sections are opened to traffic, the Managing Directors will make the necessary arrangements in consultation with the European Traffic Managers.
The duties of the Engineers-in-chief shall consist in the efficient aud economical construction and maintenance of their respective sections of the railway, and the They shall general supervision thereof in consultation with the Managing Directors. always give courteous consideration to the wishes and instructions of the Director-
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