CO129-361 - Public Offices - 1909 — Page 263

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(d.) The bonds to be of the par value of 11. each, and to be redeemed at par at a rate of 33,833 per annum, the redemption to commence on the day of (being the end of the 30th year from the date of signing this Agreement).

(e.) The Government to have the right on the

day of

(being thirty years from the date of signing this Agreement) to redeem the whole of the bonds at a premium of 20 per cent. on their par value. If the Government should redeem the bonds under this clause, the joint control as hereinafter laid down shall thenceforth cease and the foreign interests in the administration will disappear.

(f) If the Government does not redeem the bonds under the right given in clause 2 (e) of this Agreement, then the Government shall be intitled after provision has been made as specified in clauses

to a share in the profits in proportion to the

bonds actually redeemed.

(9.) A sum of 10,0001. per annum to be set aside as a reserve fund and for the replacement of plant, which fund may be employed as may be considered necessary under the rules of joint control as laid down hereafter.

4. The administration of the mines until final reimbursement of bonds to be under the joint management of a foreign and Chinese manager, the foreign manager to be appointed by the Committee representing the bondholders, the Chinese manager to be appointed by the Imperial Chinese Government. The foreign manager, in consultation with the Chinese manager, will have detailed charge of the ordinary and technical business of the administration. Any business of the Company outside ordinary routine will be dealt with by the two managers conjointly, and, in cases where extraordinary expenditure of a comparatively large amount is involved, the approval of both the Chinese Imperial Government and the Committee representing the bondholders must be obtained. Both managers shall have the power to veto any expenditure proposed by either supposing such expenditure to be either illegal or obriously against the interest of the Imperial Chinese Government or the bondholders. The Chinese manager to have equal rights with the foreign manager to call for reports, documents, accounts, or any other information he may require. He will be the medium of communication between the management and the Chinese authorities, and will also have the right to address the Committee of the bondholders independently of the foreign manager. The foreign manager shall similarly have the right to address the Viceroy of Chibli independently of the Chinese manager. The Chinese manager will be responsible to the Chinese Gover ment for the proper relations between the management and its Chinese staff and employés, and shall have the right to dismiss any foreign employé if it is proved to the satisfaction of both managers that the employé has been guilty of misconduct towards the Chinese. The half-yearly accounts and the annual reports will be submitted by the Chinese manager, under the joint signature of the two managers, to the Imperial Chinese Government. The foreign manager will submit the same reports, also under the joint signatures of the two managers, to the Committee repre- senting the bondholders. The Chinese manager will be responsible to the Imperial Chinese Government for the regular payment of all taxes and royalties due according to the Regulations, and he shall have the power to withdraw the necessary funds for this purpose under his own signature. The Chinese manager will also be responsible for dealings with the local authorities for the proper administration of police and municipal administration, &c., at the mines and at the port of Chin Wang Tao.

5. "Accounts shall be kept in Chinese and English, and shall be published half- yearly.

6. The bondholders shall be represented by a Board or Committee, which shall deal with the sums accruing from the guaranteed interest and the surplus profits of the administration, and shall have the right to appoint and recall the foreign manager.

7. The expenditure incurred by the Tanchow Mining Company shall be repaid. 8. All cash assets and liabilities shall be taken over by the Board or Committee acting for the bondholders, who will pay all debts proved to be due, and will place the balance remaining to the credit of the working account.

9. The Imperial Chinese Government agrees that no mines shall be opened

or worked in the Kaiping basin except by the Imperial Mining Administration of North China, conjointly with the bondholders, on the same terms and on the same conditions as herein agreed upon for the existing mines.

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Inclosure 4 in No. 1.

Cablegram received by the Chinese Engineering and Mining Company from their Agent in China.

Peking, March 6, 1909. CHINESE Imperial Government is likely to make the following proposals amending your suggestion in your telegram of the 25th February :-

1. Redemption at par of all bonds to be made at the end of thirty years; funds will be provided out of profits.

2. Reserve fund will be deposited with bank selected by Chinese Imperial Government, and utilized subject to provisions for joint control detailed hereafter.

3. Administration to be under joint management foreign and Chinese manager; foreign manager will be in charge technical and ordinary business in consultation with Chinese manager, business outside ordinary routine to be dealt with by two managers conjointly; in case of extraordinary expenditure of large amounts, approval both managers to of both Committee and Chinese Imperial Government necessary, have power to veto illegal expenditure or expenditure against interests of Chinese Imperial Government or bondholders. Chinese manager will have right to address Committee, foreign manager will have right to address Viceroy independently; Chinese manager will have power to discharge foreign employés if both managers Chinese manager agree have been found guilty misconduct towards Chinese. will have power to withdraw funds to meet all payments on account of taxes royalty in accordance with Regulations.

4. Committee to deal with sums accruing from guaranteed interest and surplus profits.

5. Part payment Grand Mining Company of Paiyang and Lanchow, 50,000l. to be made in bonds, remainder if any in cash.

Clause 7, your telegram dated the 25th to be omitted, Committee exercising In order to arrange control through foreign manager, other terms as before. agreement, I cannot too strongly urge telegraphic authority to deal with these points, giving maximum minimum you will be prepared concede in each case, leaving me to make best bargain possible. Will remain Peking waiting reply. Telegraph immediately.

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