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inaugurated, and showing in what manner and in what amounts the proceeds of the loan are to be applied to the various expenditures incident to the inauguration and operation of the said programme.
(c.) A statement specifying the nature of the proposed enterprises in Manchuria, and showing in what manner and in what amounts the allotted portion of the proceeds of this loan is to be applied thereto.
2. The banks shall be given a period of six months from the receipt thereof within which to examine the programme and the two statements above referred to, and if within or upon the expiration of this period they shall find said programme and statements to be a reliable basis for the issue of bonds hereunder, the banks shall so notify the Board of Finance, and shall, as soon as possible after such notification, issue the loan to the public, but if the markets be unfavourable the banks shall be allowed a period of six months within which to issue the loan.
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3. The price of the bonds to the Imperial Chinese Government shall be 95 cent. of their nominal value. Subscriptions shall be invited by the banks in China, the United States, and Europe on equal conditions, preference being given to the application of the Imperial Chinese Government, provided such application be made to the banks not less than four days before the issue of the prospectus to the public. Seven days' notice of the issue of the prospectus will be given by the banks to the Board of Finance.
4. In the event of the Imperial Chinese Government requiring funds immediately for the commencement of any of the undertakings contemplated for Manchuria or for preliminary expenses connected with currency reform, the banks agree upon the execution of this agreement, and so soon as they shall have been furnished with state- ments satisfactory to themselves showing the nature of such undertaking or undertakings in Manchuria, or the proposed preliminary measures for currency reform, and the amounts to be respectively applied thereto, to hold in America and Europe at the disposal of the Imperial Chinese Government the sum of 1,000,0001. for Manchurian undertakings and the sum of 1,000,000l. for preliminary expenses for currency reform, and to advance the same or such portion thereof as may be required to the Imperial Chinese Government against the order or orders of the Board of Finance.
5. The above advances to the aggregate of 2,000,0001., or such portion or portions thereof as may from time to time have been availed of by the Imperial Chinese Government, shall bear interest at the rate of six per annum from the date on which such several sums may have been withdrawn by the Board of Finance from the banks, and these advances shall be deducted by the banks with accrued interest from the first proceeds of this loan when issued.
Art. 9. The proceeds of the loan after deduction by the banks of any advances made under the terms of article 3, paragraphs 4 and 5 above, with accrued interest thereon, and of the rebate of 1 per cent. provided for by the terms of article 16 hereunder, shall be placed to the credit of accounts to be designated respectively as "The Chinese Government Currency Reform Account" and "The Chinese Government Manchurian Development Account with the American Group in New York or such bank or banks in China as from time to time shall be designated by the American Group, the International Banking Corporation being now so designated; and with the Hong Kong and Shanghai Banking Corporation, the Deutsch-Asiatische Bank, and the Banque de l'Indo-Chine, in China, London, Berlin or Paris, as the case may be. Payments of the loan proceeds into the credit of these accounts shall be made in the proportions fixed respectively by the statement of expenditures for currency reform and the statement of Manchurian expenditures provided for in article 8, paragraph 1 above, in instalments and on dates conforming to the conditions allowed to the subscribers to the loan, and the sums so credited shall be held by the banks above named, subject to the order of the Board of Finance or such high official as may be deputed for the purpose.
2. Transfers of loan funds to China in amounts conforming to the Imperial Chinese Government's requirements as specified in the statements of currency reform and Manchurian expenditures respectively, but not exceeding a maximum of transferred in one week, will be made through the Shanghai branches of the several banks named in paragraph 1 of this article by the Board of Finance or the high official deputed; the aggregate sum to be transferred being drawn in equal amounts from the several banks with which the loan funds are deposited, in the United States of America or in Europe. Funds so transferred shall be held in equal amounts by the transferring banks in Shanghai until required to be withdrawn for the purposes
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specified in the statements of currency reform and Manchurian expenditures respectively.
3. The Board of Finance or the high official in charge of the loan funds shall, in accordance with the Imperial Chinese Government's requirements as specified in the statements of currency reform and Manchurian expenditures respectively, make transfers from the loan funds held by the banks in China, to the credit of a "Currency Reform Account" and/or a "Manchurian Development Account" with the Shanghai and/or Peking branches of such Chinese bank or banks as the Board of Finance may from time to time designate to be its agent or agents for financing the operations contemplated under this agreement.
4. Orders on the banks for such transfer of loan funds held by the banks in China to the Shanghai and/or Peking branches of the designated Chinese bank or banks, shall be signed by the Board of Finance or the high official deputed for the purpose. Three days previous to the presentation of such orders the high official deputed shall hand to the banks a certificate, the form of which shall be stipulated in the statement of expenditure for currency reform, and/or the statement of Manchurian expenditure referred to in article 8, paragraph 1, above, stating fully the object for which the funds are required, and the certificate and order being found correct the banks shall not be entitled to delay the transfer desired, and the aggregate sum requisitioned shall be immediately transferred in equal amounts from the several banks to the credit of Currency Reform Account" and/or "Manchurian Development Account" with the designated Chinese bank or banks.
5. Desiring to assure the banks, in the interest of the bondholders, that the loan funds are being expended for the purposes contemplated under this agreement, the Board of Finance engages until such time as the proceeds of the loan shall have been expended, in accordance with the statements of currency reform and Manchurian expenditures, to hand to the banks not later than twenty days after the expiration of each quarterly period :---
(a.) A quarterly statement in Chinese and English showing the disbursements incident to the inauguration and operation of the Imperial Chinese Government's programme of currency reform.
(b.) A quarterly statement in Chinese and English showing the disbursements for the promotion and extension of Manchurian industry.
Such quarterly statements shall be of the nature of, and in the forms to be specified in the statements of currency reform and Manchurian expenditures, and shall be issued by the Board of Finance on dates to be fixed by the said statements, and shall be the basis for the annual report, which shall be published by the Board of Finance, within four months of the close of each fiscal year, for the information of the Imperial Chinese National Assembly or the Imperial Chinese Parliament.
Art. 10. 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 as calculated 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 with the eleventh year after the date of the loan, and shall be made by yearly amortisation in half-yearly payments according to the amounts specified in the schedule attached to this agreement.
3. The Board of Finance or the high official in charge of the loan funds shall, ten days before their due dates, hand to the bank or banks designated from time to time by the American Groups, the International Banking Corporation being now so designated, and to the Hong Kong and Shanghai Banking Corporation, the Deutsch-Asiatische Bank, and the Banque de l'Indo-Chine, in Shanghai, in equal shares, funds in Shanghai sycee and/or coin of the national currency sufficient to meet each such half-yearly payment of principal aud/or interest in gold, in America or Europe.
4. The rate of exchange for such transactions shall be settled with the banks afore- mentioned by the Board of Finance or the high official in charge of the loan funds either on the day on which the payments in Shanghai sycee or coin of the national currency are to be made, or at the option of the Board of Finance on any date or dates within six months previous to any due date for the payment of interest or the repay- ment of principal.
5. Payments may be made in gold ten days before their due dates to the banks in the United States of America or Europe if the Imperial Chinese Government should happen to have gold funds bona fide at its disposal in the United States of
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