8
Hukuang Railways Loan, 5,500,000l. at 5 per cent., twenty-five years.
SCHEDULE of Payments of Interest and Repayments of Principal.
Years.
Interest.
Principal.
Total Principal Repaid.
Principal still Outstanding.
3
£
£
£
137,500
1
137,500
137.500
2
137,500
137,500
3
137,500
137,500
4
137,500
187,500
5
137.500
187,500
6
137,500
137,500
7
187,500
8
187,500
137,500
137,500
9
137,500
137,500
10
137,500
137,500
183,800
11
366,600
187,500
183,300
128.335
12
188,800
783,200
128,335
188,300
119,170
18
188,300
129,170
183,300
1,099,800
5,133,400
4,760,800
4,400,200
14
110,005
183,300
110,005
183,300
1,466,400
4,033,600
15
100,840
183,300
100,840
183.300
1,883,000
3,667,000
91,675
16
188,300
91,675
188,300
2,199,600
3,300,100
82,510
17
183,800
2,566,200
82,510
183,300
2,933,800
18
73,845
183,300
73.345
183.800
2,932,800
2,567,200
19
64,180
183,300
04,180
3,299,400
2,200,600
183.300
20
35,015
183,300
55,015
183.300
3,666,000
1,884,000
21
45,850
183.300
45,850
183,800
4,032,600
1,407,400
22
36,885
183.300
36,685
183,300
4,399,200
1,100,800
27,520
183,300
23
27,520
183,300
4,765,800
18,355
24
183,800
18.355
183.300
9,190
25
9,190
183,300 184,800
5,182,400
5,500,000
784,200
367,600
2 2 2 2 A
9
If the output of the Han Yang iron-works proves really insufficient for requirements, more can in that case be purchased from the countries of the contracting banks and other countries, in order to obviate delay. If on the other hand the output of the Han Yang iron-works is sufficient, more rails can be purchased from them, All purchases will still be executed in the manner laid down by article 18 of the agreement.
Further, as regards engineers and other technical employes on the various sections, it shall be within the discretion of the director-general to appoint either Chinese or Europeans, or, on account of their familiarity with the survey of the line, he may take into consideration the appointment of Japanese, provided always that such persons are suitable through possessing some knowledge of the language of the engineer-in-chief.
Again, since this loan is raised by the Chinese Government with the object of furnishing the necessary capital for constructing Government railways, the chief and branch bureaux established by the two provinces shall be entirely under the control of officers deputed by the director-general; and if amongst these officers it is found necessary to employ gentry they shall act as deputies in all respects under the orders of the director-general.
Article 14 of the present agreement stipulates that two days prior to the issue of a requisition upon the loan funds, the managing director of the railway or his repre- sentative shall in addition thereto issue statements in duplicate clearly setting forth the objects of such requisition one copy of which shall be handed to the bank and one to the auditor. The intention of this stipulation is that the managing director and the auditor shall each fulfil his responsibilities within his own province, and further that the auditor shall be enabled to discharge to the full his duties as auditor.
If the auditor is of opinion that in any requisition there are disbursements which should not be made, he shall be entitled on the one hand to apply to the managing director for specific information and to discuss the matter with him, and at the same time give notice to the bank temporarily to suspend the issue of such funds. As soon as he shall have satisfied himself by enquiry that the payments are actually such as are permissible under the terms of the agreement, he must at once notify the bank that they are to issue such funds accordingly. He shall not intentionally delay or obstruct matters to the hindering of important work, and it shall be imperative upon the auditor to act in all respects in conformity with the conditions of the present agreement which be must neither infringe nor pervert.
A further point to be noted is that the Chinese officials acting in this business are in no way entitled to any commissions whatsoever, and the banks shall not privately offer them gratuities. If it should be discovered that private offers of gratuities have been made, the banks will be held liable to a heavy monetary penalty.
Again, whereas the details of existing practice on the northern section of the Tien-tsin-Pak'ou line have been found to be satisfactory, and have been submitted to the director-general and approved by him, they may be adopted as far as possible, and a copy of the memorandum in ten articles which has been drawn up by that administra- tion shall be appended to this letter.
The foregoing particulars have been expressly and explicitly referred to and set down in this letter because they are not dealt with in sufficient detail in the agreement itself, and they are to be loyally observed by each party. Copies of this letter are hereby made in quadruplicate, one to be held by each party.
Inclosure 2 in No. 1.
Subsidiary Arrangement respecting Article 18 of Agreement.
BY article 18 of the agreement it is provided that at rates and qualities equal to those of German, English, French or other foreign materials, preference shall be given to Chinese materials and goods already manufactured in China, in order that Chinese industries may be encouraged.
Now the most widely used railway materials are sleepers and rails. China produces much timber, and therefore Chinese sleepers should be purchased if of suitable quality.
As regards rails, it is agreed that one half shall be purchased from the countries of the contracting banks or from other countries and one half from the Han Yang iron-works.
Inclosure 3 in No. 1.
Memorandum respecting existing Practice on Northern Section of Tien-tsin-Pukow Railway. (Translation.)
THE original Tien-tsin-Pukow Railway Agreement was made as complete as possible, after careful deliberation, and involved no loss of China's sovereign rights. The general principles have been recorded therein, but the details of operations have not been inserted in the agreement. A general statement of the actual practice at present in force on the northern section, is set forth under the following heads :---
1. The Managing Director, subject to the control of the director-general and assistant director-general, has general authority over the affairs of the whole section, including the appointment of the Chinese and foreign staff, the regulation of salaries; dismissals, promotions, the distribution of rewards and punishments, the arrangements for carrying out engineering work of every kind, as well as the Chinese and foreign
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