2
the obvious advantages, both from the British and Chinese points of view, of combining railway construction contracts with loans, as is the case in the present
instance.
What is now most essential to bring the matter to fruition is for definite instructions to be cabled to His Majesty's Minister at Peking to lend his support, in consultation with the American and Japanese Ministers, to the obtaining, without delay, of the final Imperial edict authorising both loan and contract.
His Majesty's Government is well aware for how long a time, and with how much effort, expense, labour, and disappointment, Messrs. Pauling and Co, have endeavoured to obtain railway construction work in China, and it is needless for them, therefore, to repeat with what anxiety they must regard their present position in this contract, until they have been informed definitely by His Majesty's Government that the support of the Government will be given to them in this matter.
We are, &c. Pauling and Co. (Limited),
THO. SCOTT, Secretmy.
Inclosure 1 in No. 1.
Preliminary Agreement providing for the Financing, Construction, and Operation of the Railway from Chenchow to Aigun.
THIS preliminary agreement to provide for the financing, construction, aud! operation of the railway from Chenchow to Aigun is made between their Excellencies the Viceroy of Manchuria and the Governor of Fengtien, hereinafter called the administration, of the one part; and the American group and its associates (such associates to be admitted to participation with the full consent of, and to the extent--- not more than 40 per cent. of the whole-to be determined by the Chinese Government), hereinafter called the bank, and Pauling and Co., hereinafter called the contractors, of the other part.
Now it is hereby mutually agreed by and between the parties hereto as follows:-
1. The administration engages to borrow from the bank the sum necessary to construct the railway from Chenchow to Aigun. The rate of interest for this loan shall not exceed 5 per cent. per annum, and the terms of issue, which shall be the most favourable obtainable, and the other details of procedure shall be arranged in a mutually satisfactory manner.
The payment of interest and amortisation of this loan shall be guaranteed by the Imperial Chinese Government, and the security therefor shall be the railway line.
Interest payments and amortisation shall be met by the receipts of the railway or the proceeds of the loan, and, if these be insufficient, by such Manchurian revenues as may hereafter be selected by the administration and the bank in a manner to be mutually satisfactory.
The first bond issue shall be for the amount necessary for the construction and equipment of the railway between Chenchow and Tsitsihar. The second shall be for the construction and equipment of the railway between Tsitsihar and Aigun.
An equitable arrangement shall be made for the redemption of the bond issues
by the Board of Communications prior to the expiration of their terms.
2. The administration agrees to contract with the contractors for the construction and equipment of this road. The contractors engage to build and equip the line, using the best possible materials on the cheapest possible terms.
The detailed terms and conditions, &c., shall be arranged hereafter in a manner that shall be mutually satisfactory.
3. On equal terms Chinese materials shall be given the preference. If, however, Chinese materials are not available, resource shall be had to other markets.
The administration shall be liable to the contractors only for the contract price of the railway, and it is clearly understood that no commission shall be paid on the purchase of materials.
4. During the construction of this railway, the appointment of the chief engineer shall be vested in Pauling and Co., but this appointment must be approved by the president of the railway company, to be designated by the Imperial Chinese Government. The chief engineer shall be under the control of the Board of Commu- nications and the railway company.
3
5. As the work of construction is completed section by section, the railway shall be operated, during the currency of the loan, by a company which shall be under the control of the Board of Communications. If after the payment of interest and amortisation charges, and operating expenses, there be a surplus the railway company shall receive 10 per cent, thereof.
6. The company shall be composed of Chinese, Americans, and British, as may be hereinafter arranged, the Chinese to have a majority interest in the control, but under no circumstances shall persons of other nationality than those herein mentioned have any voice in the management or control of the company without the full permission of the Imperial Chinese Government.
The company
shall have as its president a high official appointed by the Imperial Chinese Government. The other details of organisation shall be subsequently arranged in a mutually satisfactory manner.
7. This railway company is to be organised by Chinese, American, and British interests. It is recognised, however, that this line is constructed in Chinese territory for commercial purposes, and in case of war may be used only for the transportation of Chinese troops and munitions of war.
8. This preliminary agreement is sigued by their Excellencies the Viceroy of Manchuria and the Governor of Fengtion with the bank and the contractors, subject to approval by Imperial cdiet, without which it shall be null and void.
9. In case certain portions of this agreement are characterised as unacceptable by the Imperial edict, or in case the administration finds on further consideration that that there are certain unsatisfactory provisions therein, these clauses, to which exception has been taken, shall be revised in the detailed agreements in a manner which shall be satisfactory to all parties.
In
10. This agreement is executed in triplicate in English and Chinese, one set to be retained by their Excellencies the Viceroy of Manchuria and the Governor of Fengtien, one set by the American group, and one set by Pauling and Co. case there by any misunderstanding arising from a difference between the English and Chinese texts the matter shall be settled by a mutually satisfactory arrangement.
Signed at Mukden by the contracting parties this 19th day of the 8th moon of the 1st year of the Emperor Hsuan Tung, being the 2nd day of October of the year 1909 of the Western Calendar.
FISI LIANG,
CHENG TE CHUAN,
The Viceroy of Manchuria and the Governor of Fengtien.
For J. P. Morgan and Co.,
The First National Bank,
Kuhn, Loeb, and Co.,
The National City Bank of New York, constituting the American group,
W. STRAIGHT, Agent.
For Pauling and Co.,
FFRENCH, Agent.
Inclosure in No. 1.
Imperial Edict communicated by the Viceroy of Manchuria, October 3, 1999.
THE following edict has been received (by the Grand Council) :-
Hsi Liang and Cheng Te Chuan memorialise us by telegraph "respecting the raising of a foreign loan and the construction of a railroad." We command the Wai-wu Pu, the Board of Revenue, and the Board of Communications to consult duly with the governor-general and governor concerned, taking into consideration the whole circumstances of the general situation, and to memorialise us jointly thereon.
Such is the Imperial will.
والي و اللة لا اله الا السعادة
201
sc -June
No comments yet.
Private notes are available after approval.