CO129-361 - Public Offices - 1909 — Page 201

4

(a.) Spheres of interest not to be allowed; the railways in the Province of Shan- tung not to fall into the scope of the Agreement.

(b.) Chief Engineers to be appointed alternately by the three groups, with the exception of the railway line Pukow-Sinyang-in which case the Chief Engineer shall be English--and the railway lines Techou-Chengtingfu and Yenchonfu-Kaifeng, in which cases the Chief Engineer shall be German,

(c.) The position of the Peking representative of the German Syndicate in nego- tiations with Chinese authorities shall be in parity with the position of the representa- tive of one or the other group.

(d) An additional clause shall be inserted that all parties to both Agreements shall bind themselves not to be interested in any competing business within the scope of the Agreement without disclosure of such interest and the consent of the other parties thereto.

(e.) As long as the first Agreement to be concluded remains in force, the Agreement made on the 30th June, 1898, between the Hong Kong and Shanghae Banking Corporation and the British and Chinese Corporation, cannot be cancelled or altered.

(f.) Both Agreements shall not come into force before falfilment of the conditions hereafter specified under No. 3.

3. After conclusion of both Agreements, M. Cordes shall immediately be instructed to reopen negotiations for a modification of the preliminary Agreement for the Canton-Hankow Railway Loan, if necessary under assistance of the British, French, and German Legations in Peking, so that the provisions concerning the control over the employment of loan funds may be improved to Canton-Kowloon terms as a minimum.

The British and French groups will then be free to enter into the Canton- Hankow Agreement (Hunan and Hupeh sections), provided always that the Hankow- Chengtu Loan (Hupeh section) will be conclude l simultaneously. The Chief Engineer for the former line shall then be appointed by the British group, but for the Hupel section of the Hankow--Chengtu line the power of appointing the Chief Engineer rests under any circumstances with the German Syndicate.

4. All efforts must be made by the three groups to the effect that the interna- tionalization of all loans coming under both Agreements be ensured.

If necessary it can be granted that the expenses for stamp duty and publicity are shared in common by the three groups.

The time and notice of termination to be given for both Agreements should be twelve months instead of six months, and both Agreements should not terminate sooner than the 31st December, 1911.

We hope you will agree to continue the negotiations on these lines, and we shall be prepared to meet you and the other English and French frieuls in Brussels or Paris during the week commencing the 20th instant, but not before the 1st proximo.

Inclosure 2 in No. 1.

Agreement.

We remain, &c. Deutsch-Asiatische Bank, (Signed) ERICH.

REHDERS.

day of

MEMORANDUM of Agreement made the

1909, between the British and Chinese Corporation (Limited), having its registered office at 3, Lombard Street, in the City of London (hereinafter called "the Corporation") of the first part, Chinese Central Railways (Limited), having its registered office at 110, Cannon Street, in the said City (hereinafter called "the Central Company") of the second part, the Banque de l'Indo-Chine, having its head office at 15 bis, Rue Lafitte, Faris (hereinafter called "the French Bank") of the third part, and the Deutsch-Asiatische Bank, having its head office at 14 to 16, Bebrenstrasse, Berlin (hereinafter called "the German Bank") of the fourth part.

WHEREAS by an exchange of notes the Governments of England and France have declared themselves opposed to the subjects of either country making

5

loans to the Empire of China for railway purposes, unless accompanied by suitable guarantees that the moneys will be devoted to the object for which the loan was ostensibly raised.

And whereas the German Syndicate for Chinese business hereinafter referred to having been in negotiations with the Government of the Chinese Empire in competition with the Corporation and the French Syndicate in connection with Chinese business to which this Agreement relates, and being satisfied that the principle adopted by the Governments of England and France should be adopted on their behalf, also as affording the most beneficial and economical manner of providing sufficient security for the service of loans made by them have accordingly expressed their willingness to enter into a general Anglo-Franco-German understanding for the purpose of governing the action of the Corporation and the French and German Syndicates in connection with the negotiations for and making to the Chinese Empire loans for railway

purposes.

Now it is hereby agreed by and between the parties hereto as follows:

*

1. In the matter of this Agreement the French Bank is acting on behalf of the French Syndicate for Chinese business consisting of the parties whose names are set forth in the First Schedule hereto, and the German Bank is acting on behalf of the German Syndicate for Chinese business consisting of the parties whose names are set forth in the Second Schedule hercto.

2. This Agreement relates to all loans and advances for railway purposes to be floated out of the Chinese Empire, which may be made with the Chinese Imperial Government, but does not relate to loans to be floated within the Chinese Empire.

3. Any business of the kind herein before defined to which this Agreement relates, which may be offered to either of the contracting parties of the first, third, and fourth parts (hereinafter jointly referred to as "the lenders") must be dealt with jointly by them in accordance with the stipulations of this Agreement, and any loans or advances to Government Departments and Companies for railway purposes and having Chinese, Imperial, or Provincial Government guarantees are to be treated in the same manner.

4. As regards joint action in respect of financial operations for railway purposes not having such guaranices special Agreements will have to be made in "each separate case.

6. This Agreement is made on the principle of equality, namely, equal terms in every respect between the lenders, and each of the lenders enters into this Agreement for their respective groups, and shall take an equal share in all operations, and jointly sign all contracts, except as hereinafter provided, and shall bear in equal shares all charges in connection with any business (except charges of and connected with the realization by each of the lenders in their respective markets of their participation in the operations), and conclude all contracts with equal rights and obligations as between themselves.

Provided always that in cases where the introduction of third parties is calculated to prejudice the success of the negotiations any business falling within the scope of this Agreement may be entertained and negotiations entered upon by either of the lenders alone, with or without notice to the other lenders, and should it appear in the course of such negotiations that the conditions imposed upon the business preclude joint negotiations and (or) joint signatures by the lenders in terms of this Agreement, the negotiating party may conclude and sign the Agreement and negotiations alone, but upon the terms of the other lenders being entitled to all rights or participation under this Agreement other than those involving or arising from joint negotiation and joint signature, but it is understood that all the lenders will use their best endeavours to obtain the joint signatures to any contract wherever possible, except where for any reasons this is found to be impracticable, when the party signing the contract shall by the insertion of a special clause or execution of a separate declaration of trust, or otherwise insure to the other lenders the same rights as regards the taking over the issue and service of the loan which it has obtained under the contract for itself, and also the authority required for obtaining official quotations in the respective markets of the said other parties,

6. All contracts shall, so far as possible, be made so as not to impose joint liability on the lenders, but each of the parties to the said contracts shall severally liquidate its own engagements and liabilities towards the party of the other side in China. The parties to the said contracts will, so far as possible, come to an under- standing with regard to the realization of the operations, but so that such realization

[2193 au- ---3]

ӣ

199