CO129-372 - Public Offices - 1910 — Page 249

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In the event Szechuan-Hankow railway line, who shall be acceptable to the banks. of the banks objecting to any proposed appointment, the cause of such objection shall These two chief engineers shall be under the orders of the be definitely stated. managing directors of the respective lines or, in their absence, of their duly authorised representatives, and will carry out all the wishes of the Railway Administration with regard to the plan and construction of the lines. In their general conduct they shall pay all due respect to the director-general and the managing directors. The terms of their respective agreements will be arranged by the director-general on his sole authority.

Whenever appointments are to be made or functions defined of the technical employés on the railway staff, as well as in the case of their dismissal, the managing director or, in his absence, his duly authorised representative, will act in consultation with the chief engineer concerned, and in the case of disagreement the matter will be referred to the director-general, whose decision shall be final.

After completion of construction, and during the currency of this loan, the Imperial Chinese Government will continue to employ Europeans as chief engineers of the said railway lines, these appointments being made without reference to the banks.

Art. 18. For the Hupei-Hunan section of the Canton-Hankow railway line, and the Hupei section of the Szechuan-Hankow railway line respectively, (a) a company nominated by the Hong Kong and Shanghae Banking Corporation and approved by the director-general; and (b) the Deutsch-Asiatische Bank will act as agents of the Railway Administration during construction for the purchase of all materials, plant, and goods required to be imported from abroad. For all important purchases of such materials tenders shall be called for by the managing director concerned: in the case of all tenders, indents and orders for the importation of goods and materials from abroad, the said agents shall purchase the materials required on the terms most advantageous to the railways, and shall charge the original net cost of the same, plus a commission of 5 per cent. It is understood that no orders for materials shall be executed or any expenditure incurred without due authorisation by the managing director concerned.

In return for payment of commission as above stated, the aforesaid company nominated by the Hong Kong and Shanghae Banking Corporation and the Deutsch- Asiatische Bank, as agents for the respective railway lines, shall be prepared to superintend the purchase of all foreign materials required for their construction and equipment, which shall be purchased in the open market at the lowest rate obtainable, it being understood that all such materials shall be of good and satisfactory quality, and that the Railway Administration shall have the right to reject, on arrival in China, materials which are not in accordance with the original order. At equal rates and qualities goods of British, French, and German manufacture shall be given preference over other goods of foreign origin. The Railway Administration reserves the right, while paying the above stipulated commission to the said agents in respect of all purchase of foreign materials, to avail itself of the services of other agents in China or abroad should it see fit to do so.

Original invoices and inspectors' certificates are to be submitted to the managing director concerned; all returns, commissions, and rebates of every description shall be credited to the railways, and all purchases made by the agents on behalf of the railways shall be supported by manufacturers' original invoices and inspectors' certificates. No commission shall be paid to the agents except as above provided; but it is understood that the railway administration shall provide out of railway funds for the remuneration of consulting engineers whenever their services are engaged.

With a view to the encouragement of Chinese industries, preference will be given, at equal prices and qualities, over British, French, German, or other foreign goods to Chinese materials and goods manufactured in China, such cases being left to the decision, in consultation with the chief engineer, of an inspector appointed by the Imperial Chinese Government. No commission will be paid on purchases of such Chinese materials and goods.

It is understood and agreed that, after the construction of the lines is completed, the aforesaid company nominated by the Hong Kong and Shanghae Banking Corporation and the Deutsch-Asiatische Bank will be given the preference for agency business for the respective lines, during the currency of the loan, for the supply of foreign materials which the Railway Administration may require, on terms to be hereafter mutually agreed upon,

Art. 19. Branch lines in connection with the railway lines named in Article 2 of

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this agreement that may appear profitable or necessary later on shall be built by the Imperial Chinese Government with funds at its disposal from Chinese sources; but, if foreign capital is required, preference will be given to the banks.

Art. 20. After payment of interest and repayment of principal of this loan for any current year, the Railway Administration will deposit with the banks in Shanghae or Hankow any surplus of the net revenue of the railway lines for that year up to the amount required to pay the following year's instalments of interest on the loan, the rate of interest on the deposit being arranged with the banks from time to time with due regard to the conditions of the market.

Art. 21. All expenses in connection with the flotation and issue of this loan, such as underwriting, commission, and brokerage, telegraph charges, advertising, postage, printing of prospectus and bonds, stamp duty and legal fees, shall be borne by the

banks.

The Chinese officials acting in the matter of this loan do not receive any commission whatsoever.

Art. 22. The Deutsch-Asiatische Bank, the Hong Kong and Shanghae Banking Corporation, and the Banque de l'Indo-Chine shall take the loan in equal shares and without responsibility for each other,

Art. 23. The Deutsch-Asiatische Bank, the Hong Kong and Shanghae Banking Corporation, and the Banque de l'Indo-Chine may, subject to all their obligations under this agreement, transfer or delegate all or any of their rights, powers, and discretions thereunder to any German, British, or French company, directors, or agents, with power of further transfer and sub-delegation; such transfer, sub-transfer, delegation, or sub-delegation to be subject to the approval of the director-general.

Art. 24. This agreement is signed under the authority of an Imperial Edict dated the day of the 4th month of the 1st year of the Emperor Hsuan-t'ung, corresponding to the day of June, 1909, Western calendar, which has been officially communicated to the Ministers of Great Britain, France, and Germany in Peking by the Wai-wu Pu.

Art. 25. Seven sets of this agreement are executed in English and Chinese, four sets to be retained by the Imperial Chinese Government, and one set by each bank. In the event of any doubt arising regarding the interpretation of the contract, the English text shall rule.

Signed at Peking by the contracting parties this day of the 4th month of the 1st year of the Emperor Hsuan-t'ung, corresponding to the day of June, 1909, Western calendar.

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