6
(Translation.)
Inclosure 6 in No. 1.
JOINT RULES regarding the construction of the Hankow-Canton Railway agreed upon by the authorities and gentry of the three provinces of Hupei, Hunan, and Kuang-tung, dated the 6th February, 1908 (and approved by the Throne).
FOR the resumption fund of 1,100,000l. and the outstanding gold railway bonds the three provinces are responsible in the proportions of Hunan and Kuangtung three-sevenths each, Hupei one-seventh. Principal and interest payable shall be provided according to the sovereign and gold dollar exchanges, Hunan's contribution being paid direct by a Deputy and the English Consul at Hankow, Kuangtung's by that province and the Hong Kong and Shanghae Bank at Hong Kong. Any sudden rise or fall in the rates at dates of payment shall be borne in the same proportions.
2. The three provinces propose jointly to engage one railway Survey Engineer to survey the whole track again once, so as to determine exactly the trace. Each province will be responsible for payment of the survey within it.
3. Apart from this Surveying Engineer, each province will select and hire its own construction engineers and other employés. Each province is also free to engage its own engineer other than the joint engineer to resurvey.
4. Each province will provide its own funds and set to work building in its own jurisdiction. But, as the object is to establish complete intercommunication at an early date, it is agreed that railway work shall be started simultaneously by the three provinces on the trunk line only, no building of branches being allowed by a province until the trunk line within it is completed, lest the main work be delayed.
5. No profit can accrue on any province's completed part of the trunk line until traffic opens. The net profits shall be pooled and divided according to the actual capital counting from the date of starting traffic.
6. As Hunan's section is the longest, the Hunan and Kuangtung Companies have, with a view to the speedy completion of the whole line, now agreed that, after the latter has built up to its border, Hunan agrees to cede to Kuangtung full rights of the building on its behalf of the line on from Ichang through the Chen-chou jurisdiction to Yung-hsing district. This section shall be under Kuangtung's management for twenty-five years after completion, when Hunan may redeem it at the actual cost incurred by Kuangtung in making it. Should Kuangtung's provision of funds prove inadequate, other arrangements will, of course, be made; but Hunan must have one year's notice so that Hunan may provide funds to continue the line itself.
7. The three provinces should hasten the construction of the section of each, and so if one province builds energetically, and speedily completing its line at a great rate, while another province builds leisurely and slowly with poor results in line built, the behind-hand province shall bear a proportionate share of the interest on the work and capital expended by the forward province, so as to avoid procrastination. Every year there shall be a mutual comparison and reckoning.
(Note. The idea is that if, e.g., Kuangtung has 300 miles done, Hupei 200, and Hunan only 100, each share pay one-third of the interest on the total capital expenditure.)
8. The traffic profit on Kuangtung's completed branch from Canton to Fatshan is earmarked for the resumption fund in the proportions set forth in Article 1.
9. The Development Companies built part of the main line in Kuangtung, and their unused materials are to be valued by deputies, and Kuangtung will pay Hunan and Hupei three-sevenths and one-seventh of the total respectively.
10. The cost of the land in Kuangtung, bought by the Development Company, will be ascertained from the deeds, and dealt with in the same fashion.
11. As the three provinces are to divide profits according to capital of each, they shall mutually send officers to investigate. A separate detailed scheme will be drawn up after the resurvey and before work begins.
12. The steel rails, all steel and iron materials required for the whole line shall, it is agreed by the three provinces, be jointly contracted for with the Hanyang ironworks. The ironworks' quality and prices shall, whether conveyed to Hupei, Hunan, or Kuang-tung, be uniform with those of foreign works. The prices may not be unduly raised, and then, so as to protect China's own interests, the provinces will not buy abroad.
13. Each province will make its own rules, according to local conditions, for the provision of funds and invitation of shareholders, and will submit them for approval, the general rule being to avoid encroachment on each other. Neither may alien shares be privily invited on pain of confiscation of capital so obtained.
14. After the whole line is completed, the profits on working will first be devoted to paying the Company's salaries and wages and office expenses, the up-keep of the line, amortization of resumption loan, proper share interest and reserve, and then from the net profits a certain contribution shall be made to the State in accordance with the system of foreign countries' Companies; but it is earnestly begged that all extra charges may be cut out in compassion for our traders' means in the hope of great advantage to the system of collecting merchant shareholders. The ultimate residue will all pertain to the shareholders for apportionment under such rules as they may agree upon.
Four Supplementary Rules for the Working of the completed Line.
1. The arrangements on this railway for the transport of such items as troops and supplies on public account, and for relief of regions suffering from drought or flood, shall be compiled from the rules of foreign mercantile Railway Companies.
2. In case of hostilities, when our country will use it for conveyance, it is still more essential to prevent the enemy from privily obtaining its beneficial use. What precautions this line ought to take should be compiled from the Regulations of such foreign mercantile Railway Companies.
3. Touring students from the various schools, and naval and army men, if provided with a special pass issued by the public authorities, should obtain the regular reduced fares, but such passes must, in accordance with foreign countries' system, have clear limitations.
4. The business taxes payable in building this line should be compiled according to the rules of the commercial Railway Companies of foreign nations.
Inclosure 7 in No. 1.
Chang Chih-tung to Consul-General Fraser.
(Translation.) Sir,
[Received August 9, 1905.] THE Canton-Kowloon Railway is a question apart from the present loan, and it was never mentioned when I first consulted you about raising the loan.
My powers and office relate solely to the Canton-Hankow Railway, and I am also entirely unacquainted with the details of the first discussion of the Canton-Kowloon Line. I cannot venture, therefore, rashly to obtrude my opinion on the arrangements for that railway, a matter which it really would not do for me to concern myself with.
The fact is that, while I am indeed deeply grateful for the genuine friendship and kindly feeling shown me by Sir Ernest Satow and yourself over the loan, I had rather not take any part in the Canton-Kowloon Railway question.
I should feel very grateful if you would convey to Sir Ernest Satow my hope that he will pardon my insisting that the loan and the Canton-Kowloon Railway question be kept quite separate.
I have, &c. (Card of Viceroy Chang.)
91
6
(Translation.)
Inclosure 6 in No. 1.
JOINT RULES regarding the construction of the Hankow-Canton Railway agreed upon by the authorities and gentry of the three provinces of Hupei, Hunan, and Kuang- tung, dated the 6th February, 1908 (and approved by the Throne).
FOR the resumption fund of 1,100,0007. and the outstanding gold railway bonds the three provinces are responsible in the proportions of Hunan and Kuangtung three- sevenths each, Hupei one-seventh. Principal and interest payable shall be provided according to the sovereign and gold dollar exchanges, Hunan's contribution being paid direct by a Deputy and the English Consul at Hankow, Kuangtung's by that province and the Hong Kong and Shanghae Bank at Hong Kong. Any sudden rise or fall in the rates at dates of payment shall be borne in the same proportions.
2. The three provinces propose jointly to engage one railway Survey Engineer to Each province survey the whole track again once, so as to determine exactly the trace. will be responsible for payment of the survey within it.
3. Apart from this Surveying Engineer, each province will select and hire its own construction engineers and other employés. Each province is also free to engage its own engineer other than the joint engineer to resurvey.
4. Each province will provide its own funds and set to work building in its own jurisdiction. But, as the object is to establish complete intercommunication at an early date, it is agreed that railway work shall be started simultaneously by the three provinces on the trunk line only, no building of branches being allowed by a province until the trunk line within it is completed, lest the main work be delayed.
5. No profit can accrue on any province's completed part of the trunk line until traffic opens. The net profits shall be pooled and divided according to the actual capital counting from the date of starting traffic.
6. As Hunan's section is the longest, the Hunan and Kuangtung Companies have, with a view to the speedy completion of the whole line, now agreed that, after the latter has built up to its border, Hunan agrees to cede to Kuangtung full rights of the building on its behalf of the line on from Ichang through the Chen-chou jurisdiction to Yung-hsing district. This section shall be under Kuangtung's management for twenty- five years after completion, when Hunan may redeem it at the actual cost incurred by Kuangtung in making it. Should Kuangtung's provision of funds prove inadequate, other arrangements will, of course, be made; but Hunan must have one year's notice so that Hunan may provide funds to continue the line itself.
7. The three provinces should hasten the construction of the section of each, and so if one province builds energetically, and speedily completing its line at a great rate, while another province builds leisurely and slowly with poor results in line built, the behind-hand province shall bear a proportionate share of the interest on the work and capital expended by the forward province, so as to avoid procrastination. Every year there shall be a mutual comparison and reckoning.
(Note. The idea is that if, e.g., Kuangtung has 300 miles done, Hupei 200, and Hunan only 100, each share pay one-third of the interest on the total capital expenditure.)
8. The traffic profit on Kuangtung's completed branch from Canton to Fatshan is earmarked for the resumption fund in the proportions set forth in Article 1.
9. The Development Companies built part of the main line in Kuangtung, and their unusued materials are to be valued by deputies, and Kuangtung will pay Hunan and Hupei three-sevenths and one-seventh of the total respectively.
10. The cost of the land in Kuangtung, bought by the Development Company, will
be ascertained from the deeds, and dealt with in the same fashion.
11. As the three provinces are to divide profits according to capital of each, they shall mutually send officers to investigate. A separate detailed scheme will be drawn up after the resurvey and before work begins.
12. The steel rails, all steel and iron materials required for the whole line shall, it is agreed by the three provinces, be jointly contracted for with the Hanyang ironworks. The ironworks' quality and prices shall, whether conveyed to Hupei, Hunan, or Kuang- tung, be uniform with those of foreign works. The prices may not be unduly raised, and then, so as to protect China's own interests, the provinces will not buy abroad.
13. Each province will make its own rules, according to local conditions, for the provision of funds and invitation of shareholders, and will submit them for approval, the
general rule being to avoid encroachment on each other. Neither may alien shares be privily invited on pain of confiscation of capital so obtained.
14. After the whole line is completed, the profits on working will first be devoted to paying the Company's salaries and wages and office expenses, the up-keep of the line, amortization of resumption loan, proper share interest and reserve, and then from the net profits a certain contribution shall be made to the State in accordance with the system of foreign countries' Companies; but it is earnestly begged that all extra charges may be cut out in compassion for our traders' means in the hope of great advantage to the system of collecting merchant shareholders. The ultimate residue will all pertain to the shareholders for apportionment under such rules as they may agree
upon.
Four Supplementary Rules for the Working of the completed Line.
1. The arrangements on this railway for the transport of such items as troops and supplies on public account, and for relief of regions suffering from drought or flood, shall be compiled from the rules of foreign mercantile Railway Companies.
2. In case of hostilities, when our country will use it for conveyance, it is still more What precau- essential to prevent the enemy from privily obtaining its beneficial use. tions this line ought to take should be compiled from the Regulations of such foreign mercantile Railway Companies.
3. Touring students from the various schools, and naval and army men, if provided with a special pass issued by the public authorities, should obtain the regular reduced fares, but such passes must, in accordance with foreign countries' system, have clear limitations.
4. The business taxes payable in building this line should be compiled according to the rules of the commercial Railway Companies of foreign nations.
Inclosure 7 in No. 1.
Chang Chih-tung to Consul-General Fraser.
(Translation.) Sir,
[Received August 9, 1905.] THE Canton-Kowloon Railway is a question apart from the present loan, and it was never mentioned when I first consulted you about raising the loan.
My powers and office relate solely to the Canton-Hankow Railway, and I am also entirely unacquainted with the details of the first discussion of the Canton--Kowloon Line. I cannot venture, therefore, rashly to obtrude my opinion on the arrangements for that railway, a matter which it really would not do for me to concern myself with.
The fact is that, while I am indeed deeply grateful for the genuine friendship and kindly feeling shown me by Sir Ernest Satow and yourself over the loan, I had rather not take any part in the Canton-Kowloon Railway question.
I should feel very grateful if you would convey to Sir Ernest Satow my hope that he will pardon my insisting that the loan and the Canton--Kowloon Railway question be kept quite separate.
I have, &c. (Card of Viceroy Chang.)
91
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