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matters connected with the Pen Hsi IIu coal-mine, bas concluded the following contract with the manager or the Japanese firm of Messrs. Okura and Co. :---
1. After this contract has received the assent of the Chinese Government, the coal-mine at l'en Hsi Hu will be worked jointly by Chinese and Japanese merchants, under the name of the Pen Hsi Hu Merchant Coal Mining Company (Limited).
Hercafter in this agreement the Pen Hsi Hu Merchant Coal Mining Company (Limited) will be styled "the company," and the manager of Messrs. Okura and Co., "Okura and Co."
2. The Chinese Government grants the concession for the working of this mine on condition that the Government shall receive interest bearing bonds in the share capital of the mine to the value of 350,000 Pei-yang large doliars.
Scrip to this value must be handed over to the Chinese Government on the day on which this contract is confirmed by the said Government.
3. The capital of the Pen fisi Hu Mining Company is limited to 2,000,000 Pei-yang large dollars, one-half to be subscribed by Chinese and Japanese merchants respectively. The original interest of the Chinese Government being fixed at 350,000 dollars, a further sum of 650,000 dollars is to be contributed by Chinese. For the remaining 1,000,000 dollars Messrs. Okura and Co. are responsible.
Interest on the stock held by the Chinese Government shall be reckoned from the date of the opening of the mine; on the subscribed capital from the date of handing over the money.
4. After the commencement of the working of the mine, the annual profits shall be dealt with in accordance with the following rules :---
(a.) Interest on the share capital of 2,000,000 dollars shall be paid at the rate of 8 per cent. per annum in one instalment. If the profits of the company are not sufficient to enable them to pay 8 per cent., interest may be paid at a smaller rate.
(b) After payment of 8 per cent. on the share capital of the company, the surplus profits must be divided into ten portions. One portion shall be placed to a reserve fund, two and a-half portions shall be paid to the Chinese Government as a voluntary contribution from the company to the Government, and the remaining 65 per cent. of the surplus profits shall be divided pro rata between the Chinese and Japanese shareholders. Should hereafter the shareholders consider the conditions of the company perfectly satisfactory, payments to the reserve fund may be dispensed with; but no interest is to be paid on the reserve fund.
5. Two general managers shall be appointed-one Chinese, one Japanese. The other officials of the company shall be appointed by the two general managers in consultation, the number of Chinese and Japanese appointments being as far as possible in equal numbers,
No work is to be done in the mine nor are any payments to be made unless with the approval of the two managers under seal.
It is further necessary to report to the superintendent (the Commissioner of the Foreign Bureau at Mukden) from time to time. All accounts and vouchers must, for the convenience of the general managers, be rendered both in Chinese and Japanese, and properly qualified Chinese and Japanese accountants must be employed.
All affairs of the company must be managed by the two general managers, but if a deputy is appointed with powers to sign for the company, his appointment must be signed by both general managers.
The making up of the accounts of the company and the periodical payments of interest will be in accordance with the Chinese calendar.
6. The company will commence from the date on which the Chinese Government notifics its consent to the joint working.
7. In the event of the company requiring additional capital or wishing to raise money or debentures, the proposals must first be submitted to the shareholders, who will contribute the amount required in equal proportions; but no money is to be borrowed except from China or Japan.
None of the property of the company is to be mortgaged except for necessary loans (raised under conditions expressed in preceding paragraph), nor are the share- holders allowed to dispose of their scrip at their pleasure.
It is, of the greatest importance that Chinese labour should be engaged for
the mine.
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8. The duration of this contract will be for thirty years, commencing from the date on which the Chinese Government signifies its approval,
On the date of expiration of the contract the company will at once dissolve, and the Chinese Government will hand over their share certificates to the company and receive back the mine.
All movable property such as rails, supporting timbers, buildings, &c., must as soon as possible bo valued and sold. The sum so obtained, together with the resorve fund, will be distributed equally between the Chinese and Japanese shareholders, and this contract will be cancelled. All the share certificates issued by the company will be cancelled on the date of expiration of the contract.
But if after the expiration of the contract the Chinese and Japanese shareholders are unanimous in wishing to continue the company, the question of extension may be considered.
However, should the Chinese Government at any time after the expiration of the contract itself wish to work the mine, after having taken over from the company all movables, rails, supporting timbers, buildings, &c., at a fair valuation, the company will then immediately dissolve.
9. The company will pay
taxes as follows: on each English ton put out from the mine 6 Kuping taels (6 candareens) as li-kin, and in addition 10 Kuping taels (1 mace) as duty. For each "mou" of Government land occupied an annual land tax of 20 Kuping taels (2 mace). If coal is exported from a port it will also pay the customs duty of 1 mace per ton.
Should hereafter the Chinese Government in any province consent to a joint Chinese and foreign enterprise for working coal mines in which lighter taxation is agreed to, then the company may submit a request for similar privileges.
If, after the publication of new mining regulations by the Board of Agriculture and Commerce, it is found that there are points in this contract that must be changed, this will be arranged after the company has been duly notified of such regulations by the Viceroy of the three castern provinces,
10. Materials required by the company will pay duty according to the customs tariff only, and will be exempt from li-kin.
11. From the 31st year of Kuang-hsu (1905) up to the end of the intercalary 2nd moon of the 1st year of Hsuan Tung (April 1909) the Pen Hsi Hu coal mining as worked solely by Messrs. Okura and Co., the total sum expended by them in developing mine amounting to 1,000,000 Pei-yang dollars is recognised by the Chinese Government, and will form the portion of capital contributed by Messrs. Okura and Co. to the joint company. All the machinery, buildings, works, godowns, &c., will, on the day on which this agreement receives the consent of the Chinese Government, be carefully checked and banded by Messrs. Okura and Co. to the company, who will then issue share certificates to the value of 1,000,000 dollars to Messrs. Okura and Co. The Chinese Government expressly agrees that the capital furnished by Messrs. Okura in developing the mine within the dates above mentioned is to form part of the capital of the company.
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The amounts received for coal sold by the company during the above period must be checked by an official deputed by the Chinese Government in conjunction with Messrs. Okura and Co., and the whole sum must be handed to the company.
From the commencement of the 3rd moon of 1st year of Hsuan Tung (May 1909) up to the date of the commencement of working by the new company all additions to the machinery and other works undertaken by Messrs. Okura and Co. will be, if they are found on examination to have been necessary, will be taken over by the company at a valuation.
Sum received for coal during this period by Messrs. Okura and Co. will, after joint investigation by Messrs. Okura and Co. and the company, be handed over to the company, All stocks of coal at present in hand will also be handed to the company without payment.
12. After this contract has received the approval of the Chinese Government an officer will be deputed by the Viceroy to measure off the area of the mine and to delimit the boundaries. If, in the course of working the mine, antique curios are found, these will become the property of the Chinese Government.
13. Private property within the mining area must be leased at a fair rental. Should it be necessary to remove dwelling-houses or graves, the local authorities, at the request of the company, will instruct the owner as required, but the company must pay fair compensation for such removals.
14. After the signature of this agreement the superintendent will appoint an
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