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the said Engineer or to the place where he resided last. When the said Engineer has occasion to send a letter to the railway he shall direct it to the office of the railway. In both cases the letters will be considered as having been received,
9. If the said Engineer, within the term of his engagement, without any reasonable ground resigns his position, he shall lose all the benefits stipulated for in this Agreement, except his salary up to the date of his resignation. In all great and important matters connected with the carrying out of his duties, the said Engineer shall first obtain the sanction of the General Manager before carrying it out. Except in cases when he has obtained special leave of absence or when he is too ill to attend to his duties, the said Engineer shall not fail to attend daily to his duties. In case the said Engineer neglects or violates any of the above conditions or any Articles in this Agreement or disobeys the orders of the General Manager or of his deputy or of any person whom the General Manager appoints to give him orders or acts in wilful disagreement with the General Manager, then, and in all such cases, the General Manager shall have the right to dismiss the said Engineer and at once to cancel the present Agreement and to stop his salary as from the date of cancellation, and to refuse to pay his return-passage money to Europe, and the said Engineer shall not be entitled to any compensation whatever. In case the said Engineer resigns, and the General Manager is satisfied with the reason of his resignation, or in case the said Engineer should be obliged to return to Europe through sickness, his salary and return-passage money will be paid according to the third Article of this Agreement.
10. The said Engineer, being well acquainted with the climate and conditions of life in China, the General Manager will not hold himself responsible for any sickness, accident, or injury suffered by the said Engineer whether living in China or on the voyage home. In case the said Engineer should be continuously incapacitated for work for more than four weeks or should be found to be careless or negligent in his duties, or should he absent himself without cause, or should he be guilty of disreputable conduct, or should he refuse to receive and obey the orders of the General Manager, then the General Manager reserves the right to cancel this contract and to refuse to pay his return passage to Europe: Provided nevertheless that if the said Engineer should be really incapacitated through sickness beyond the four weeks, and on that account immediately leaves for home, the railway will pay the passage money, according to the third Article of this Agreement. If, however, after medical examination by a medical man sent by the railway, it should be found that he is not in such a state of health as to prevent him from travelling and he does not immediately go home, then the passage money will not be paid or, if paid, should be refunded.
11. As soon as this Agreement is signed the said Engineer shall at once place his services at the disposal of the railway. After the line is built and in operation, whenever the General Manager has occasion to consult him on any question connected with the operation of the line, it will be his duty to assist to the best of his abilities.
In case the present General Manager should for some reason cease to hold his position, the power and authority given to him by the present Agreement shall be deemed to be transferred to the person who shall be duly elected as General Manager. The said Engineer shall obey the new General Manager according to the terms of this Contract as though he had been a party to it. In case of disagreement between the General Manager and the said Engineer, the matter will be settled in accordance with this Agreement by the President and Vice-President of the Board of Directors of the Company, who have the power of deciding upon any difference arising between the General Manager and the said Engineer. In the case of any difference arising as to the construction of this Agreement, both the Chinese and English shall be held as correct, and the matter shall be referred for decision to two Arbitrators (each party shall, by writing, appoint one Arbitrator) or, in case of disagreement between the Arbitrators, to an Umpire chosen by the two Arbitrators. The arbitration fees shall be paid by the party against whom the decision is given.
Inclosure 4 in No. 1.
which it will be observed that the Director-General considers it unnecessary that the stipulated security for payment of interest on the bonds shall be deposited with the Hong Kong and Shanghae Bank, as provided for in that Article. The fact appears to be indisputable that the Chinese Government does not seriously regard the obligations entered into by this Loan Agreement, the terms whereof were nevertheless sanctioned by Imperial Edict and officially communicated to your Excellency by the Wai-wu Pu. There exists, moreover, no room for doubt that, simultaneously with the signature of this Agreement, the Yuchuan Pu, under Imperial sanction, divested itself of, and transferred to the Provincial Railways Bureau, responsibility for the efficient and proper construction of the railway, an obligation which, by the Loan Agreement, was definitely accepted by the Yuchuan Pu on behalf of the Imperial Chinese Government.
I have, &c.
J. O. P. BLAND.
Sir,
(Signed)
Inclosure 5 in No. 1.
Mr. Bland to Liang Shih-yi.
British and Chinese Corporation (Limited), Peking, June 18, 1908.
I HAVE the honour to request that, in accordance with the provisions of Article 9 of the Shanghae-Hangchow-Ningpo Loan Agreement, your Excellency may be pleased to give the necessary instructions for deposit with the Hong Kong and Shanghae Banking Corporation, from the surplus earnings of the Imperial Railways of North China, of the amount required to meet the first half-year's instalment of interest on the Shanghae-Hangchow-Ningpo loan, that is to say, 37,500.
(Translation.)
Sir.
I have, &c. (Signed) J. O. P. BLAND.
Inclosure 6 in No. 1.
Liang Shih-yi to Mr. Bland.
Peking, June 24, 1908. I AM in receipt of your letter of the 20th day of the 5th moon (18th June), referring to the provisions of Article 9 of the Shanghae-Hangchow-Ningpo Railway Agreement, under which the surplus earnings of the Imperial Railways of North China are to be deposited with the Hong Kong and Shanghae Bank as security for the interest payable on the Shanghae-Hangchow-Ningpo Railway Loan.
The object of inserting this stipulation in the Agreement was to afford the bond-holders a means of recouping themselves, should it be found impossible to pay the interest at the moment it became due. The total amount of the loan, however, has not yet been handed over by the subscribers, and the funds deposited with the Hong Kong and Shanghae Bank in London on behalf of the Chinese Government amount to some 260,000. only. The amount of interest now due on the loan, therefore, is quite inconsiderable, and the funds in London are more than sufficient security therefor.
The object of the bondholders was to obtain security for their money, and the Agreement has been drawn up solely with a view to attain that object. But is not their position sufficiently safeguarded by the fact that the Shanghae Hangchow-Ningpo Railway Loan funds are still deposited in London? I fail to understand how anything further than this can possibly be necessary. To set aside funds for a purpose for which they would not be required would cause considerable trouble, while no corresponding advantage would be gained; and I feel sure that you too will agree with this view.
LIANG SHIH-YI.
(Signed)
Inclosure 7 in No. 1.
Mr. Bland to Liang Shih-yi.
Sir,
Mr. Bland to Sir J. Jordan,
Peking, July 31, 1908.
I HAVE the honour to inclose copy of correspondence which has passed between his Excellency Liang Shih-yi and myself, having reference to my request for fulfilment of the terms of Article 9 of the Shanghae-Hangchow-Ningpo Railway Agreement, from
Sir,
British and Chinese Corporation (Limited), Peking, June 25, 1908.
1. BEG to acknowledge receipt of your letter of yesterday's date, replying to mine of the 18th instant, in regard to depositing in the Hong Kong and Shanghae Bank,
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the said Engineer or to the place where he resided last. When the said Engineer has occasion to send a letter to the railway he shall direct it to the office of the railway. In both cases the letters will be considered as having been received,
9. If the said Engineer, within the term of his engagement, without any reasonable ground resigns his positon, he shall lose all the benefits stipulated for in this Agreement, except his salary up to the date of his resignation. In all great and important matters connected with the carrying out of his duties, the said Engineer shall first obtain the sanction of the General Alanager before carrying it out. Except in cases when he has obtained special leave of absence or when he is too ill to attend to his duties, the said Engineer shall not fail to attend daily to his duties. In case the said Engineer neglects or violates any of the above conditions or any Articles in this Agreement or disobeys the orders of the General Manager or of his deputy or of any person whom the General Manager appoints to give him orders or acts in wilful disagreement with the General Manager, then, and in all such cases, the General Manager shall have the right to dismiss the said Engineer and at once to cancel the present Agreement and to stop his salary as from the date of cancellation, and to refuse to pay his return-passage money to Europe, and the said Engineer shall not be entitled to any compensation whatever. In case the said Engineer resigns, and the General Manager is satisfied with the reason of his resignation, or in case the said Engineer should be obliged to return to Europe through sickness, his salary and return-passage money will be paid according to the third Article of this Agreement.
10. The said Engineer, being well acquainted with the climate and conditions of life in China, the General Manager will not hold himself responsible for any sickness, accident, or injury suffered by the said Engineer whether living in China or on the voyage home. In case the said Engineer, should be continuously incapacitated for work for more than four weeks or should be found to be careless or negligent in his duties, or should he absent himself without cause, or should he be guilty of disreputable conduct, or should he refuse to receive and obey the orders of the General Manager, then the General Manager reserves the right to cancel this contract and to refuse to pay his return passage to Europe: Provided nevertheless that if the said Engineer should be really incapacitated through sickness beyond the four weeks, and on that account immediately leaves for home, the railway will pay the passage money, according to the third Article of this Agreement. If, however, after medical examination by a medical man sent by the railway, it should be found that he is not in such a state of health as to prevent him from travelling and he does not immediately go home, then the passage money will not be paid or, if paid, should be refunded.
11. As soon as this Agreement is signed the said Engineer shall at once place his services at the disposal of the railway. After the line is built and in operation, whenever the General Manager has occasion to consult him on any question connected with the operation of the line, it will be his duty to assist to the best of his abilities.
In case the present General Manager should for sonic reason cease to hold his position, the power and authority given to him by the present Agreement shall be deemed to be transferred to the person who shall be duly elected as General Manager. The said Engineer shall obey the new General Manager according to the terms of this Contract as though he had been a party to it. In case of disagreement between the General Manager and the said Engineer, the matter will be settled in accordance with this Agreement by the President and Vice-President of the Board of Directors of the Company, who have the power of deciding upon any difference arising between the General Manager and the said Engineer. In the case of any difference arising as to the construction of this Agreement, both the Chinese and English shall be held as correct, and the matter shall be referred for decision to two Arbitrators (each party shall, by writing, appoint one Arbitrator) or, in case of disagreement between the Arbitrators, to an Umpire chosen by the two Arbitrators. The arbitration fees shall be paid by the party against whom the decision is given.
Inclosure 4 in No. 1.
which it will be observed that the Director-General considers it unnecessary that the stipulated security for payment of interest on the bonds shall be deposited with the Hong Kong and Shanghae Bank, as provided for in that Article. The fact appears to be indisputable that the Chinese Government does not seriously regard the obligations entered into by this Loan Agreement, the terms whereof were nevertheless sanctioned by Imperial Edict and officially communicated to your Excellency by the Wai-wu Pu. There exists, moreover, no room for doubt that, simultaneously with the signature of this Agreement, the Yuchuan Pu, under Imperial sanction, divetsed itself of, and transferred to the Provincial Railways Bureau, responsibility for the efficient and proper construction of the railway, an obligation which, by the Loan Agreement, was definitely accepted by the Yuchuan Pu on behalf of the Imperial Chinese Government.
I have, &c.
J. O. P. BLAND.
Sir,
(Signed)
Inclosure 5 in No. 1.
Mr. Bland to Liang Shih-yi.
British and Chinese Corporation (Limited), Peking, June 18, 1908.
I HAVE the honour to request that, in accordance with the provisions of Article 9 of the Shanghae-Hangchow-Ningpo Loan Agreement, your Excellency may be pleased to give the necessary instructions for deposit with the Hong Kong and Shanghae Banking Corporation, from the surplus earnings of the Imperial Railways of North China, of the amount required to meet the first half-year's instalment of interest on the Shanghae--Hangchow-Ningpo loan, that is to say, 37,5001.
(Translation.)
Sir.
I have, &c. (Signed) J. O. P. BLAND.
Inclosure 6 in No. 1.
Liang Shih-yi to Mr. Bland.
Peking, June 24, 1908. I AM in receipt of your letter of the 20th day of the 5th moon (18th June), referring to the provisions of Article 9 of the Shanghae-Hangchow-Ningpo Railway Agreement, under which the surplus earnings of the Imperial Railways of North China are to be deposited with the Hong Kong and Shanghae Bank as security for the interest payable on the Shanghae-Hangchow-Ningpo Railway Loan.
The object of inserting this stipulation in the Agreement was to afford the bond- holders a means of recouping themselves, should it be found impossible to pay the interest at the moment it became due. The total amount of the loan, however, has not yet been handed over by the subscribers, and the funds deposited with the Hong Kong and Shanghae Bank in London on behalf of the Chinese Government amount to some 260,0007. only. The amount of interest now due on the loan, therefore, is quite inconsiderable, and the funds in London are more than sufficient security therefor.
The object of the bondholders was to obtain security for their money, and the Agreement has been drawn up solely with a view to attain that object. But is not their position sufficiently safeguarded by the fact that the Shanghae Hangchow-Ningpo Railway Loan funds are still deposited in London ? I fail to understand how anything further than this can possibly be necessary. To set aside funds for a purpose for which they would not be required would cause considerable trouble, while no corresponding advantage would be gained; and I feel sure that you too will agree with this view.
LIANG SHIH-YI.
(Signed)
Inclosure 7 in No. 1,
Mr. Blund to Liang Shih-yi.
Sir,
Mr. Bland to Sir J. Jordan,
Peking, July 31, 1908.
I HAVE the honour to inclose copy of correspondence which has passed between his Excellency Liang Shih-yi and myself, having reference to my request for fulfilment of the terms of Article 9 of the Shanghae-Hangchow-Ningpo Railway Agreement, from
Sir,
British and Chinese Corporation (Limited), Peking, June 25, 1908.
1. BEG to acknowledge receipt of your letter of yesterday's date, replying to mine of the 18th instant, in regard to depositing in the Hong Kong and Shanghae Bank,
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į
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