CO129-383 - Public Offices - 1911 — Page 111

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"Currency Reform Loan Account" with the

Bank. When the transfer of any sums exceeding 20,0001. is desired, certificate as above described shall be handed to the banks ten days previous to the presentation of the order for the transfer of such funds.

6. The

Bank, above named, shall keep a separate and distinct "Currency Reform Loan Account" in the form stipulated in the plan for currency reform and (or) the statement of proposed expenditures provided for in article 8, C paragraph 1, above, of the disbursements of funds for operations contemplated under this agreement; and as the Government desires to assure the banks, in the interests of the bondholders, that the loan funds are being expended in accordance with the purposes of this agreement, such accounts shall, until such time as the proceeds of the loan shall have been expended as stipulated, in the plan for currency reform and (or) the statement of proposed expenditures provided for in article 8. paragraph 1, above, be open to the joint inspection of the banks of their duly designated representatives.

7. If any requisition on loan funds is not made as provided in paragraph 5, above, or if, on joint inspection, the " Currency Reform Loan Account" with the Bank should not be found to conform with the stipulations of paragraph 6, above, the banks shall be entitled to delay the transfer of loan funds pending the presentation of a certificate prepared, and (or) the rectification of the "Currency Reform Loan Account" with the

Bank, as provided respectively in paragraphs 5 and 6 of this article.

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8. As soon as a certificate properly prepared, as provided in paragraph 5 above, has been presented, and (or) when the Currency Reform Loan Account" with the Bank has been duly rectified, the transfer desired shall at once be made and the funds deposited with the

Bank as provided above. The banks shall not intentionally delay or obstruct matters to the detriment of the operations contemplated hereunder, and it shall be imperative upon the banks to facilitate such operations in every way, and in all respects to act in conformity with the letter and spirit of this agreement, which they must neither infringe nor pervert.

Art. 10.-1. The rate of interest for the loan shall be 5 per cent. per annum on the nominal principal, and shall be paid to the bondholders half-yearly from the date on which the loan is issued to the public, and according to the amounts specified in the schedule attached to this agreement.

2. The term of the loan and the bonds evidencing the same shall be forty-five years. Repayment of principal shall commence ten years after the date of the loan, and shall be by yearly amortisation in half-yearly instalments according to the amounts specified in the schedule attached to this agreement.

3. The Government or the high official in charge of the loan funds shall hand to the American group, Hong Kong, and Shanghai Banking Corporation, Deutsch- Asiatische Bank, and the Banque de l'Indo-Chine in Shanghai equal amounts in the national currency, or sycee, the aggregate of which shall be sufficient to meet such half-yearly payments in gold to be in America or Europe fourteen days before the due dates.

4. The rate of exchange for such transactions shall be settled with the banks aforementioned by the high official in charge of the loan funds or, in his absence, by his duly authorised representative, on the day on which such payments in the new currency or sycee are made. The Government or its duly authorised representative, however, shall have the option of settling exchange with the banks at any date or dates within six months previous to any due date for the payment of interest or the repayments of principal, provided notice be given by the Government or its duly authorised representative to the banks ten days previous to the date of such settlement.

5. Payments, however, may be made in gold to the banks in the United States of America or Europe if the Government should happen to have gold funds bond fide at its disposal in the United States of America or in Europe, not remitted from China for the purpose, and desire so to use them.

6. The banks shall act as agents for the service of the loan. In reimbursement of expenses connected with the payment of interest and the repayment of principal of this loan the banks shall receive a commission of one-quarter of 1 per cent. on the annual loan service.

Art. 11. If at any time after the lapse of fifteen years from the date of the loan the Government should desire to redeem the whole outstanding amount of the loan or any part of it not yet due for repayment in accordance with the schedule of repayments

hereto attached, it may do so up to the end of the twenty-fifth year by the payment of a premium of 23 per cent. on the face value of the bonds (that is to say, by the payment of 1021. 10s for each 100%, bond), and after the lapse of twenty-five years without premium, but in each and every case of such extra redemption the Government will give six months' previous notice in writing to the banks, and such redemption shall be effected by additional drawings of bonds to take place on the date of an ordinary drawing as provided in the prospectus of the loan.

Art. 12. In the event of any bond or bonds issued for this loan being lost, stolen, or destroyed, the group and (or) bank or banks concerned may notify the Government and the Chinese Minister in Washington, London, Berlin, or Paris, as the case may be, who shall authorise the group and (or) bank or banks concerned to insert an advertisement in the public newspapers stating that payment of such bond or bonds has been stopped; and to take such other steps as may appear advisable or necessary according to the laws or customs of the country concerned. Should and bond or bonds be destroyed, or should such lost or stolen bond or bonds not be recovered after a lapse of time to be fixed by the banks, the Government or the Chinese Minister in Washington, London, Paris, or Berlin, as the case may be, shall seal and execute duplicate bond or bonds for a like amount, and deliver them to the group and (or) bank or banks representing the owner or owners of such lost, stolen, or destroyed bond or bonds, which group and (or) bank or banks shall pay all expenses in connection with such delivery and execution of such duplicate bond or bonds for the account of the owner or owners of such bond or bonds.

Art. 13. All bonds and coupons and payments made and received in connection with the service of this loan shall be exempt from all Chinese taxes and imposts of any and every description during the currency of the loan.

Art. 14. If the Government should desire to secure from other than Chinese scources, funds in addition to the proceeds derived from this loan, to continue or complete the operations contemplated under this agreement, the banks shall be invited first to undertake and on equal terms shall be given preference for the flotation of such loans as may be required to secure the amounts desired, and should foreign capitalists be invited to participate with Chinese interests in the business contemplated under this loan, or to be undertaken in connection therewith, the banks shall first be invited to so participate.

Art. 15. If, before the publication of the prospectus for the issue of this loan any political or financial crisis shall occur affecting the general markets and the prices of Chinese Government securities in such manner or in such a degree as, in the opinion of the banks, will render impossible the successful issue and flotation of the loan on the terms berein named, the banks shall be granted a further extension of time for the performance of this contract. Such extension of time, however, shall not exceed months from the date on which the currency reform programme and statement of proposed expenditures shall have been discussed with and agreed upon by the banks, If within this time limit the loan shall as provided in article 8, paragraph 1, above. not have been issued, then this contract shall become null and void. The Government shall reimburse the banks for all expenses incurred in connection with the engraving of the bonds, but shall be liable for no other compensation whatsoever.

Art. 16. The Government hereby authorises the banks to deduct from the proceeds of the loan a commission of 1 per cent. on the total amount thereof as a partial reimbursement for their expenses for engraving the bonds, printing the prospectus, stamp duties, legal fees, telegraph charges, advertising, commission and brokerage, underwriting and other expenses incident to the issuance and flotation of

the loan.

Art. 17. The American group, the Hong Kong and Shanghai Banking Corporation, the Deutsch-Asiatische Bank and the Banque de l'Indo-Chine shall take the loan in equal shares and without responsibility for each other.

Art. 18. The American group, the Hong Kong and Shanghai Banking Corporation, the Deutsch-Asiaitsche Bank, 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 American, English, German, or French company, directors, or agents, with power of further transfer and subdelegation; such transfer, subtransfer, delegation or subdelegation to be subject to the approval of the Government or the high official in charge of the loan funds.

Art. 19. This agreement is signed under the authority of an Imperial edict dated

month of the

corresponding year of (Western calendar), which has been officially communicated

the

to the

day of the

day of

Vay